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3G off to shaky start

The much tom-tommed 3G services are yet to deliver on promise as mobile consumers struggle with clunky performance and high tariffs. And yet, there is talk of 4G already. Rachit Vats and Anita Sharan report. Mobile track

india Updated: Aug 03, 2011 17:26 IST

While it’s still too early to term it a flash in the pan, given the high decibel advertising around its launch, the much hyped 3G services have yet to really take off. After the initial advertising from Airtel and Vodafone, the only prominent advertising on 3G is from Reliance currently, which compares pixilated 3G delivery from competitors and its own flawless delivery.

Whether Reliance is providing flawless delivery or not, its advertising does put a finger on one of the things that ails the 3G service — stuttered delivery. Bandwidth is an issue. Actually, consumers who've lapped up smartphones for the use of the internet, pushmail and to be ready for the 3G/4G developments, seem to be giving 3G a go-by.

According to Cellular Operators' Association of India (COAI), 8.58 million new GSM subscribers were added in June, taking the all-India GSM subscriber base to 598.77 million. Industry estimates that around nine million subscribers have opted for 3G services.

Internet TV, video-on-demand, audio-video calls and high-speed data exchange are what 3G promised. But consumers have experienced frequent call drops and inconsistent internet speeds. Connectivity, complain many, is poor, especially when a person is on the move. High pricing too is a factor.

“Subscribers who immediately shifted to 3G had a patchy experience. Operators are now shifting focus to strengthen their networks and roll out 3G in phases. The 3G growth will depend on how soon a robust network is put in place,” said Ashish Basil, partner for technology communications and entertainment, Ernst & Young.

Meenakshi Sachdev Varma, a Delhi-based communication professional, was drawn to Airtel’s 3G services after seeing its ads. She tried the new service but discontinued it in less than a month due to patchy delivery. “The 3G service was much more expensive and much less beneficial. Call drops was a major issue, even when I was not moving,” she said.

Mumbai-based executive Bratin Roy, who travels across India, subscribed to Vodafone’s 3G plan and despite some inconsistencies in the delivery, has stuck to it. “Subscribers who have stuck with 3G have discovered the speed that it offers,” he said. He does not mind spending 25-30% more for the quicker net access, though he has still not used the more advanced videoconferencing service. “The opportunities to videoconference are remote as not many in my circle have 3G-enabled handsets. Also, there have been instances when connectivity vanished for 15-20 seconds.”

Neeraj Roy, MD and CEO, Hungama Digital Media Entertainment, pointed out that for 3G, each mobile services carrier was allocated just 5 MHz of spectrum. “Naturally, the delivery can’t be dramatic. However, given that the real 3G services started only in April although the initial noise had started in January, nine million 3G subscribers already is not a bad number.”

“The rush to advertise stemmed from the fact that the operators were trying to get the first mover advantage, but it’s not a big market. The smartphone market has to grow for the switch to happen,” said Shrishti Anand, analyst, IT & telecom, Angel Broking.

Neeraj Roy, however, observed: “Thanks to hyper competition in the mobile devices market, close to 180 million mobile devices are selling annually, with 40 million being data capable. Add to that tablets. At this time, if I were a carrier, I would use 3G to create curiosity but be quite happy with 2.5G customers at lower prices.”

“Our aim is to drive adoption for data usage and to get consumer to experience 3G itself. We believe that there will be significant uptake — we expect to double our data business over next year, with a major share coming through 3G,” said a Vodafone spokesperson. Till June 30, Vodafone 3G was available in 147 towns and cities across 12 circles.

“Service operators are working on multiple issues including services, a consistent network, pricing and metering. On the network side, operators are paying attention to quality. At present, the roaming arrangement is not good. It will take at least six-to-nine months before a pan-India infrastructure is put in place,” said Rajan Mathews, director general, COAI.

“Operators such as Bharti Airtel, Idea and RCom have put in procurement orders to put in place the backend, which hopefully will be deployed soon. There are also talks to upgrade from 3G to 4G, though the conversion from 2G to 3G is still low,” said Anand.

“At the moment, a lot of education is required on what 3G does. With faster data delivery, video consumption will go up. There will be more focus on applications and video content,” said Sameer Pitalwalla, senior VP, video products, interactive – UTV.

Neeraj Roy calls 3G a catalyst for large format internet adoption in the country. “India is at the threshold of this. In the mobile space, we will move from primarily a voice to an internet economy. When the ecosystem shifts, the impact will really be felt. Essentially, it’s all about speed and if 3G’s proposition is 3 mbps access, then 4G will be capable of delivering 10-20 mbps,” he said.

To the fact that 3G has stuttered on speed, he pointed out that within five weeks of the 3G licences, the government allocated 4G LTE (long term evolution) licences, with 20 MHz allocation to each licencee. “This practically back-to-back allocation will see India as one of the rare markets that, within 12 months starting January 2011, will move from 2G to 4G. 3G is the catalyst.”

Two things, he said, would ensure this. One, there are some very serious players who have made commitments on 3G and 4G; Qualcomm and Reliance have put their money on 4G. Two, India has crossed the 100 million internet users mark and by 2015, will touch 500 million. “In the past eight-nine months, mobile data subscribers have grown – they number around 85 million by now – which is a healthy sign.”

He concluded that while India is nine years behind on 3G, it will be at the same level as the rest of the developed world on 4G. “Data from other markets show that every 10% of internet adoption – which enhances empowerment, information and commerce – has a 1% correlation to the country’s GDP.”

Mobile track

First Published: Jul 24, 2011 21:45 IST