Explosive growth of 3G phones in India due to its low Cost

India’s much awaited third generation (3G) mobile services auction was reschedule to February 2010 as we shared in our earlier news. Before the long expected 3G auctions, telecom experts advised prospective operators to search for the High-end customers in their existing subscriber base and prepare to them to shift to high speed download with the 3.5G that the third generation spectrum would facilitate.

The telecom expert’s view at a 3G India Mobile Operators Executive Summit was that the new service could lead to explosive 3G growth in India with low cost UMTS enable mobile phones. It would enable cheaper download of several applications like Mobile TV, Video clips of films and Sports like Cricket, Education network Gaming and Entertainment; for hi-end users, voice and video callings would be cheaper on 3G. The State run telecom operator Bhart Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) who have been providing 3Gmobile services for some months and still only licensees to provide the 3G mobile and broadband service in India, enlightened the operators assembled with their own experience in the much hyped 3G domain.

India’s First 3G mobile service operator MTNL ’s Chief General Manager (Wireless Services-Delhi), A. K. Bhargava pointed out how the problem was not in technology but in ancillary services like billing and customer management. “The customer does not care whether it is 3G or 2G; we have to educate him on what benefits to expect from 3G.” MTNL had fewcustomers to begin with but once the benefits were explained “we had one lakh new 3G customers in just a month”. The higher tariff at the beginning restricted usage but “when tariff came down, customer base multiplied”, he added. His view was that “it was too early to talk of 3G services becoming popular with bottom of the pyramid customers.” But for the service to be profitable, the customer search should include middle level users as well as hi-end ones. The potentialcustomers could be preselected from the existing subscriber base and told about what 3G could mean to each one of them.

The MTNL executive suggested that operators must project 3G as a tool for enhancing efficiency, productivity and as promoting a changed life style and not as a mere upgrade on 2G.

According to the BSNL principal general manager for value added services, Mr. S. S. Sirohi, 3G would be most popular with those who need to use Internet while on the move. “Download is quick with 3G bandwidth” he pointed out taking a leaf out of his company’s offer of 3G services in the last few months. Live TV would be most popular and also network games with 3G availability. Mr. Sirohi advised theprospective operators to offer a bouquet of services on 3G different from the ones they were so far offering on the 2G networks. “Opportunity for network games is enormous on 3G networks. This bouquet of services would drive the quest for rising average revenue per user”. Among other services that 3G would make popular, would be family services like multi-media. Operators should configure services before they begin to offer the higher bandwidth. Educate the customer to discover that for many of the hi-end services, 3G base would be much cheaper for him.

The experts also wanted the cost of handsets that can enable use of 3G, to be cheaper than what they are today. “A handset costing Rs 5,000 may not be cheap by our standards” Mr. Bhargava pointed out. “It should come down to Rs.3000 or even less.”
Telecom Regulatory Authority of India (TRAI) member R. N. Prabhakar advised the operators to use existing 2G networks to transmit 3G service also, to reduce costs enabling them with right software. HSPA enabled networks would be able to handle 3G transmission. He assured mobilecustomers that the regulator would keep a watch on the quality of service of 2G operation even as networks move on to provide 3G services.

Mr. Avner Amran, chief operating officer of leading 3G network provider TTI Telecom, a worldwide company with comprehensive 3G network operator service solutions experience in several continents likened the explosive growth of telecomin India as “more a kind of revolution than evolution, any operator going into 3G needs to prepare for the switching by advance preparation of the potential customer and lining up adequate applications”, he told a select audience at the summit organised by Bharat Exhibitions.Bharat Exhibitions MD Mr. Shashi Dharan said “3G about to become a reality from a dream” emphasizing the context of the event. The 3G auctions are expected to conclude by February.


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