What Not To Expect From 3G

[ravi_patent 28]

http://www.financialexpress.com/news/what-not-to-expect-from-3g/676891/0

Few people want to read more about 3G in India. It has been such a long undulating path of hope, expectation and despair over the last 4 years that 3G has become something of a mirage for waiting consumers. We can also be reasonably sure that our average mobile consumer does not know what exactly to expect from 3G. Will it really transform his currently aggravating user experience of trying to complete a voice call without any drops or allow him to find a mobile game, which he likes without repeatedly initiating the download and getting billed for it each time? Will he really be able to make those video calls being promoted by nubile celebrities, will that new mobile health application really help him get rid of the years of excess, or will he be able to watch that YouTube clip on his mobile browser?

It’s widely accepted that unless telcos really work on developing an ecosystem around 3G services, just having access to spectrum will not change much in the lives of an average mobile consumer or in the topline of telcos. The key reason for this market structure is the difference between 3G and the earlier generations of communication technologies. When GSM and CDMA technologies were introduced, their value proposition of mobility over a fixed line connection was crystal clear, and as soon as the price points came down, the market hit the tipping point. However, from 2G to 3G, the key difference is the ability of the newer technologies to support higher data speeds, which on its own is a clear use case for only a niche section of the population.

The first beneficiary of the higher data speed will be the mobile broadband market (dongles, embedded devices and modems). CDMA operators have had a real first mover advantage in this market, with their launch of EVDO dongles and they are already adding about 2 million subscribers per annum. This market can grow for EVDO operators, but for 3G (HSPA) operators, the amount of allocated spectrum (5 MHz) very quickly starts becoming a bottleneck. One way for the 3G operators to address this issue is to increase the contention ratio (number of simultaneous users), but then the end user experience starts mimicking its current experience with 2G and the additional $3.64 billion paid for pan-India 3G spectrum starts going down the drain.

The other challenge is the limited growth in PC sales among residential users. Unlike some of the developed markets like the US where telcos are subsidising embedded 3G netbooks, in India the telcos are not going to assume inventory risk. This means the customers should not expect fancy netbooks at Rs 4,000 with the launch of 3G, as the credit risk is very high and there is a constraint on the 3G data cards that can be supported in the limited spectrum. We expect this market to grow to about 17.3 million data cards by 2014.

The other use of better access speed is in enhancing the user experience in browsing and content download. This is where device vendors, content companies and the ecosystem starts becoming very important. Unlike in dongles, where the ecosystem has limited differentiators that it can offer (e.g., mobile TV services bundled with a 3G dongle), in handset-based browsing, the entire user experience and hence revenue upside is dependent on seamless content consumption, hence requiring strong device-service integration.

The reason why 50% of global mobile Internet data over smartphones goes through Apple devices, although they account for only 14.4% of the total smartphone base, is Apple’s control over the end-to-end content consumption value chain. It may not be advisable for Indian telcos to try to replicate the Apple model, but all the ecosystem elements have to be in place to enhance end user experience and drive value out of 3G.

In the current scenario of telcos with stretched balance sheets, mobile device subsidy by telcos can also be ruled out. With the not-so-subtle and repeated hints coming from major telcos about 3G being a premium service, the content and monthly data plans may also be at a premium, at least in the initial year of 3G’s introduction.

If an average user cannot afford a mobile device that supports the actual 3G experience, cannot afford the monthly data plan charges and does not have the flexibility to experiment with content to find what he likes due to premium pricing, then the user base will be limited to a few early adopters and the current bunch of premium users. The average user may then have to wait for that elusive enhanced 3G experience, at least for the coming one year. We expect that the mass market will begin to come into the 3G fold with dropping device and service prices by some time in 2012, and the total 3G user base (excluding dongles) will reach about 77 million users by 2014.

However, the wait for 3G will be worth it, at least for the 6-8% premium customers in India who will have a greater choice of devices, content, applications and services, and a step change in user experience. To make sure this finally happens, telcos will need a lot more focus on partnerships, product and service innovation, pricing and device service integration than ever before.

—The author is associate director in the New Delhi office of Analysys Mason, a global telecom, media and technology consultancy

[parin 857]

I think price will be a major factor for people to shift from 2g to 3g

[ipkonfig 10]

^^ And telecom companies are already advertising that 3G tariff is not going to be dirt cheap.

[KanagaDeepan 1,084]

Well, to be honest... I am NOT expecting much from 3G.. Main Reason is "Docomo or RCom has NOT got 3G spectrum in my circle".. So 3G can never be cheap in RoTN for sure..

Else I have to use 3G service of BSNL.. But I prefer "STARVE until death" than selecting BSNL_3G service in my E90 ..

[Genius 817]

The question What Not to expect from 3G is s a distant one - right now not to expect 3G is topic. hell they have sold out that even they have not got.

[kshah 452]

Well, to be honest... I am NOT expecting much from 3G.. Main Reason is "Docomo or RCom has NOT got 3G spectrum in my circle".. So 3G can never be cheap in RoTN for sure..

Else I have to use 3G service of BSNL.. But I prefer "STARVE until death" than selecting BSNL_3G service in my E90 ..

Its not BSNL Alone. BSNL may not be upto the mark but in US, Ask AT & T user and Verizon / Sprint user. AT & T user will be crying for speed always.

[Mufaddal 678]

in usa AT&T is still edge in many areas

they have very spotty 3G coverage

lol , thats USA

only verizon has best 3G ( evdo ) coverage in USA ,

CDMA ROCKS !!!

[raccoon 53]

It might just be that telcos (esp. AirHELL) are creating a li'l hype around 3G pricing and then when it does come in the market it may not be priced that high... maybe moderately high; so users may crib less about the price than otherwise. Only time will tell.

Anyway, unless its cheap, at least I have no intention at all to subscribe to 3G. For the limited mobile internet I use, I can live with EDGE speeds... and even that isn't really indispensable, as long as I have BB on comp/lappy.

Edited September 4, 2010 by raccoon

[ipkonfig 10]

I am more interested in the implementation of MNP.

3G was bound to occur at some point in the future. And as the operators mention, it might take several years for the prices to stabilize to affordable levels.

On the other hand, we require MNP. That is something which the subscribers have been waiting for some time (and something which is within the reach of every subscriber - regardless of they being rich or poor).

One just needs to pay up nominal fees for the migration. But, I am still having my doubts regarding the implementation of MNP in this country after October 2010. The statements recently made by certain telco heads are all pointing to that aspect. That they have assurance from the so-called "insider sources within the government" that MNP will NOT be implemented after October 2010.

[rajeshkatiyar 3]

The only benifit of 3G will be it will be available Pan India across small Towns So

the people of smaller towns will have acess to high speed data. EVDO is being promoted

as luxary services will be confined to Metros and eventually die like CDMA 1X

[commonman 228]

^^^

Are you aware of the present extent of EVDO coverage? its way way beyond the metros.

[faizca 5]

hopefully cdma operators get extra spectrum for 3g as promised ....then evdo is being launched o their networks ....whole scenario will be different..gsm telcos will be crying as they have spent huge amount in getting

3g spectrum.

[jdjain 0]

I do not think 3g will impact normal indian life , it will only impact rich inidan , because they can paay huge data related service fees , aam aadmi is just watching from side ,

my bet is on Telecom GOD , Mukesh Ambani , this man after losing his company , come back like Terminator

Now terminator has improved a lot its T-1000( 4G)

koch tu bhala hoga indian poor ka

[jdjain 0]

CDMA always rocks , it is still the best tech to provide data service at very less spectrum ,

Look at MTS , they come with evdo , and people just like it

I wonder Reliance is very slow on Evdo , even tata too,

I think they think , EVDO dies when 3g comes (gsm)

[KanagaDeepan 1,084]

I do not think 3g will impact normal indian life , it will only impact rich inidan , because they can paay huge data related service fees , aam aadmi is just watching from side ,

VERY TRUE... Atleast for the time being...

CDMA always rocks , it is still the best tech to provide data service at very less spectrum ,

Look at MTS , they come with evdo , and people just like it

I wonder Reliance is very slow on Evdo , even tata too,

I think they think , EVDO dies when 3g comes (gsm)

Yes, MTS keeps on rocking nowadays... They are increasing EV-DO coverage faster than Tata and Ambani..

Even there is a rumor saying that they are going to accept Foreign handsets (with me1d) readily and also allow EV-DO on them too.. (Rumors say that this is due to MTS being a russi@n co and most foreign handsets being given sub$idized by U$ c0s ) Everybody knows well that Russi@n g0vt is helping MTS in all its possible ways..

[kshah 452]

Imo 3g is not at all a matter of discussion for majority of Indian except for the fact that it earned government never before revenue from auctions.

With effective penetration of about 7% internet or connectivity will affect hardly few like us. That too is just hypothetical.

Edited September 13, 2010 by kshah