Why 3G In India?

 

Various telecom companies, one after the other, announced their data plans for using 3G in their circles. However, consumers haven't exactly grabbed this service as they complain of very high data plans which don't make it an attractive option. How are we going to adjust to this new era of telecommunication, where we would be moving out of only voice and text 2G spectrums and entering a world of high-speed mobile broadband?

Wednesday, February 23, 2011:  Even before there were any concrete plans to make 3G speeds available, and when our netas were still busy gobbling up bribe money from 2G spectrum deals, technology and telecom circles in India were abuzz with the “coming soon” gossip about this new technology. Some had even predicted it to be available as soon as 2008; nonetheless 3G is finally here and available with most of the telcos in India. But there hardly seems to be any noticeable enthusiasm among the consumers.

It is accepted that when a technology is new and thriving, it is bound to be costly – and so is the case with 3G too. Telecom companies have invested a fortune buying spectrum from the government and they won't rest until they have a concrete plan to break-even soon. However, the consumer is going to reject anything that does not fit in his pocket. Already telecom companies, year after year, are suffering from decreasing ARPUs (average revenue per Uuer) as call rates continue to drop. In order for this next-gen technology to be successful, it has to be a win-win situation. What, then, would be the driving factor for 3G to get going in India?

Let us first examine the advantages that 3G will bring with respect to telecom in India. By now, it is common knowledge that 3G would bring in true mobile broadband to Indian consumers. What it means is higher speeds, faster data transfers (download and upload) and enhanced Internet usage on the go. Video calling is also one of the advantages. While we had a plethora of handsets even before 3G came knocking - that sported a front camera - at best, we used it to check how we are looking before an important meeting or outing. That camera has some real use now. You could use it to make “video calls” where the person on the other end could “see” you talking and vice-versa. Of course, both of you need to be on 3G with a device having a front-facing camera.

Also, we all have used USB modems that promise speeds that we never achieve. We have tried CDMA modems (from Reliance, Tata, MTS etc.) which ostensibly promise faster speeds than their GSM counterparts (Idea Netsetter, Airtel) but nothing changes. It is somewhat similar to the fictitious mileage figures that bike companies advertise and asterisk it with a “under standard test conditions” statement in microscopic fonts. We don't know about bike mileages, but Internet speed on USB modems is definitely going to increase – thanks again to 3G!

While we have listed the advantages that 3G will bring in, it will all be worth nothing if it costs a bomb to enjoy. We should also ask ourselves this question if we really needed 3G. What was the real need for it to come in? One reason is that telecom companies were increasingly facing spectrum congestion with their ever-increasing user base. 3G would get them extra bandwidth to accommodate more users.

Also, India as a growing nation is facing a broadband crunch. More and more people are getting hooked onto the Web and the need to provide high-speed broadband access is imperative. Clearly, there is a demand for higher bandwidth and data rates. Also, the ecosystem is somewhat ready. Indian consumers do not shy away anymore from downloading or purchasing stuff for their mobile. Ringtones, wallpapers, songs and news downloads are common even without 3G spectrum yet to take off fully. With 3G here, the conditions are only going to improve.

However, for it to succeed, telcos need to do more than just provide higher speeds. They would need to come up with highly relevant 3G-based services that the user would be interested in trying. Also, they need to price the data rates innovatively for them to succeed. Japan, for instance, made 3G services available about a decade ago – in 2001. But it wasn't until recently that they got consumers to embrace 3G fully. Enhanced user experience coupled with user-relevant services is one way through which the consumer might be interested in paying a little extra.

Also, with the increasing purchasing power of the Indian consumer, we see a new trend of fast handset-replacement cycles creeping into the ecosystem. Telecom companies can usher in a new era of bundling services with low-cost handsets, that are tied to them with a contract for one-two years (as in the United States) and are replaceable when it is over. Android is spreading in India big time, now with players like Intex and Micromax planning to get Android in the sub-5000 rupee range.

Telecom companies can tie-up with any of them to get people onto 3G speeds and get them to experience Internet on a mobile. There is hardly anything that you can not do using a mobile these days.

From transferring money to paying taxes, it is all there. So much so, that a huge population in India who have never used a computer, neither can they afford to buy one, could benefit from this service. Low-cost handsets/smartphones coupled with high-speed broadband on a mobile is a win-win for the consumer. The important thing is to get the user hooked onto the ecosystem first. Revenue would trickle in, sooner rather than later.

However, for the consumer to get interested s/he should be aware about what all can 3G services do. In my humble opinion, the government virtually wasted the spectrum by providing it to state-owned telecom companies first. They just did not capitalise on the head-start they had vis-a-vis private operators. Cheap data rates were somewhat there, but there was hardly any awareness. Couple that with a shoddy marketing campaign and you have a disaster in the making. No wonder, BSNL was one of the biggest losers when MNP (mobile number portability) finally came in. Some of the advertisements just “listed” the 3G features – not that any of the sarkari advertisements have been any great – but with 3G it was utterly disappointing. Consumers awareness and what the technology could do for you, having an emotional connect with the consumer is imperative to the success of any product. If only, we had some brilliant minds in the marketing wing of PSU telecom companies.

3G should start a revolution of having a new and young India connected to high-speed Internet and increasingly living their lives on the mobile Web. But again, for it to succeed there have to be initiatives/tactics that make it more relevant to the user and generate a need in it for him. As they say, there always is a method to the madness