Operators in India are still fixing the loose ends in their 3G networks but 4G technologies are already knocking on their doors.
The spurt in mobile-based applications, games, video and other data-heavy content means that adopting technologies that offer higher data throughput rates, reduce latency to improve user experience and better utilise scarce spectrum is the way forward. And 4G allows more data to be transferred over the same bandwidth used by 3G technology and at higher speeds without substantial costs to the existing infrastructure. Operators can introduce new exciting services such as HD (high definition) video blogging, HD video on demand, media mobility, and online gaming, besides bringing a significantly improved business proposition with 2.5 times higher capacity, lower cost per byte and media mobility.
India has been a late entrant to the 3G game but the auction of broadband wireless access spectrum last year is expected to be the catalyst for the launch of 4G services, which are believed to be round the corner. Moreover, the infrastructure required for upgrading to 4G is easy if the 3G system is already in place. Indian operators hope that the transition to 4G technology can be done smoothly by using core infrastructure of the 2G or 3G networks. The new infrastructure would require minimal funds for Indian telecom operators who have almost set up the 3G infrastructure. “We have a single RAN box where you can upgrade 3G to 4G or LTE to Wimax. Everything is in one box. They will need minimal funds to upgrade to 4G,” says a top official with Chinese telecom equipment provider Huawei.
However, developing the full eco-system for 4G will take time. One reason is that in India, voice still dominates the traffic unlike in Europe and the US where data is much in use. Industry observers say that the shift from voice to data will take time and could take a couple of years for the right 4G eco-system to develop. The mass market for data is a basic requirement for 4G technologies like LTE to be profitable. Further, operators are still confused over the choice of technology for 4G services and remain unsure whether to adopt LTE or WiMax.
Also, once 4G services are launched, consumers will have to switch to 4G enabled handsets, which are rather expensive. Even though smartphone penetration is set to explode in India, currently less than 10% of all users have smartphones or good 3G devices. And in the semi-urban and rural parts of the country, the success of 4G services will hinge on the price levels that device manufacturers are able to offer in the near future. In a country like India, where average revenue per user hovers around Rs.200 (and where 95% of consumers are pre-paid users), telecom companies need to push their ARPUs to around Rs.500 just in order to break even for 3G technology. Under the circumstances, any sizable adoption of high-end 4G handsets in an ultra low-cost handset market like India looks far fetched.
Globally, operators are proclaiming 4G as a revolution in communication technology. But at a time when when even 3G services in India have yet to be streamlined and are still years away from mass adoption, predicting the outcome of 4G services seems fatuous. And with players having stretched nearly to their limit by 3G spectrum and returns not coming any time too soon, India may well be forced to stay a laggard on the 4G front.
India has been a late entrant to the 3G game but the auction of broadband wireless access spectrum last year is expected to be the catalyst for the launch of 4G services, which are believed to be round the corner. Moreover, the infrastructure required for upgrading to 4G is easy if the 3G system is already in place. Indian operators hope that the transition to 4G technology can be done smoothly by using core infrastructure of the 2G or 3G networks. The new infrastructure would require minimal funds for Indian telecom operators who have almost set up the 3G infrastructure. “We have a single RAN box where you can upgrade 3G to 4G or LTE to Wimax. Everything is in one box. They will need minimal funds to upgrade to 4G,” says a top official with Chinese telecom equipment provider Huawei.
However, developing the full eco-system for 4G will take time. One reason is that in India, voice still dominates the traffic unlike in Europe and the US where data is much in use. Industry observers say that the shift from voice to data will take time and could take a couple of years for the right 4G eco-system to develop. The mass market for data is a basic requirement for 4G technologies like LTE to be profitable. Further, operators are still confused over the choice of technology for 4G services and remain unsure whether to adopt LTE or WiMax.
Also, once 4G services are launched, consumers will have to switch to 4G enabled handsets, which are rather expensive. Even though smartphone penetration is set to explode in India, currently less than 10% of all users have smartphones or good 3G devices. And in the semi-urban and rural parts of the country, the success of 4G services will hinge on the price levels that device manufacturers are able to offer in the near future. In a country like India, where average revenue per user hovers around Rs.200 (and where 95% of consumers are pre-paid users), telecom companies need to push their ARPUs to around Rs.500 just in order to break even for 3G technology. Under the circumstances, any sizable adoption of high-end 4G handsets in an ultra low-cost handset market like India looks far fetched.
Globally, operators are proclaiming 4G as a revolution in communication technology. But at a time when when even 3G services in India have yet to be streamlined and are still years away from mass adoption, predicting the outcome of 4G services seems fatuous. And with players having stretched nearly to their limit by 3G spectrum and returns not coming any time too soon, India may well be forced to stay a laggard on the 4G front.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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IIPM: Indian Institute of Planning and Management
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
IIPM Best B School India
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM's Management Consulting Arm-Planman Consulting
IIPM Prof. Arindam Chaudhuri on Internet Hooliganism
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
