New Delhi: India will debut its 3G, or so-called third generation, phone services on Thursday when Prime Minister Manmohan Singh inaugurates an offering by state-run Mahanagar Telephone Nigam Ltd (MTNL).
MTNL plans to offer the high-speed data mobile phone service free to its high-spending mobile customers initially, said a senior company executive, who didn’t want to be identified as he is not authorized to speak to the media.
“To the high-end users, it will be free, so that they can get a feel of it,” this executive said. “Then, once the network roll-out is complete, we will start charging customers.” He declined to give a timetable, but said a first-mover advantage in offering 3G could help MTNL acquire more lucrative customers.
A unit of Motorola Inc. is supplying equipment for the service, which won’t have its own brand name, said another executive also on condition of anonymity. MTNL’s offerings are branded as Trump, Dolphin and Garuda.
The phone firm will launch the 3G service in Mumbai soon after.
With a 3G mobile phone, a customer can potentially access the Internet or access data applications at speeds of up to 2 megabites per second. In comparison, current technologies, referred to as second generation, or 2G, typically support speeds of around 144 kilobites per second, equivalent to not more than one-eighth the speed on 3G networks.
MTNL competes with private firms such as Bharti Airtel Ltd, Vodafone Essar Ltd, Reliance Communications Ltd, Idea Cellular Ltd and Tata Teleservices Ltd for mobile phone customers in India. It is ranked sixth by customers in Delhi and fifth in Mumbai.
Given its competitive position in mobile services, it isn’t clear if offering 3G early would give MTNL a sustainable advantage.
“MTNL is generally a slow mover on the ground,” said Sheriyar Irani, co-head of research at JM Financial Institutional Securities Pvt. Ltd. “They will have to move fast with the private operators expected to launch their own 3G services by the second half of the next calendar year, assuming the auctions go on time.”
The Indian government’s department of telecommunications plans to hold auctions for wireless spectrum for 3G services starting mid-January.
A broader roll-out is keenly awaited by the industry. One analyst working at a Citigroup Inc. brokerage unit in Mumbai, who isn’t authorized to speak to the media, said: “Vodafone has the highest number of corporate subscribers and thereby, also the highest number of high-end users who would be interested in premium services like 3G.”
Meanwhile, Bharat Sanchar Nigam Ltd, another government-owned phone firm that offers services outside Delhi and Mumbai, expects to launch its 3G phone offering in Chennai by mid-January.
Ahead of the formal 3G launch and on a bullish day on Indian stock markets, shares of MTNL rose 3.08% to Rs75.20 a share on the Bombay Stock Exchange, whose sensitive index expanded 5.37%.