Since mobile services run on third generation (3G) telecom networks haven’t had a very encouraging response in developed markets, will India’s experience be any different?
While the extended delay in allowing 3G services in India continues to be a concern, local markets will gain from the evolution in technology in the 3G space. Mobile 3G phone services enable high-speed data access, allowing users to surf the Internet or download content, including music and video, at speeds faster than those supported by current cellular technologies.
Nareshchandra Singh, principal research analyst at Gartner Inc., says that the early 3G launches in developed markets such as the UK and the US were based on early versions of the WCDMA (wideband code division multiple access) technology, which resulted in a poor experience for consumers. New technologies such as HSPA (high-speed packet access) have now evolved, which enable higher data transfer speeds and capacity, resulting in better customer experience.
Early users of 3G services also bore high costs, both in terms of expensive mobile devices as well as high service costs. Costs are now much lower on both these counts. According to a report by financial services firm India Infoline Ltd, entry level HSPA handsets are expected to be in the sub-Rs5,000 range, which could be a possible catalyst for 3G services since this will address about 30% of the overall handset market.
The report also notes that value-added services (VAS) for the Indian telecom sector has been growing at roughly double the rate of overall growth rates of about 20% and 3G will enable companies to promote high-end VAS. Thus far, telecom companies haven’t aggressively sold VAS because of spectrum constraints, which will change in a 3G environment.
Besides enriching the experience of data services, 3G telecom networks even improve voice services through a more efficient use of radio waves. This will result in decongestion of networks and customers will experience better voice clarity.
But while there are these positives, Gartner’s Singh points out that the delay in the 3G auction process is not good simply because the value of technology withers with time. Some markets are already moving to new, faster technologies and India’s adoption of 3G is coming at a rather late stage.
The long wait has also been a painful process for telecom vendors, who have been positioning themselves for the launch in India.
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