More than a year after its launch, 3G adoption in India remains subdued at 10-12 million users due to various issues like poor network quality as operators are cash-strapped to spend on 3G expansion, low penetration of 3G enabled handsets, unavailability of local content, absence of a killer application (similar to what SMS was for 2G) etc.
Higher spectrum prices also forced operators to offer 3G services at a premium costing almost 5 times the existing GPRS/EDGE based data plans.That made Indian subscribers turn cautious about 3G resulting into less than 2% penetration despite 10-15% penetration of 3G enabled handsets. One of the other factors that go against 3G is allocation of just 5 MHz of spectrum as against 20 MHz in case of 4G. India has a very high subscriber density per Base Transceiver Station – BTS (more than 2,000 in metros) as compared to other countries. If sizeable proportion of it decides to opt for 3G, with very high data traffic compared to 2G, 3G networks will be congested very soon.
Globally, in most markets, 3G adoption picked up in the third year from the launch and we can expect that operators may improve the quality of 3G service in a year or two. Even assuming that 3G picks up in 2 years from now, most of the 3G users will be predominantly mobile users with a medium data requirement like accessing emails, web-portals etc leaving the space of other portable mobile devices like tablets, laptops, gaming consoles etc requiring high speed broadband for live HD video streaming, gaming etc unoccupied, paving the way for 4G.
Technology Choice – Wi-Max vs LTE
Worldwide, for 4G, Wi-Max is more widely adopted technology than Long Term Evolution (LTE) having a user base almost four times that of the latter but the latter is growing much faster than the former. North America (Verizon and AT&T in US), Japan and China are the major drivers of LTE worldwide. North America accounts for more than 40% of LTE’s global set up.
In India, out of the eight entities who bagged 4G licenses, only BSNL and MTNL have opted for Wi-Max platform whereas private players have made their intentions clear to go for LTE. The difference between Wi-Max and LTE is not as stark as GSM and CDMA apart from being promoted by two different associations – Institute of Electrical and Electronics Engineers (IEEE) and 3rd Generation Partnership Project (3GPP) respectively. Wi-Max has capacity to accommodate voice which LTE doesn’t allow but LTE allows better integration with 2G and 3G as compared to Wi-Max.
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4G Gameplan of Indian Players |
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|
Players |
4G License Areas |
Progress on Roll out |
| Reliance Infotel |
Pan India – 22 Circles | Proposed roll out in 2012 but delayed couple of times. Have adopted LTE-TDD. Most probably partner with Network 18 for content. |
| Bharti Airtel |
Kolkata, Karnataka, Maharashtra, Punjab |
Has launched services in Kolkata and Bangalore (Karnataka). Has adopted LTE-TDD. Eying on Qualcomm’s Mumbai and Delhi licenses. Partnered with ZTE for Kolkata, Huawei for Karnataka, Ericsson for Punjab and Nokia Siemens for Maharashtra. |
| Aircel | AP, TN, W. Bengal, Bihar, Orissa, Assam, N.E., J&K |
Intends to start services in 2012. No specific plans disclosed yet. |
| Qualcomm | Mumbai, Delhi, Kerala, Haryana |
Settled the dispute over licenses in March 2012. No specific plans disclosed yet. |
| Augere | Madhya Pradesh | Claims to be the first company to launch 4G in India on LTE-TDD. Has partnered with Ericsson. |
| Tikona | Gujarat, UP (E), UP (W), Rajasthan, HP |
It already offers fixed broadband to households and corporate using WiFi technology. 4G roll out is in progress. |
| BSNL | 20 Circles – All India except Mumbai and Delhi |
Intends to surrender its BWA spectrum in some / all the 20 circles. |
| MTNL | Mumbai and Delhi | No specific plans disclosed yet. |
| Source: Industry and CARE Research | ||
Ecosystem challenge for 4G– Device support is lacking
Unlike 2G and 3G where spectrum bands were fairly uniform across various countries resulting into mass production of handsets bringing down the handset prices, 4G is offered in different frequency bands in different countries. Around one third of 4G subscribers today, predominantly in the US, served by Verizon and AT&T, are on 700 MHz band whereas Europe uses 2.6 GHz band. China and Japan are using 2.5 GHz and 2.1 GHz respectively. All the private players in India have received 4G spectrum in 2.3 GHz whereas BSNL and MTNL have it in 2.5 GHz. This puts limitations on interoperability of 4G devices across regions with different spectrum band.
It can be seen from the chart below most of the devices, including dongles, routers, smartphones, tablets etc, are available on LTE-FDD that too in 700 MHz band due to adoptability of the same in US market. LTE ecosystem is evolving rapidly with 347 LTE devices by 63 manufacturers available in the market as in April 2012. Availability of LTE devices increased by 76% over a six month period from October 2011 to April 2012.
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Global LTE Device Availability |
|||
|
LTE-FDD |
LTE-TDD |
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|
Spectrum |
Number of |
Spectrum |
Number of |
| 700 MHz |
142 |
2300 MHz |
36 |
| 800 MHz |
52 |
2600 MHz |
41 |
| 1800 MHz |
50 |
||
| 2600 MHz |
65 |
||
| 800/1800/2600 |
43 |
||
| Source: Global mobile Suppliers Association and CARE Research | |||
4G remains a data only service in India VoIP is yet to arrive
4G, unlike 3G, does not offer Voice-based services through mobile networks but as Voice-over-Internet-Protocol (VoIP). The main difference between normal telephony and internet telephony is that in normal telephony, circuit switching technology is used, whereas Internet Telephony is based on packet switching technology. In the developed markets like US and Sweden where 4G has been rolled out, it is offered as a data only package, integrated with 3G packages for voice. In short, a user who is logged on to a 4G network will be seamlessly transferred to a 3G network the moment he receives a voice call. Voice-over-LTE (VoLTE) is a new form of VoIP and is under trial phase in some of the countries.
In India, not all the 4G service providers have the option to provide seamless 4G and 2G/3G service offering both data and voice services on the same handset as only Bharti, Aircel, BSNL and MTNL among 4G licensees have 2G/3G licenses. This could be possible in future if government accepts TRAI’s recommendation to make the spectrum technology neutral allowing the operator to provide 2G, 3G or 4G services using the same spectrum. As there is no clarity whether VoIP will be allowed fully in India, currently 4G services are limited only for data related usage.
Stable growth prospects, lower operating costs support business model
Unlike 2G that has stuck up in linear revenue growth implying additional revenue coming primarily with proportional increase in subscribers as ARPUs are stagnated, 4G has fairly non-linear model with prospects of higher profitability as ARPUs are expected to be a lot better than 2G. Also, the limited competition in the sector, as there are just 3 players in a circle today, will help in holding tariffs unlike 2G. Millions of SMEs in India should potentially offer a stable and high volume market for 4G operators.
Conclusion
When 3G was launched in India more than a year back, the USP was faster internet, video calling, live streaming of videos etc. Now 4G is being launched with a much faster internet without voice and without a developed ecosystem. The next couple of years will see a clash between the two technologies as most of the operators offering these services are different.
Although superficially it looks like these two technologies offering the same user experience with some plus and minus might cannibalize each other, a deeper gaze tells us that the two technologies can co-exist albeit not in separate silos. As seen in the developed markets, 3G will be a more voice and moderate data intensive service which will be a natural transition to existing 2G users whereas 4G will be predominantly data intensive technology replacing other broadband services.
A target group of 30 million postpaid subscribers, who on an average pay more than Rs. 500 a month as their mobile bill, almost 5 times their prepaid peers, 431 million subscribers who have internet ready handset but not all of them are active and around 100-120 million out of these carrying a 3G enabled handsets offer a sizeable target group for 3G services. On the other hand, more than 100 million internet users in the country, 100s of thousands new tablet users being added every year and millions of potential TV viewers waiting for the cheaper video-on-demand facility in their drawing rooms, and 100s of thousands SMEs waiting for the right internet connectivity offer the target group for 4G services. CARE Research therefore feels that in India, in the race of technologies, 4G will be a serious contender.
As a reader whats your take will 4G be a HIT in India or it will be another 3G in making do share your views.
Solomon October 22, 2012 at 10:58 am
3G/4G will succeed in India only if Operators combine them with Fibre plans. It is utter greed on the part of the Operators to provide just 1-10 GB of 3/4G data at such abominable prices. I think Operators should bundle Fibre to Home at 20 Mbps DL/10 Mbps UL with 3G/4G for households. They can provide 50GB of data free and shared 3G/4G plans within the same data limit for the entire family are a monthly rate of Rs 1500. This will see better adoption of services and the overall profit will also boom. I can currently get 45GB of internet at 20 Mbps/ 10 Mbps from MTNL Mumbai. If these plans are combined into shared data plans they will surely be a success. In such cases customers will use 3G/4G while only on the move and will change to WiFi based Fibre Internet when at home.
Arvind Kumar September 2, 2012 at 11:31 am
The 4G Technology would be going to be big hit but there are certain things
that should be taken care
1) 4G can be revolutionary technology, it can change face of 125 crores of people in India after PSTN phones
2) Indian Government should back this and there should be transparent distribution of spectrum.
3) We must look after the business opportunities, there is huge scope of application, the rural india should be able to made money from these application then only they would be able to pay the highest cost of service
4) In India where roads are not reaching the broadband can be reached,
There people can reduce the distance with video calling but they must be aware about the feature/applications.
MAHESH KUMAR August 21, 2012 at 11:56 am
If we take a look at the International Standards then none of them is providing 3g & 4g services .
Reliance Infotel’s 4G will be big hit in upcoming years in metro cities of India but I think it will affect wired broadband services more as compared to wireless 3G services .
Reliance is going to bid in the next auction for 2g license if they get it then get ready to kick all the 3g services from metro cities atleast .
ravi das May 29, 2012 at 4:15 am
I don’t think that 4G will be a big failure.It is obivious that everybody is looking at it as a high speed internet than anything else.So i think it ll replace broadband soon enough.I mean who will take a broadband connection if getting incredible speed at same price.
kanji May 19, 2012 at 8:32 pm
4G already launched here in ahmedabad in 2009 by BSNL as WIMAX services.Although having good speed, not much interest shown by public.It will be a Big failure. However, BSNL is surrendering the spectrum because of a lower quality part of the bandwidth is alloted to BSNL.It was forced to pay higher charges for lower quality ,compared to private operators ! After all BSNL is a PSU looted by govt. itself.
sushant gupta May 19, 2012 at 11:12 am
will 4G go the 3G way is a difficult question since 3G itself has not been a mature product till now, as a matter of fact even adsl technology has not been used to its potential.there may be a lot of people who are craving for bandwidth but still a very large portion of consumers are very price sensitive and they might not be ready to pay hefty amounts,also operators need to simplify services and show some interest in strengthening network so that it becomes more and more responsive and stable…….i still think current telecom scenario in our country needs a strong state backing through bsnl and mtnl,but they need to work harder to gain consumer belief in their service,we just cannot expect private operators as they are solely here to gain profits.
Esmail May 18, 2012 at 6:51 pm
True, I’m using MTNL 3G connection in Mumbai, they have already blocked access to every single torrent site possible, saying that its a regulation passed by the High court. With the absence of Torrents we wont be able to download movies from the internet, which comprises a major share of data usage. The only requirement for high bandwidth now remains for online video streaming without buffering.
Ganesh May 18, 2012 at 2:11 pm
4G has only one mission – reduce the tariff of 3G. Only very people will adopt 4G, I think. It will take at least 3 years or more for 4G to become close to mainstream.
SANJAY May 18, 2012 at 1:25 pm
The question is not who offered free Incoming calls. Question is what will be penetration of 2.3 GHz signals. How many equipments will be required to provide Umbrella coverage. The operators who have invested so high in acquiring spectrum how they price the services. There are only 3 Operators in a circle. Since the Govt. PSU is surrendering the spectrum and not interested in launching 4G services so it is not going to be afforable for general public. The Main Playing operator will provide services in cluster first to target commercial wire line ADSL costomer. 3G still needs 5 Year in India to get customers so 4G becoming popular as well affordable is really a tough job in coming next 10 Years.It my own view that it is too early to launch 4G in india while 4G technology it self is in infant Days of evolution. Any way Operators may be knowing more facts and may be optimistic on some of the survey or market realities of demand of 4G services that is why they have invested a lot in acquiring 4G spectrum as well as licence to launch 4G services. So good luck to operator as well as potential user
Abhijith May 18, 2012 at 12:58 pm
Airtel ill buy out Augere . . .
Mark May 17, 2012 at 6:56 pm
im waiting for 4g now
btw good post
Sunil May 17, 2012 at 12:33 pm
@sampat
Incorrect Mr Sampat it was BSNL who offered free incoming first not Ambani owned Reliance. It was the compulsion of other players to offer Free incoming to match the competition
sushant gupta May 17, 2012 at 11:20 am
i do not understand why so many expect mukesh ambani to create 4G revolution,they might have succeeded with CDMA but why do we forget what happened with their foray into oil marketing by opening chain of petrol pumps, trying to control the business in a big way……..it failed miserably,according to me a meaningful 4G deployment can only be done with a strong government backing through creating stable and strong infrastructure,i think govt. should ask and fund BSNL to create the 4G network so that it not only serves its own purpose but also provide people with good and affordable service.
Ghanta@ghar May 17, 2012 at 10:18 am
@Riju
wo was the first to offer roam free plan, free incoming while roaming that to at the nomianal price of 13 rs.
do correct your fact before commenting
Riju May 17, 2012 at 12:05 am
Man do you know the NO.1 mobile/landline/broadband service provider in kannur?
Why it is BSNL?
help u May 16, 2012 at 11:16 pm
what are the bsnl 7.2 mbps plans? How much download speed do u get?
dskushwaha May 16, 2012 at 11:13 pm
Unlike 3G, $G is yet to be evolved- means 4G technology is not mature enough. So by passing 3G and adopting 4G was not food for a country like India.
By not auctioning 700 MHz Indian Govt. has done good for the country as 700 MHz can be milked out in future.
sachin May 16, 2012 at 11:07 pm
no man bsnl never introduced anything new in indian mobile phone industry.they will just copy once they started loosing customers @Sandeep
Kaushik May 16, 2012 at 10:29 pm
4G has already outsped 3G in terms of bandwidth. But the biggest mistake was committed by the Government we elected in 2009!
1) 3G should have been bypassed and direct implementation of 4G should have been enforced.
2) Auction of BWA spectrum at 700MHz should have done also along with the auction of BWA spectrum at 2300MHz.
Our policy makers should really learn from their Chinese and South African counterparts!!!!
Sudhakar May 16, 2012 at 9:58 pm
Sagar (Ranchi) :
Well said. +1
Pratik May 16, 2012 at 9:47 pm
this is absolutely right.
instead of trying to break new speed records,
how about tiered plans which are based on unlimited speed at that price point.
how about 1000–2mbps unlimited
1500— 3 mbps
so on
Sayan Chattopadhyay May 16, 2012 at 9:08 pm
in the day time bsnl provides upto 4.2mbps speed.
Sandeep May 16, 2012 at 8:09 pm
@sampat
Let me clear u, He who not Mukesh Ambani gave us free incoming calls, It was BSNL who introduce first free incoming call on cellular network
Rohit May 16, 2012 at 7:21 pm
If they offered 3G at low cost they might recovered their cost… So many low cost 3G handset are available in the market.
Aiswarya R L May 16, 2012 at 7:08 pm
Good to know that …
Hope u haven’t tried BSNL 7.2 mbps and compared airel 7.2 mbps with bsnl 2mbps
Vineet Koul May 16, 2012 at 7:01 pm
Today I Have Emailed All Telecom Officers Regarding Such High Prices Of 3G And Lets See What Will Be Its Impact Of Email On Them !
irfan May 16, 2012 at 6:53 pm
i am using vodafone 3g in upeast circle works 99 % of the time perfect without any issues data speed is 5– 6 mbps at all times but of course it is 3 times costly than BSNL 3G@Sayan Chattopadhyay
irfan May 16, 2012 at 6:51 pm
unless and until the 3G and 4G services are made cheaply avaliable to the customer the companies are not going to be benefiited from the money we spend on the services in india quantity is more important than the quality hence more data needs to be povided in the data packs the wired broadband is very limited in india hence these 3G operators should cater to the needs of data hungry people like us instead of providing VOIP and video calling the company should use its 3G resources to provide broadband with high data usage like 50GB or something in 1000RS
dskushwaha May 16, 2012 at 5:57 pm
Torrent sites may be blocked??? ridiculous
TARun dhingra May 16, 2012 at 5:53 pm
Sagar May 16, 2012 at 5:36 pm
4G too will be a flop like 3G , if the tariff will be out of reach of common man. It is the common man who decides the success of all technologies.Hope 4G will be a success .
Sayan Chattopadhyay May 16, 2012 at 5:31 pm
sometimes between 9pm-12am i’m facing too much congestion issues with bsnl 3g.
sampat May 16, 2012 at 4:56 pm
I AM ALSO FOR MUKESH AMBANI.
HE IS THE KING OF ALL BUSSINESS . HE GIVE US FREE INCOMING CALLS IIN 2003 AND ITS TIME TO MAKE 4G a service for normal peoples
Guest May 16, 2012 at 4:27 pm
Galaxy S3 or HTC One x supports LTE – TDD 2.3 Ghz ? If it supports in order to make or receive a call, do wee need to switch to 2G/3G mode everytime by using Airtel 4G here in Bangalore?
novicefreak1 May 16, 2012 at 4:18 pm
Basic question but very thoughtful…..
Can any one clearly mention, why at all thirsty speed on internet is required? As mentioned above when content is not there what the use,,,,,how long you can watch movies online that too on a small limited mobile screens?? Play games…how much??? send messages, update status,,,how many times and wats the ideal speed for that??? I for once think why hype and live in a cloud!!!Better read books and get knowledge!!!:) No offence intended please……
dskushwaha May 16, 2012 at 4:11 pm
There are alot of other uses of faster speeds other than illegal stuff, for example with faster speeds cloud services will become more popular, access to services like Netflix will become possible. We will actually be able to watch YouTube videos without having to painfully wait for them to buffer.
Devraj May 16, 2012 at 3:54 pm
I think 4G will grow slowly than we expected
3G is also growing slowly than expected. Still is not available in small cites having population around one lakh
prices will not come down speedy because of less operator less competition
Higher price means subscriber base will not grow speedily.
PD May 16, 2012 at 3:43 pm
All eyes/ears are on the new spectrum auction scheme and its impacts on subscribers! How hard the HIT will be a million$ question ! The high-end users are actually fun-loving, tech-savvy groups and for them anything/something new are like taste buds. Even now 3G is a non-starter as far as the “aam admi” is concerned. So, as of now, what awaits 4G is unpredictable
RajaKumar May 16, 2012 at 3:25 pm
It will be come big hit if Mukesh Ambani makes a difference in pricing. Else it will be another 3G story.
I am eagerly waiting for it.
kavin May 16, 2012 at 3:14 pm
have u heard about of “” having rice with no fire to cook”"
whether u get 8mbps or 80 mbps never matters,, becoz torrentz and online sharing sites are getting blocked or restricted .. may be few month they may survive..
when u dont have anything to download what is the fun of speed…
live tv???? boss in india u get hd channels at price of sd channels in dth services.. so unless ur tv freak its no use…