Why 3G Will Be The Backbone Of 4G In India

By November 9th, 2015 AT 10:33 AM

With the telcos planning to focus on 4G services in the coming year, the market for 3G in India faces an uncertain future just four years after its commercial introduction and only five years after the telcos spent nearly $15 billion for their 3G licenses.

5G-speed-india

While there is a little doubt that 3G services introduced India to mobile broadband and its vast potential, 3G has not led to mobile broadband revolution many had been hoping for. The initial response to 3G can at best be described as lukewarm. Patchy services coupled with high price for devices ensured limited adoption of 3G services in the country. The controversy surrounding 3G roaming didn’t really help.

The 4G ecosystem has started to develop now in India. Airtel has already launched 4G in around 300 cities and other incumbents like Vodafone India and Idea Cellular are likely to launch 4G in key selected cities by the end of this year or early next year. Besides, Reliance Jio recently spoke about Lyf, its brand for 4G devices. The company is likely to launch 4G services by the end of the year or by early next year.

Besides, the prices of 4G devices are steadily coming down making it more accessible for mass-market adoption. Significantly, Airtel is offering 4G at almost similar tariff to 3G means that the road ahead is not clear for 3G and there is no clarity on return of investment for 3G.

Paradoxically, even as service providers increase 4G deployment across the country, 3G is almost critical to the incumbents to deal with the data tsunami. The incumbents, like Airtel, use Circuit Switched Fall Back (CSFB) technology to offer voice on 4G network. This means that 3G and 2G network become very important for the company to be able to offer seamless voice experience to their subscribers. Also, 3G network pitches in wherever 4G network is unavailable. Besides, being a new technology 4G might face some technical issues initially which is not the case with 3G. All this means that ubiquitous 3G coverage is important for 4G to make a mark. The coming year might witness a number of 4G launches but 3G would be working in the background to make it work. So while 3G might not be promoted by telcos, but there is no denying that it will be the backbone of 4G.

The service providers are likely to use a combination of 3G and 4G to meet the data needs of their subscribers. This is apparent if one goes through the recent results of the telcos. For instance, Idea has expanded 3G coverage from 2897 census towns at the end of Q2 FY15 to 3584 at the end of Q2 FY16. This is even as the company is planning to launch 4G services by the end of the current calendar year.

On the other hand, Data ARPU for Airtel has increased from Rs 150 at the end of September 2014 to Rs 193 at the end of September 2015. Data consumption has risen from 563 MB at the end of Q2 FY15 to 765 at the end of Q2 FY16 for Airtel. All this is the result of 3G expansion by the major incumbents from 2014 onwards.

There has also been a significant increase in the number of 3G cell sites for all incumbents. For Airtel, 3G cell sites have increased from 38,055 at the end of September 2014 to 62,447 at the end of September 2015. On the other hand, for Idea the cell sites have increased from 25,164 at the end of Q2 FY15 to 39,867 at the end of Q2 FY16.

For marketing purposes the incumbents might promote the swankier and smarter 4G but 3G would be quite indispensable for mobile broadband network of the telcos.

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Madhan KumarDUANEAshwatha Narayana N.TGowtamzen Recent comment authors
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Ashwatha Narayana N.T
Ashwatha Narayana N.T

No comments, as first time using this information.

Vipin
Vipin

This article is not in sync with International trends.

For example : Telenor Norway to shut down 3G network in 2020; five years before 2G ( rethink-wireless.com/2015/06/03/telenor-3g-2g.htm).

Spectrum used for 3G (2100 Mhz) can refarmed for use of 4G carrier aggregation along with other bands like 850 , 1800 & 2300 Mhz.

zen
zen

You are right, the spectrum can be refarmed for 4G carrier aggregation but here the author is trying to highlight that 3G will continue to be relevant in India for a long time…it will be some time before 4G would be mature to handle the entire data requirement of a country as large as India.

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