Telecom Tuesday: Should India have Bypassed 3G and leapfrogged to Next-Gen 4G?
The third day of spectrum auction of 3G telephony saw the all-India license bid touching Rs.4324 crore at the end of 16 rounds. The government is likely to out-perform its set target of mopping-up Rs.35000 crore from the sale of 3G and Broadband Wireless Access (BWA) spectrum by a wide margin.
The government is auctioning three slots of 3G airwaves in 17 telecom service areas while two slots are up for sale across the country for BWA auction. Just as India gets set to herald an era of 3G telecom markets, the world is bracing for the next generation 4G technology.
India will be among the last countries to access 3G technology. Nearly 132 countries across the world already have 3G technology and mobile services in form or the other.
Even in the poorest region of Africa, 31 countries already have access to 3G. Emerging economies like Brazil, Argentina, Mexico and Indonesia among other countries had access to 3G services for many years now.
So the question really is –
Is it too late for India to usher in 3G technology? Should India have directly leapfrogged to 4G?
What is 4G Technology
Fourth-generation (4G) mobile wireless broadband services, also known as Long Term Evolution (LTE), are designed for services such as high-speed internet connectivity, streaming multimedia services such as TV broadcasting and high-definition video conferencing, media mobility and even online gaming.
4G technology allows more data to be transferred and at a higher speed than 3G technology. A number of developed countries such US and Japan have started initiatives to move towards 4G technology.
Comparing 3G and 4G
Unlike 3G technology which requires a minimum of 2×5 MHz carrier, a superior 4G technology can operate using a minimum 2×1.25 MHz carrier, although both the technologies are focused on ramping up internet data usage but at a different speed altogether.
While the speed of mobile telephony under WiMAX’s technology is expected around 30 Mbps, that of LTE is a more than three times faster along with ease in compatibility with older phone models and networks. Compared to 3Mbps speed offered by 3G services, LTE can offer speeds of up to 10 Mbps.
In the current bidding process, the 3G spectrum is likely to be allotted for only 3 slots in most circles. This would lead to issue of spectrum at higher prices to limited players leading to a monopoly like situation.
In a competitive environment, the prices are market determined and demand-supply oriented. Thus, 3G allocation would prove out to be a costly service to the final subscribers due to limited spectrum availability with only three slots being offered per circle.
Is 3G really needed for India’s Voice market?
The telecom regulator TRAI has already floated the pre-consultation paper process for superior 4G technology even as 3G slots are being auctioned. With the Indian markets being primarily led by voice services, the demand for the premium services led by 3G could be hit until subscribers are game for higher value-added services.
With the early intentions of the TRAI to roll-in 4G services in next 2-3 years, the winners of the 3G bidding process would have to squeeze-in to monetize themselves from the premium 3G services before the roll-out of the next generation 4G technology, raising fears of rendering 3G services somewhat obsolete.
If most of the 3G spectrum is used for basic voice communication, an area where many new operators are still vying for more spectrum requirement, the technology would remain an under-utilized initiative serving the purpose of 2G spectrums but at a higher cost. The 2G spectrums have not been allotted for almost two years now.
Will 3G technology actually serve the country’s purpose?