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Telecom Tuesday: Should India have Bypassed 3G and leapfrogged to Next-Gen 4G?

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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.

3G-4G-Comparison

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?

"Telecom Tuesday: Should India have Bypassed 3G and leapfrogged to Next-Gen 4G?", 5 out of 5 based on 1 ratings.
  1. Tushar Patil says

    good

  2. Tushar Patil says

    good

  3. Srini says

    @Nathan – with the argument to not go into 4g now, it is almost like saying we should dig 15 feet and layer copper wires then dig 6 feet and lay optic fiber and then move to wireless. It is best if spend the 4g costs now and get closer to developed nation status. As for the need I totally agree with the 500/ month cable cost analogy. People will buy.

  4. Altaf Rahman says

    OMG!! This is exactly what i was trying to say. This is the expression that came to me when i read the link. Thanks for a nice understanding reply.

    How ever its not whetehr 3G or 4G that we should be discussing and planning. Its natural that 3G will be superceded by 4G and 5G will take over 4G and may be later 1H will come to be replaced with 2H.

    Incidentally last week I was reading the book “3001 The Final Odyssey” by Arthur C Clarke, written at the turn of the century. It mentions a lot of concepts which we could not even imagine. Its about an astronaut who by accident drifts away from the space ship (dead) and is found and revived by future humans in 3001. The story revolves around his astonishment at the things that were going around in 3001. The way of communication, the way of travel, the way of human settlements in other planets / nearby planetary systems.
    I feel to get a new concept of future requirements in present populace, such books should be read by every one. I wish I could post it as an attachment. Its a small 311 KB text format file.

  5. Arun Prabhudesai says

    Dear Altaf,
    I can completely understand your perspective and it was thoughtful comment you made… and even if you are rude to Indian capabilities, I think they are very true –

    Read this article I wrote sometime back –
    http://trak.in/tags/business/2010/02/11/google-announce-1gb-bandwidth-speed-india/

    Bandwidth in India sucks, thats the fact – and thats precisely the reason why broadband penetration in India is less than 1%, one of the lowest in the world.

  6. Altaf Rahman says

    Thanks Mr. Arun,
    To make you understand though I am an NRI, I am not a techie, I come from construction field and not well versed with IT. My comment comes from being able to see the diff. in the ways of communication. In 2008 Jan, I was in Singapore visiting a cousin. In his home, I watched a running sports live telecast on PC which I did not could even imagine. Now back in India I took the internet connection from Relcom through modem. I was so pissed of with the speed. I could not even refresh the page in 4-5 min. I thought the world has gone so far ahead and we could not catch up. Then the Nokia N 97 was released and back then it was new. I wanted to buy but my friends discouraged me saying that Indian telecommunications do not support that tool.
    Thats the reason I posted a sarcastic comment. I do not mean to be rude to Indian capabilities.

  7. Altaf Rahman says

    I am not a technology geek (as they say) but I also would like to comment on this in my own humble way.
    Idian politicians delayed India’s entry to 3G for a long time till 132 countries in the world adopted the same. May be they want to make sure their investment wont bomb.
    Now 4G is in prelim stage, may be it iwll be another 20-25 years before we go to the next gen. This will help them fully recover all the resources spent on 3G. Also make sure the technology is well tested in over 175 countries :-)
    As Mr. Viral is suggesting (I feel) that we should start building the infrastructure for 4G right now and start experiments immediately so that we dont lag behind others.
    It also helps developed nations to invest more here as the communications will be on par with theirs.
    Even if costs go up, ppl will adopt to the realities quicker. We can not wait long just coz ppl are happy with 2G right now. Our next gen may not be happy with 2G. After all Who ever thought paying Rs.500 for a monthly TV connectivity becomes neccessity in India. But every one is paying up. So will 4G customers. They get used to it.
    The point is you create a product, the demand will come first it will trickle, then it will gush.

    1. Arun Prabhudesai says

      Altaf,
      Thoughtful comment, however, trust me 10 years is a very long time, and technology is changing fast. If you have read some of our earlier post on trak.in, I think within next 5 yrs itself, we shall have close technologies delivering 1gig/s to end user. Infact, in U.S many towns already have it and Google is spending huge amounts on this…

      Its going to be interesting to see how this pans out in India

  8. Zubair says

    As you tweeted me the other day, the politicians in India are the biggest obstacle in India to emerge to be on top. 4G should have been here as and when it was released considering the market potential.

    1. Viral says

      Hello Zubair,

      The comments above have drifted in 2 sections. Some of the above commenting readers feel that 4G is not viable for India just yet. Some say 4G would be expensive.

      I agree with you that 4G should have been here, no matter with a time-lag of couple of years, but it would have saved enormous resources and would have been economically viable to bypass 3G, even as Indian markets continue to remain voice-bound market for some more years.

      Until the Indain subscribers are ripe to use non-voice technology service… possibly, India could have opted and implemented 4G.

  9. Rishie' says

    I think you’ve mentioned 17 circles by mistake (or probably I am reading it wrong). There are total of 22 circles for which the airwaves are on auction this time. Also, for the 3G Auction, the number of slots differ across circles, but within the range of 3-4. I’m happy to know if I mis-understood anything.

    Rishie’

    1. Viral says

      Hello Rishie,

      Thanks for correcting me. You’re right, the auction process is to be held for 22 circles and not 17 circles as written by me in the above article.

      Error Regretted.

  10. Vishal Sanjay says

    India had a reputation of the slowest tech adapter and now its very much confirmed to the world – all thanks to Mr. A Raja. Well Leapfrogging into 4g would be a bad idea because the government had already developed spectrums for 3G and I’m it would take years of delays to get 4G ready.

  11. Mihir says

    I agree what you say to a certain extent but it’s too early to adopt 4G when there is no standardization yet. The EU is with LTE ( where you can have simultaneous data & Voice) while in US & Asia are in favour of Wimax ( No simultaneous voice & data). We are too young technology wise & too shortsighted as government/ beaurocracy to manage & develop & build upon a technology which doesn’t have standardization & neither do we have the talent to keep a scraped technology in the running. There has been WIMAX development in India already but it is vastly used to convert it to a wifi signal.

  12. Nathan s says

    Developing country like us need 3G first .even companies hesitant to go to 4G,Because the equipment/technology cost is higher than 3G.
    People who are in need of more than 1MB speed in their mobile is too less now.We have huge pool of people using mobile but how many are ready to pay 900RS/month for 3G connection.We are developing country ,here mobile for basic uses catch up like wild fire,But we are not ready for Data uses in mobile(3G,4G) like US and Japan.It will take some time.

    1. Viral says

      Hello Nathan,

      I completely agree with your view that a developing nation like India is in more need of basic services (especially voice related). T

      hat is the particular reason that I have discussed that India as big consumer of wireless services either needs more of 2G services in form of basic voice services and instead of 3G it needs to leapfrog to 4G which would cater to the demands and needs of high-end consumers more appropriately.

      No doubt, 4G would have been more expensive than 3G.

      But, just give a thought…
      Will the telecom operators vying for the expensive spectrum under 3G technology, be able to monetize their costs and at the same time earn over and above their costs, if 4G technology is introduced by government in next 2-4 years?

      Today the world is moving towards 4G technology. Instead of investing double money : 3G waves now & 4G at a later stage, it could make an economic sense to directly bypass 3G.

      4G is more effecient in all ways over 3G technology. Paying a premium now is a better idea rather than incremental investments in both 3G and 4G technologies both.

      At best, government could have forked out limited quantity 2G spectrum to new comers to enable them to kick-start their operations and later open the doors for the superior 4G technology.

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