Present and Future of 3G in India

The world is fast changing with increasing trends in the communication sector. Drastic shifts have happened in the way people used to communicate. The adoption of technology, not only in the metros but also in the rural areas is observed in today’s time. This is primarily due to the growing consumer awareness and adaptability towards newer technologies.

In today’s scenario, the increasing use and understanding of technology is augmenting the growth of the communications market in India. The communication market in India is fairly influencing the growth, especially of the mobile handset and service providers. Following are some interesting statistics supporting the same:

As of May, 2011, the mobile subscription base stands at more than 811 million in India which is the world’s second highest after China. The most interesting part about these millions of subscribers is that they are fast changing their preferences to a better mode of communication. No doubt about the fact that the 2G market in India is one of the fastest-growing mobile services markets in the world but the change to 3G is happening. An example of how big 3G is with respect to Indian markets is, GOI expecting INR 35,000 earned INR 67,719 crores against in the 3G spectrum auctions.

Here is an analysis of the present and future of 3G market in India:

Consumer Switch:

Elite subscribers in the high-spending tech-savvy segment are likely to shift from 2G to 3G services. A variety of consumers are shifting from 2G to 3G networks primarily in the urban areas where consumers have shown a higher preference for data services and have better affordability. Currently there are around 11 million 3G users in India but the number is expected to reach 400 million by 2015.

Pricing:

The pricing strategy adopted by various players is very competitive and cheap to start with. The current rates being offered at discounted prices for consumers to experience the service and then take a decision is being adopted. 3G is being looked at a long term investment with high returns.

Handsets Sales:

The decreasing price of 3G enabled handsets is also aiding the whole business. The increasing affordability across different demographics in India is also one of the driving factors. Thus we expect the 3G market to grow invariably.

Tariff Plans:

The tariff levels in India are among the lowest in the world, and this is the primary reason for the wide adoption of mobile services in the country. The mobile penetration rate is expected to reach 97 percent by 2015, with the rural population expected to adopt mobile services.

Communication & Entertainment:

The increasing use of applications on 3G phones is set to drive the sales and awareness as well. This in turn will also act as a revenue generation business for TSPs in the future. The growing popularity of mobile entertainment is a significant growth factor as access to mobile games and video-based content would need high speed. This would result in increased adoption of 3G services.

Security Concerns:

The GOI has always raised a concern on the telecom handsets that is being imported in India. This has largely affected the TSPs’ network expansion and 3G rollout plans. However, the recent lift of the ban on importing equipment from Chinese vendors is likely to improve this situation.

On the whole, the future of 3G looks bright in India but again it clearly depends on factors such as availability of 3G handsets at affordable prices, attractive pricing schemes to suit the needs of Indian consumers and innovation & localization of mobile content. The telecom service providers will always need to deploy innovation and build a comprehensive value proposition to target consumers in India.source

A Full Web Experience Of Mobile Internet

The mobile environment has always been dynamic. And as market forces change, it is becoming too complex. As consumers turn increasingly to the mobile web, there is a corresponding growth in the expectations for accelerated access, intuitive navigation and enhanced personalization and interactivity. Media is also becoming richer and more content is being evolved. The recent increase in bandwidth capacity connecting India is enabling the deployment of high-speed networks. This is supporting the growth of mobile internet services by alleviating bandwidth limitations. Globally spurred by the proliferation of web enabled mobile handsets, the demand for collaborative 'Web 2.0' applications, as well as greater 3G penetration and mobile broadband convergence means that the mobile web is increasingly becoming an integral part of the consumer's overall media experience and daily lives.

According to recent industry figures, mobile content and services revenues in India will increase from $4 bn in 2010 to $10 bn in 2015 (Juniper Research). A study by IMRB and IAMAI suggests that about 2 mn users are accessing internet through their mobile phones and other mobile devices actively. Whilst data services such as mobile e-mail and mobile internet provide a basic means of communication and a source of information for individuals across the world, many people in the market have never experienced these services. Cellular internet usage will be important in those countries where the affordability and ubiquity of the mobile phone has made it a popular alternative to expensive PC access. Relatively low bandwidth, limited coverage, and the constraints imposed by the handsets have held back the development of data applications and slowed the consumer adoption in India and other growth markets. Now that mobile communications are extending to all sectors of the society, previously under served segments will have their first experience of the internet via a mobile phone. The transition from limited WAP browsing that once defined the mobile web experience to delivering a full web experience on the mobile will change the dynamics of the internet usage across India-changing the way people communicate and share information.

To be able to meet the demand for extensive use of mobile internet, operators would normally need to invest in upgrading bandwidth. Yet the cost of bandwidth across India is high compared to other growth and mature markets. The economics of investing in the necessary bandwidth to deliver a high speed internet experience compared with the mobile data revenue projections do not currently stack up. Operators in mature and growth markets across the world are wrestling with the data conundrum-how to meet the user expectations of high speed access to rich content and a 'real' web experience, when revenues are not increasing in proportion to growth in data volumes. This is where the technology must play a role.

Technology Prerequisites

Technologies will enable operators to solve the data conundrum and deliver an enhanced user experience while ensuring that the revenues grow in sync with an increased data usage.

As per our experience deploying platforms that exploit such technologies, operators are able to reduce bandwidth and capex investment by over 40%. At the same time, the increased ease of user experience has driven data usage by more than 30%. Importantly, this translates into an increase in the data ARPU, an essential area to grow, given the constant pressure on voice revenues. Implementing a data solution that incorporates key technologies enables the cost-efficient delivery of internet and data traffic, whilst enhancing the end user's service experience. As data usage will continue to grow, operators need to ensure that their data solution is future proof and can scale cost-effectively to handle increased traffic volumes.

Content Presentation

Content presentation is an integral part of delivering an enhanced service experience. To ensure an engaging experience, operators must deliver tailored content and subscriptions, enable personalized workflows, and provide essential functionality-without requiring an upgrade in the handset device. Whilst caching, compression and acceleration techniques also help enhance the user experience in terms of response times. Operators also need to consider how to further improve the service experience

Personalization

A key issue with the current set of browsers despite significant advances in making the 'mobile web' possible, is that they fall short of what 'users' really want to do. Personalization addresses this issue by taking into account a digital consumer's context, behaviour, and content interests and is essential to enhance usability and uptake of mobile internet services.

Handset Requirements

A significant number of component-specific factors is the user's handset device, which influences the quality of service experience and are outside the purview of the operator's immediate control. These factors include characteristics of the connecting device such as the form factor, screen display, the user interface, browser functionality, as well as the web content visualization and layout. In this environment, it is a challenge to pinpoint any single technique, protocol or device to improve the performance characteristics of the mobile internet. Nevertheless the operator can optimize the user experience by deploying widgets that enable the optimal content delivery. Concerted efforts are required by all the players in the value chain to provide a seamless user experience.

Keeping an Eye on the Bottom Line

Operators can exploit technological advancements in terms of data solutions as well as innovations in the type of retail pricing models they offer to exploit the mobile web opportunity. Efforts are being made by service providers to attract the users by migrating from 'legacy per minute' pricing models to flat 'all you can eat' data tariffs to stimulate data services uptake. In many growth markets including India, operators are offering time-bound internet access for a flat fee, enabling users to control browsing costs in line with their budgetary outlay.

While this approach will help drive usage of mobile data, operators also need to keep an eye on the bottom line. The feasibility of offering 'all you can eat' model may not hold up in the medium to long term. Operators will need to charge differentially for premium services and ensure quality of service for such offerings, which is where deep packet inspection technology comes in.

It is clear that mobile data is here to stay and represents a major opportunity for operators to grow revenues, and improve data profitability by cost-effectively managing traffic volumes and deploying differential pricing strategies.

Manoranjan Mohapatra
The author is CEO, Comviva
vadmail@cybermedia.co.in

Constraint In Video Telephony and High Usage of Data and Mobile Internet

A limitation in the number of 3G-enabled handsets with forward facing cameras, privacy issues and a limited bandwidth that might hinder user experience may limit the usage of video telephony as telecom companies in India progressively roll out their 3G networks and services.

Globally, the introduction of 3G services in a country has seen subscriber usage patterns tilt towards accessing the internet, either for downloads or browsing and telecom industry officials as well as analysts say the pattern is likely to be repeated in India as 3G services cover more geographies in the country. Tata Teleservices (TTSL), Reliance Communications (RCom), Bharti Airtel and Aircel have already launched their 3G services while Vodafone Essar is currently conducting subscriber trials in Delhi and Chennai and Idea Cellular is expected to announce its 3G launch later this month.

“Initial indications are that data usage will shoot up. Besides, video telephony is very device dependent,” said chief corporate affairs officer for Idea Cellular, Rajat Mukarji. While agreeing that some voice traffic from existing 2G networks will be offloaded by telcos on their 3G bandwidth, he added that may not be a hindrance in user experience for video telephony despite the 5 MHz bandwidth of 3G spectrum. “The offloading will primarily be for customers who opt for 3G networks,” he said.

Data from Indian Cellular Association (ICA) reveals that smart phone sales in the present financial year will number 10-11 million units and for 2011-12, the figure could touch 40 million. “In three to four years, there is going to be a huge acceleration in smart phone sales in India, with annual sales in excess of 50 million handsets,” said ICA’s president, Pankaj Mohindroo.

According to him, internet will be the ‘killer’ application and not video telephony, and there might not be much impact on sales of handset manufacturers that do not offer video calling feature on their devices.

That, in effect, could be a saving grace for Research In Motion (RIM) that manufactures and sells its handsets under the BlackBerry range, which enable other 3G services such as data downloads and mobile internet access but are bereft of the crucial forward facing camera feature that is necessary for enabling video calls.

“As of now, BlackBerry handsets do not come with forward facing camera. I don’t think there is an application that can build on that feature in to BlackBerry smartphone,” said a spokesperson for RIM India, who declined to divulge if the company was planning to incorporate the feature in any future models.

Moreover, as Director of Com First, Mahesh Uppal, points out, usage of video telephony might be restricted among family and close friends due to privacy issues.

“A subscriber on a call with a professional or social acquaintance may not want to share the details of his location, through a video call. That can limit its appeal,” he said.

Low broadband penetration in India is also cited as a reason why mobile internet may pick up faster than mobile video telephony.source