3G Asks for Patience!

Despite being a couple of years old in India, the 3G services have not picked up as expected and the gradual growth of the third-generation services would take place if the issues surrounding the technology are addressed. Though the service promises to offer consumers plethora of services that can have an impact on their lifestyles, customers are struggling to avail it to the fullest as problems like roaming, compatibility issues, etc, still persist.

The 10th VOICE&DATA CEO Conclave saw many of the big names in the telecom industry under one platform, gathered to discuss and debate about the challenges and opportunities within the sector. CyberMedia cordially welcomed everybody to mark the beginning of its much-awaited flagship event.

Setting the stage for a fierce intellectual battle among the eminent panelists, Ibrahim Ahmad, group editor, VOICE&DATA commented that 3G has not been able to keep up with the consumers' expectation. According to him, "Interoperability remains the major issue with the cost of handset and adequate infrastructure being the two challenges for the industry."

"It is a perception that 3G has gone wrong. The data will grow and we need to patiently wait for things to happen as the answer lies in the future not in the present," said AK Bhargava, executive director, MTNL.

He further backed his statement by adding that the operators need to provide a world-class and reliable infrastructure, while the handset players need to manufacture cheap 3G devices.

Agreeing to it, Jagbir Singh, director, network services, Bharti airtel added, "Vendors and suppliers should support the entire ecosystem. Seventy percent of the handsets in India are not compatible with 3G services and when the handsets will be cheap the 3G services will grow." He also commented on the unwanted usage of 3G bandwidth and said that the consumers need to be educated on closing unnecessary applications.

Everyone involved in the discussion also agreed on the point that the price of the 3G services are quite high, and the government and the regulator should support the industry to help the services grow.

"Most of the mobile applications today run on 2G so the end-user doesn't feel like switching to 3G with its exorbitant prices," said Ambrish Jain, deputy MD, Idea Cellular. He specifically focused on the reduction of 3G data rates and compatible handset prices for the arrival of 3G revolution.

Chandan Ghosh, head of operations, Aircel agreed with Jain, and added that the users need to be educated about the usage of services efficiently, as 80% features of a phone are not known by its user.

On the other hand, Satyen Gupta, chief regulatory adviser and director government affairs, BT India suggested that the operators need to follow the policy of Steve Jobs, which focuses on 'what the customer wants and how much he can pay'. He put forth an interesting point that the quality of 3G voice be in high definition then only the customer will opt for 3G services.

On further suggesting ways to uplift the present condition of 3G services, Rajan Mathews, director, COAI said that the government should invest in the infrastructure in order to provide support to the crippled telecom industry.

He also added that the government should reduce the taxes as it takes away all the money of the operators which they seek. The gap between the booming data demands and the falling revenue streams of operators should be filled.

The panel discussing on the issue 'How to fetch money from 3G?' comprised of eminent members of the telecom industry including: Chandan Ghosh, head of operations, carrier and enterprise business, Aircel; AK Bhargava, executive director, MTNL; Ambrish Jain, deputy MD, Idea Cellular; Jagbir Singh, director, network services, Bharti airtel; Ibrahim Ahmad, group editor, VOICE&DATA Rajan Mathews, director general, COAI; and Satyen Gupta, chief regulatory adviser and director government affairs, BT India.

Experts Show the Way

While the industry is grappling with myriad issues and the operators are in a dilemma on how to justify the RoI, telecom analysts from various research agencies like Ernst & Young, Frost & Sullivan, CyberMedia Research, and Monk consulting came together to share their views and devise some possible way out for a better result. They are of the opinion that the adoption of 3G has been picking up gradually, especially as consumers get to experience it and understand the impact it can have on their lifestyles, even lives, but a big question still persists that how will money be made out of delivering the 3G service? And how revenue sharing propositions might work to benefit content providers and network operators? The conclave included an extensive discussion on how to make money from 3G services?

Ashish Basil, partner, telecom practice, Earnst & Young said, "The consumers rely on 2G for better coverage and to make them switch to 3G the network problem needs to be addressed and pricing needs to be right for the demand to be created." He commented that the 3G is an additional service to the consumer with which they want to access high-speed internet and for that they don't want to pay a very high price. Therefore affordability cannot be termed as the major issue.

Jagannadham Thunuguntla, head of research, SMC Global Securities came up with his point of view, "We cannot be optimist about the use of 3G due to lack of education among the consumer and chunk of people coming from rural areas." He further suggested that the job opportunities are going down in the country and hence the youngsters too can't be seen as the leaders of the growth of this technology.

Naveen Mishra, lead telecom analyst, CMR said, "We are seeing limited innovation from the data services as we need more innovative applications and services coming from various parts of the country as a lot more depends on how easy is the accessibility of these services."

Abhishek Chauhan, senior consultant, ICT practice, Frost & Sullivan South Asia and Middle East agreed to what Naveen said and further added, "Quality of services is very important as majority of the consumers who are subscribing to 3G, particularly post-paid subscribers, are experiencing bill shock."

Although he was confident about the future of 3G market as he mentioned that the emerging economies are going to generate 80% of the demand and came up with the example of how 3G became success in Kenya within a span of one year of its launch.

Girish Trivedi, co-founder and director, Monk Consulting said, "Areas of education and healthcare are the main focus of the government in the near future and hence the role of 3G technology at a lower rate will be useful." He added that the shift in the ability to pay and willingness to pay will remain a major concern for the success of the 3G technology.

Deepak Maheshwari, director, corporate affairs, Microsoft came up with a crucial point, "We need to localize for getting connected". He commented that it is the time to create more content and the users should be allowed to simplify the product so that they can easily test the product before using it.

Partners Need to Work Together

The 3G ecosystem partners play an important role in enhancing the customer experience and the data usage habits in India, by meeting the growing demand for high-speed surfing and wireless entertainment services in the country, but still the third-generation network is experiencing problems with the service, due to a lack of bandwidth.

The conclave scrutinized the industry players for the answers. The second panel discussion had CS Rao, president, RCom; Rajat Mukarji, chief corporate affairs, Idea; Rajesh Charria, president, Internet Service Provider Association of India (ISPAI); Manoranjan Mohapatra, CEO, Comviva; Vijay Sharma, managing director, One97; Rajiv Kumar, CEO, RockeTalk; Sandeep Girotra, head, NSN India; Prashant Chaudhary, head, brand sales, InMobi India; Parag Kar, VP, government affairs, Qualcomm India and South Asia along with Praveen Prashant, editor, VOICE&DATA as the moderator.

Praveen Prashant, Editor, VOICE&DATA raised a crucial question, "How cheap are these bandwidths from India's prospective?"

To which Charria asserted that he didn't think that the international bandwidth price is a problem and in fact international bandwidth is cheaper than the domestic one. Sharing of infrastructure through Indian service providers is important and suggested that the industry needs to come out with the application, which best suites the consumers.

Mukarji added that the overall penetration and monetization of 3G is not satisfactory and he further added that if the handset price will come down to around '5,000-6,000 then things will start shaping up, as a chunk of 3G users are people below 25 years of age.

Parag Kar answered to that by saying, "Qualcomm has service-side constrain and if the demand do not pick up then the prices cannot be lowered."

Girotra stated, "The network needs to be built up to move 3G and backhaul sharing will remain a must for the industry." He commented that the enterprise requirements are misunderstood and the industry needs to understand the business. The government will play an important role along with the operators, which will bring new business avenues to the technology.

Vijay Sharma said, "Spectrum efficiency needs to be enhanced with coverage of 3G and mobile broadband being the primary focus." He was fairly satisfied how the 3G has picked up and suggested that we all need to keep patience and wait for few more years. The panel was summarized by Rajat Mukarji as he said, "The government should allow to roll out the fiber network at a lower cost on collaborating model and the handset vendors should focus on minimizing the cost." He added that the cost of 3G-enabled handsets should be lowered and the technology should be made available to almost all the leading mobile brands in the country.

Setting an Example-The Enterprise Way

The success of 3G in India largely depends on the kind of innovative business models, which the enterprise will bring in the next few years, as it is expected by various telecom experts that the third-generation technology will very soon shift the internet largely to the mobile space.

The fourth and the last panel of the conclave was summarized as how the enterprise can make the technology a success in the country as a major part of our country's population is still far from the levels of affordability of this technology.

Anil Jain, senior general manager, BSNL came up with the challenges which the technology is facing in India, as he suggested that the 3G applications should be tested in all the leading handsets and there is a need of improving the quality of video, robust MPLS system, and sufficient backhaul. Leading operators and VAS industry should focus on how to make the customer more aware of this technology.

He further said that by seeing the increasing mobile penetration in rural areas and to facilitate faster small-scale transactions in the urban areas, the operators see mobile banking as one of their key value added services offering to cash-in on 3G services.

During the panel discussion, Jain also came up with a term 'Zero Banking' as he suggested that in the future there will be no need of having physical banking branch or insurance companies as most of these corporates will be using 3G to connect customer through HD video and HD conferencing.

Rajeev Seoni, CIO, Ernst & Young commented that the 3G technology will soon increase the number of smartphones on the network and will also upgrade the handsets in use. This would facilitate access to mobile banking services and make them user friendly.

"Security and feasibility assessment will remain a challenge for the industry whereas mobile cloud, vertical applications, M2M in mobile are seen as the opportunity, which will help to boost the growth of 3G technology," said Sanjay Rohatgi, senior vice president, service providers, Cisco India & Saarc. He added that generally 3-4 years is taken for a country to adapt 3G technology.

Nivedan Sahani, VP and business head, Tata Teleservices agreed to what Rajiv said and added, "Most of the non-financial needs should be moved to cloud, so as to increase the 3G adaptability, as most of the applications are consumer enabled and not the enterprise enabled." He commented that the enterprise requirement is misunderstood as the industry needs to understand the business from a new horizon.

Vijay Sethi, CIO, Hero MotoCorp agreed that adaptability remains the need of the hour and suggested that the Android applications should be more pervasive, as we need to wait when the enterprise are ready to pay.

Ankur Gattani, associate vice president, Telecommunication, MapmyIndia suggested that the success of 3G largely depends on demand for super-quality voice services and heavy data, media-rich content. He further added that the improved efficiency, cost reduction, better connectivity with improved top and bottom-line compliance remains the need of the hour for the industry."

The whole day event brought back some optimistic smile on the industry leaders as well as the audience, and it seemed as if the industry subconsciously agreed to give few more patient years to 3G to mature in India. We are also hopeful that we would have some interesting success stories to share when VOICE&DATA CEO Conclave reappears again in the next year.