Aircel: Inching Closer to 3G

With 3G services in the mobile space on the threshold of
reality, many in the industry look at it as the natural evolution from 2G.
Moreover, with 2G spectrum already getting choked, the launch of 3G is seen as a
significant step in improving overall service levels. To this end, the operators
received a major fillip when, in November, the Department of Telecommunications
(DoT) had allowed mobile phone companies to conduct 3G trials in select cities
within the stipulated timeframe of March 31, 2007. To that end, Aircel, now part
of Malaysia's Maxis Communications, has successfully tested 3G in Chennai in
association with ZTE Corporation. Aircel was given permission to conduct 3G
readiness tests in Chennai, Coimbatore, Bhubaneshwar, Shillong and Guwahati. The
company will be soon doing 3G trials in Coimbatore.

As part of its 3G readiness tests, Aircel has tested a complete
array of 3G services including voice and video calls at 64 kbps. Meanwhile,
applications like rich data services like downloading music, movies and pictures
are tested between 384 to 1024 kbps. On the high speed downlink packet access (HSDPA)
front, Aircel has achieved speeds of up to 3.3 mbps. According to company
sources, this is adequate for HSDPA applications like downloading large volumes
of business data and consumer applications like streaming movies online.

According to Kini, there is a lot of ambiguity in terms of 3G as
a technology, given that the company dirtied its hands in understanding the
technology to the core so that it will be able to offer state-of-the-art
services. In terms of infrastructure for the 3G testing, Aircel, in
collaboration with ZTE, has put in place a slew of 3G equipments like mobile
switching center (MSC) servers, media gateways, radio network controllers (RNC)
node B, which is known as 3G BTS with HSDPA, and VoIP nodes.

Still Ambiguous

While the government's move in facilitating 3G trials is a positive
indication about the subsequent roll out of the technology, one of the larger
impacts of 3G lies in the overall improvement of quality of services. In order
to provide 3G services, operators need to significantly ramp up their
infrastructure. For instance, high speed streaming video can be offered only
when the networks are state-of-the-art. Even if a subscriber is using typical 2G
services on 3G-enabled network, the quality would be much better. The second
major area where 3G is expected to have an impact is on the spectrum crunch on
the 2G-based networks. Some of the observers feel that commercial launch of 3G
will help ease this issue as there is paucity of spectrum in 2G, mainly in
metros. For instance, the 3G spectrum is said to be multiple times higher than
the 2G spectrum in terms of voice.

According to industry sources, commercial availability of 3G
services is expected to by mid of this year and companies like Aircel has the
early mover advantage in capitalizing on the value 3G services offer. But there
are inherent issues that need to be tackled; for instance the government is yet
to clearly spell out aspects like slashing the entry fee for 3G, and aspects
like whether to restrict bidding to existing players or allow new players and
spectrum allocation to GSM and CDMA operators. Aircel considers the successful
3G trials as significant milestone for the company as it gives an advantage to
be market ready before a technology becomes commercially available in the
country.

Several Indian cellular players such as Bharti, Tata
Teleservices etc. are in the process of conducting trials to make sure that 3G
backbone is in place before the goverment comes out with its 3G spectrum policy.
The success of 3G in India will depend on the pricing of spectrum, launch of
cost effective services and availability of 3G handsets.

Contrary to WiMAX, a competing technology, the focus of 3G will
be in metros in the initial phase. Indian players are cagey about spending extra
funds for 3G spectrum as many international players had burnt their fingers
bidding at exhorbitant prices.

Shrikanth G

shrikanthg@cybermedia.co.in