Should We Leapfrog to 4G?

The endless wait for 3G has got
operators looking at alternative means of improving the falling ARPUs and
satisfying customers better. While WiMax was the rage when talks about it first
started in India, the telecom industry is now turning its eyes towards 4G,
pondering whether India should leapfrog to 4G before 3G, and weighing the pros
and cons of each.

According to an ABI Research study, 4G is expected to exceed
$70 bn worldwide in 2014, and a major 22% of device subscription will come from
suites of operator branded premium services.

Not wanting to see another nine-year delay in 4G
implementation, as in the case of 3G, Trai has floated a pre-consultation paper
seeking views of the industry, simultaneously while it prepares to roll out 3G
networks in India.

For new players, 4G presents a better opportunity as only a handful of
operators will get 3G. So new players can instead move directly to 4G, as that
is where the industry will be headed ultimately. Meanwhile, existing operators
like TTSL, which has tied up with Japan's
NTT DOCOMO-the first country to launch
LTE trials on 4G-has an advantage to switch more easily by simply borrowing
existing methodology.

Says Ranjan Banerjee, head, strategy and corporate business development, TTSL,
"We are very keen that 4G comes to the country. Around the same time that 3G
auctions are to be held here, there will be 4G auctions in Germany-which just
goes to prove that we are not keeping in pace with the rest of the world. So
this will impact us in terms of providing broadband and other data services,
especially with respect to pricing and availability."

3G vs 4G

So let's look at the benefits of 3G vis-à-vis 4G. According to Srinivas
Gopal, GM, marketing VAS, Idea Cellular, "3G will bring in innovations in video
calling; and video PCO might be in the offing."

3G is also expected to bring about innovations in motion-sensor and real-time
simulation technology,
VAS applications, M2M applications, free voice calls,
home view network, video kiosks, and help in weather and natural disaster
management, tele medicine, tele education, m-banking, GPS, home automation-smart
grid, mobile Internet broadband, high storage capacities and FMC.

"Relevance of 3G networks in managed services is that it optimizes network
operating costs, and balances risks of business. Also, overlay of 3G network on
2G offers huge opportunities for infrastructure re-use and sharing," says Sharat
Chandra, COO,
GTL. It will provide convergence of mobile, tv and Internet;
provide localized content in regional languages; and make way for concepts like
m-wallets and mobile credit cards. Network growth is also estimated to increase
by 30% due to 3G. On the other hand,
LTE optimization on 4G network can reduce
costs and provide more applications and customized, personalized services, as
well as infrastructure sharing. It will also enable a proliferation of mobile
devices such as smartphones, netbooks, PNDs; and more internet enabled
multimedia services-such as VoD and P2P video sharing, simulation gaming,
real-time movie streaming, high-definition video-on-demand-and ultra-broadband
on very high speeds of up to 100 Mbps, pay-per-view TV and digital radio.

Remarks RN Prabhakar, member, Trai, "With NGN, a content developer can
develop content for all providers and take responsibility, while payment by
customers can be deployed through various means. Besides, this provides security
of network and critical data is not lost, as there is no malicious software."

According to an Amdocs study, as the telecom landscape gradually moves from
the network of billions of callers to a network of trillions of devices, it is
predicted that voice services that account for 65% of revenues will take a
backseat with data services becoming the primary demand of consumers. However,
such transitions are not facilitated by demand alone. It is very evidently
advancing technology that has and can lead to better efficiency, thereby making
most affordability in the 3G/4G era a possibility. This is further backed by the
scope of innovation on aspects like customer sales, customer care, network
management, and billing.

So, how would the customer experience be different in a 3G/4G era, as
compared to 2G? According to Anshoo Gaur, GM & head, Amdocs India, "On the
purchase front, with the introduction of new technology, a huge variety of new
products and services would crop up that may tend to confound the consumer who
really may not be aware of their presence or need. The next generation of
communication services, therefore, requires the consumer to be equipped with
better comparison tools along with a variety of flexible schemes that allow
choice of the right service and payment options with discounts that suit user
patterns."

He continues, "With newer technology, quicker addressal of connectivity and
compatibility concerns imply better customer care and consequently more brand
loyalty. It is thus important to computerize the entire process as much as
possible to ensure quicker addressal of concerns, and accurate identification of
the problem. These, in turn, ensure better customer satisfaction while
computerization implies lesser involvement of customer care executives, hence,
resulting in far lower expenditure for the service provider. As far as customer
interaction goes, newer and more services imply far many more interaction
between consumers and service providers."

Should We Skip 3G?

In the mid 90s, when mobile services were launched in India-more than ten
years after the 1G cellular network was rolled out by NTT in Japan-Indian
operators had leapfrogged to a network that was based on second generation (2G)
technology, ie
GSM standard.They completely skipped adoption of first generation
(1G) technologies such as total access communication systems, advanced mobile
phone systems, and C-Nets deployed then by various operators in Japan, the US,
and Europe.

Given this history, would it be a better idea for India to leapfrog from 2G
straight to
4G, overlooking 3G?

According to Gaur, "It is extremely important for the Indian telecom sector
to avail itself of the huge opportunity available on account of 4G. It not only
provides the consumer with a huge range of revolutionary services, but also has
the scope to enrich the services of many other sectors, thus providing a huge
boost for the overall economy to grow."

Moreover, if need be, 3G and 4G can be used simultaneously by an operator, in
the sense that a service provider can use a particular proportion of 4G spectrum
to provide 3G services. This makes perfect business sense for the service
provider and is beneficial to the consumer, who may take a while to move on to
demanding 4G services.

According to Satyen Gupta, president, Association of Competitive Telecom
Operators, "As the spectrum required for 3G and 4G is the same, an operator
should be free to use 4G as long as the government doesn't allocate separate
licenses or regulations for each. Operators, instead, should be free to take a
call on the network employed, so as to provide for technology neutrality."

So what does the government have to say about this? According to A Raja,
Union Minister for Communications and Information Technology, 4G prospects won't
keep telecom companies from bidding for 3G, and he too agreed that both
technologies could co-exist. In an earlier report, when asked about market
speculation that some prospective bidders may stay away from 3G because of the
belief that the launch of next generation technology 4G spectrum is not too far
away, Raja had said, "We are foreseeing a technical revolution in 4G and it
might take another year for 4G to be introduced."

According to leading operators, in the current scenario wherein only 5 Mhz
has been allotted for 3G, which has to be shared with 2G operators for voice, it
will lead to choking and ability to provide data will drop disproportionately.
Therefore, a higher spectral efficient technology like 4G-where data throughput
speed is also better-is being saluted by one and all.

However, at this point in time, there are also several challenges which 4G
presents, which will not allow India to adopt it, as of now. For one, there is
still no clarity on the spectrum band that is best suited for 4G, as the US and
Europe are using different frequency bands. Synergy in frequency bands is
important, as it helps keep the cost of the devices and the network low.

Moreover, if 4G services are offered in different bands across the globe,
then multiple-band handsets will come at a premium. In comparison, 3G airwaves
have been synergized globally in the 2.1 Ghz band which enables vendors to
supply handsets at less than $100.

Hence Gupta concludes, "LTE requires a continuous 10 Mhz spectrum, which is
not currently available. Thus, once 4G is commercially viable and an advanced
version of LTE is available abroad, like version 802.16, we may be able to
deploy it in India, as it will then be cheaper and available on 5 Mhz as well."

Beryl M

berylm@cybermedia.co.in