What next?

You have heard the promises. With third generation, or 3G, mobile phone services, which could start in India before the year-end, you will get blazingly fast Internet downloads, video downloads and live TV at crisp resolutions, and maybe even video calls.

But after Business Today spoke with several stakeholders in the 3G world — phone service operators, equipment vendors, handset manufacturers and value-added services companies — it seems that the first and most vital role that 3G will play will be: better quality voice calls.

It is not as if 3G applications or technologies such as video services or faster Internet access are not available, it is just India has not auctioned adequate amount of spectrum or the radio waves on which phone signals ride upon. "In many other countries, operators have been given 20 MHz of radio spectrum each. In India, operators have been given a quarter of that, despite having several times the user base," points out Sudhakar Ramakrishna, Vice President, Wireless Broadband Access Solutions, Motorola.

Still, when the initial phase of deployments is over, phone operators are likely to look at 3G technologies for what they are designed for: faster data access. "The biggest thing about 3G is data and that will be the biggest change that customers will see," says Shireesh Joshi, Chief Marketing Officer for Mobility Services at Bharti Airtel, India's No. 1 phone company by revenues. He does not give more details.

Soaps and Games
Internet access on 3G potentially offers 50 mbps speeds using High-Speed Packet Access 'Plus' technology (HSPA+), which is at least 10 times faster that what today's 2G or even data-rich offerings such as CDMA EV-DO Rev.B technologies offer. CDMA is short for code division multiple access, a standard that rivals the more popular GSM (short for global system for mobile systems) protocol.

Customers in New Delhi, where state-run Mahanagar Telephone Nigam Ltd is offering 3G phone services, already rave about the potential of such an offering — they can watch YouTube videos sans buffering on their smartphones.

Entertainment and content companies, then, see a massive opportunity in 3G, but are holding their cards close to their chest. "(It) definitely will open new opportunities, however, what remains to be seen is how the operators are deploying 3G," says Anupam Vasudev, Executive Vice President, STAR India, on the new avenues that 3G will open up. "From our point of view, we are already building new products which should be out in the market together with the 3G deployment, but real big innovations will come over time."

Vasudev will not elaborate, but given the way STAR's parent News Corp. has deployed mobile applications in more mature 3G markets such as the United States and Europe, the network in India could offer episodes of its popular soaps on mobile phones and other 3G-enabled devices, as well as give news channels new revenuegenerating avenues by delivering news straight to hand-helds.

Vishal Gondal, Chief Executive Officer, UTV Indiagames, India's largest developer of games, believes additional data bandwidth could open up the mobile market for developers such as his company. "A lot of the games we develop, we do not sell in India. Not because of a lack of a market, but because users just cannot download those games," he says. "It is as if we have the Ferraris but not the highways to drive them on."

With 3G networks, that could change and as devices become smarter and more capable, customers will want applications and games that can take advantage of the increased processing power on devices, Gondal predicts. A recent game UTV Indiagames developed for the Apple iPad, for instance, is more than 100 megabytes in size — something that would take hours to download in India today.

The sprawling number of mobile phone customers in India make for the world's second-largest market by volumes (and is the fastestgrowing), but that, ironically, will be the reason that 3G offerings are either limited or expensive, say industry insiders and experts. As Motorola's Ramakrishna argues, India has not "millions of customers, but hundreds of millions of customers, which will make managing 3G networks a challenge for operators and equipment vendors".

Price to Demand
Others like V. Ramnath, Director, Operator Channels, Nokia India, predict 3G-based data access will be priced high initially — until such time as more spectrum is released for phone operators — to prevent a swamping of the network as happened with AT&T in the US last year when all-you-usedata customers of the popular iPhone choked that company's 3G network.

India's ultra-competitive phone services market — the government has auctioned three 3G licences in each licensed area or circles — will probably drive prices lower. Nationwide, government-owned Bharat Sanchar Nigam Ltd already offers video-calling on its 3G network at 35 paise a minute, but rival firms argue such prices are unsustainable.

The answer for a data-hungry country may then be met by a crop of new broadband wireless access, or BWA, companies led by the likes of Reliance Industries. The largest Indian private enterprise has already indicated it may plump for so-called Long Term Evolution, or LTE, technology, which, many argue, is faster than rival WiMax standards. Already operators such as Verizon in the US and Scandinavia's Teliasonera are running LTE networks.

BWA could take some of the load off 3G networks, says Ramakrishna. "3G might offer rich services to the phone but 'dongles' that offer datacapabilities to laptops and computers might come over LTE or WiMax," he says. In fact, it is quite possible that operators and phone vendors could come up with devices that both enable voice and limited data access on 3G networks as also latch on to BWA networks for full-blown data usage. That would be the best of both worlds.