Bharti Airtel gears up for 3G shift

It's execution time at the New Delhi-headquartered BhartiAirtel. The execution is not related to Bharti's African acquisition of Zain,but the launch of the company's 3G (third generation) services in India.

Having commenced the rollout a little over a month ago, Bharti Airtel launchedhas launched 3G services across 10 cities, including Bengaluru, Chennai,Coimbatore, Mysore, Manipal, Udipi, Jaipur and Delhi NCR. Mumbai was theeleventh city to witness a rollout. By the end of March 2011, the company plansto launch its 3G services in thirteen 3G-license circles.

Having invested Rs 13,000 crore in acquiring the 3G spectrum, Atul Bindal,president of mobile services at Bharti Airtel, calls it time to hit the road."It is gratifying to have achieved the milestone figure of half a million3G customers across India,"says Bindal.

One question remained: why was Mumbai the eleventh city to receive 3G whenBindal himself said of Mumbai: "With the highest data penetration in Indiaof over 20 per cent, the city of Mumbai truly represents the data revolutionstory that our country is currently witnessing."

"It was about scaling up the infrastructure capabilities," saysDeepak Mehrotra, executive director of mobile services (North & West) atBharti Airtel. To be 3G- ready, Bharti Airtel has commissioned 1,300 additionalcell-sites across Mumbai, taking the total cell-sites in the island city to4,300. Since Bharti Airtel is Mumbai's third largest service provider, industryveterans believe that it would not have been a good strategy for Airtel to hitMumbai too early.

Beyond the cost which telecom players have incurred in buying 3G spectrum, theservices have much more at stake. For Bharti Airtel's mobile services, 13.5 percent of revenue comes from non-voice services. And if short messaging services,or SMSes, are excluded then the revenue contribution is 9 per cent. "Weare sitting on a tip of a volcano," says a visibly excited Bindal. 

Like any other industry, telecom service providers are also dependent on oldand sticky customers. Recent analysis projects that at the industry level, 9per cent of subscribers account for 36 and 55 per cent of revenue and operationprofit respectively. Will 3G be a game changer here? Mehrotra affirms:"Data consumption is on the increase and many users would have their firstinternet experience over their hand phones." Also, service providers wouldhave to invest heavily in providing seamless network to this new generation ofmobile service subscribers.

Of late, the industry has undergone a wave of reform with the implementation ofmobile number portability, or MNP. "At the industry level the churn is amarginal 0.2 per cent," says Mehrotra. "On the contrary, MNP couldgravitate more users toward better quality service providers," he adds.Irrespective of that, increasing number of mobile phone users acrossgenerations will have power to do much more on the smaller screen right intheir hands.