3G, Boon or Bane?

The government is all set to roll out 3G services in mobile telephony. 3G is the precursor to the 4G technology which will provide support to multimedia services. The telecom ministry also announced the start of mobile number portability (MNP) allowing mobile subscribers to switch from one operator to another without changing their mobile numbers. Though MNP is a good move but I am skeptical about how successful 3G will be in India. India is predominantly voice based market. 3G has only been successful in tech savvy populations of Japan and Korea. The scope of 3G is limited to metros and tier 1 cities. There are a few positives out of this move in the telecom industry. Companies involved in VAS and the Indian gaming industry might get a boost. New models of handsets will be launched supporting 3G services. Another interesting thing to note would be how the bidding process takes places and how much of the cost will be transferred to the customers availing these services?

MISSION INDIA: VIRGIN GROUP

Today when we (Indian economy) are rocking we can dream of anything, same feeling is there with FDI’s also. Our policy makers opened our economy in early 90’s but partially that very well but now when all FDIs (business giants) are eagerly wish to join mission India but our government keeps tight restrictions on foreign direct investment in areas like retail, insurance and banking, and caps foreign participation in telecommunications at 74 per cent, which are really booming and have highly potential sector of country.

A well known, most respected and highly creative U.K group is going to join mission India that’s “VIRGIN GROUP”..

This time when jolly business leader Mr. Branson came to India he was in unbelievable style he used horse and wore bridegroom dress and joined the wedding (anniversary of FM 104) in imperial hotel.

According to chairman of virgin group Mr. Richard Branson, Virgin group is planning to enter into aviation, telecom, infrastructure, fm radio, BPO & IT industry but in one of his interview he said that: "You feel as a business person quite unwelcome in trying to bring your money to India and trying to make a difference in India,".

With the success of FM 104 across India, group entered into the most vibrant telecom sector of the country and tied-up with TATA teleservices for its mobiles. Group is expected to bring in its wealth of experience in telecom marketing and technology through its branded handsets because this sector is fastest growing sector across the world but customers are frustrating from poor service and facilities, while virgin group believe in philosophy of head on competition and customer’s wellbeing.

Group tried to obtain permission for a Mobile Virtual Network Operator (MVNO) license here (india) to buy mobile telecom capacity in bulk and retail it with attractive branding. However, Indian authorities have not allowed MVNO system till now.

Domestic Airlines Plans:

In India domestic airline passenger traffic grew 36.7 per cent in the first nine months of 2007 from a year earlier. Mainly domestic airlines have posted losses due to heavy initial investments and competition on fares, but according to one report on domestic aviation industry, the trend to reverse in 2008 helped by consolidation and better capacity utilization.

"With a middle class population of 300 million, India offers a huge potential for domestic airlines. Many foreign players are willing to enter into this sector and VIRGIN group is main contender in this line and company officials said that: "We'd love the right to fly domestic in India, but the market is currently protected. If the market opened up, you will find Virgin competing alongside local carriers,".

Airport development Plan:

Company also wishes to invest in airport infrastructure development of country mainly in metros like Mumbai, Delhi etc.

If we look at the eagerness of corporate giants of world to join mission India, there is huge opportunity for employment, infrastructure development and economic development of country. So I think if the governments can be brave and get rid of these laws, the Indian economy will grow even quicker and the Indian consumer will benefit enormously.

SPECTRUM Vs GOVERNMENT IGNORANCE

Today, in most of the countries telecom companies are working on 3G technology, which requires huge spectrum.

3-G technology have various advantages, have a look at these:

• It support great number of voice and data customers than 2G tech.

• Low incremental cost in implementation

• Reduces the high congestion in metros i.e. Mumbai, delhi where subscriber base is increasing leap and bound way.

• Increase in Transmission rate to 384kb/sec for mobile systems and 2 Mb/s for stationary systems.

In our country we are using two different wireless technologies, GSM (Global system for mobile) & CDMA (code division multiple access). There is big internal fight of spectrum demand among GSM as well as CDMA technology telecom service providers.

According to Indian current telecom policy:

GSM operators have been allocated spectrum in the ranges of 890-902.5 MHz paired with 935-947.5 MHz and 902.5-915 MHz paired with 947.5-960 MHz. This gives the GSM operators total of 25+25MHz. CDMA operators have been allocated 824-844 MHz/869-889 MHz 20MHz+20MHz. DOT reasoning was that CDMA operators were more efficient in using the same and hence slightly lesser. Operator who adds more number of subscribers can get more spectrum.

Recently in spectrum war time Indian government provided state-owned Bharat Sanchar Nigam Limited additional spectrum of up to 10 MHz for GSM technology services in over 16 circles even as private competitors have been waiting to be allotted spectrum by the Department of Telecommunications since December 2006. This government move really made private players impatient. Till today, 30 new companies had applied for licenses. God knows when these companies will get license and will join the telecom industry.

Then government's stand and biasness with private telecom operators is like step son.

As per Indian defense sources, they want some time to release the spectrum for DoT due some security reason while here in telecom industry, new subscribers are increasing with 20% which affects the services of these operators..

DoT, TRAI, Operators, Indian government & defense all are disguise and dont know the day when we will be able to 3G technology, no call muffling, no call drops, smooth voice etc.

I have a doubt in this deal too like our well documented and highly ambitious NUKE deal....

Lets see how Telecom companies will handle such situation?????