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4G Spread: Ecosystem development key to service uptake

March 29, 2013
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The absence of a developed ecosystem and innovative 4G applications and the limited availability of affordable 4G-enabled devices are the major reasons behind the slow service uptake in India. At present, Bharti Airtel is the only operator to have launched these services. Industry experts share their views on the delay in the launch of 4G services, issues hindering their uptake and the likely operator strategies for service roll-out...

 

Pankaj-agrawalKunal-bajajHemant-joshiMahesg-uppal


What are the key reasons for the delayed service roll-out by broadband wireless access (BWA) spectrum holders?

  Pankaj Agrawal 

The following are the key reasons for delayed 4G service roll-out:

•   Limited coverage is a major issue in India. The 2300 MHz band, which is currently being used to offer long term evolution (LTE) services in India, is a high frequency band with limited coverage, which makes LTE more of a wireline solution than a mobile solution.

Further, in order to increase LTE coverage, service providers are required to install more towers as compared to those needed in the 900 MHz band, which would lead to additional capex. Some operators may even consider deploying small cells for wider coverage.

•  Currently, a limited number of devices are compatible with the LTE- time division duplex (TDD) platform. Users are, therefore, accessing services through dongles. However, service provision through dongles will result in service providers directly competing with CDMA operators, which are offering services through dongles in the 800 MHz band.

Further, LTE dongles are priced at over Rs 2,000, while Wi-Max-based dongles cost Rs 1,000. While operators can offer LTE through Wi-Fi terminals, these services will face competition from other fixed line broadband offerings.

The lower speed and reliability offered by LTE networks to support offerings like IPTV are major concerns. As of now, voice over LTE is yet to be launched commercially. This is another disadvantage for 4G service providers.

 Kunal Bajaj

4G service roll-out has been impacted by an immature LTE-TDD ecosystem. Also, dual-technology players in the country are currently focusing on getting their 3G strategy right. They are concentrating on strengthening the 3G ecosystem and putting in place a profitable business model. Therefore, from the operations’ perspective, rolling out 4G networks is not a priority for service providers currently.

 Hemant Joshi

The key reasons for the delayed service roll-out by BWA spectrum holders are an underdeveloped ecosystem, limited availability of 4G applications and devices that are compatible with 2300 MHz spectrum.

 Dr Mahesh Uppal

The delay in service roll-out can be attributed to the unpreparedness of operators, given the weak 4G ecosystem. The economics of deploying networks, and the choice and price of 4G devices are not as attractive as those offered for 2G or 3G services.

 What is the potential for 4G in India? What are the key drivers for these services?

 Pankaj Agrawal

Operators are likely to use a mix of technologies – UMTS in the 900 MHz band, LTE-frequency division duplex (FDD) in the 700 MHz band and LTE-TDD in the 2300 MHz band – to provide increased coverage and capacity. Further, there is significant potential for providing LTE-FDD services in the 700 MHz, as the LTE ecosystem for this band has matured worldwide.

 Kunal Bajaj

4G has always been viewed as a technology that promises higher speeds than 3G and 2G. Most 3G customers were previously using 2G to meet their requirements. Therefore, 3G users with high daily data requirements will adopt 4G for higher speeds and an improved service experience.

Further, 4G has significant potential as the country has limited fixed line broadband penetration. The data requirements of broadband users are increasing rapidly. There is a demand for high speed data connectivity, which 3G will not be able to meet. This demand is expected to be met by 4G. Through these services, users are looking for a broadband experience similar to that delivered by DSL.

Moreover, 4G as a wireless technology can be rapidly rolled out across large areas. It may not provide blanket coverage, but is capable of providing decent coverage in areas with limited/no landline availability or in regions where delivering broadband through fibre or DSL may not be viable.

 Hemant Joshi

4G services offer significant potential in India. The key drivers are high speeds and an enhanced user experience, particularly for multimedia applications.

 Dr Mahesh Uppal

The 4G market has enormous potential in India. Segments like entertainment, governance, health and education are likely to require large data capacities; however, none of them is currently in a position to create adequate demand for 4G services in the short term. Operators will need to create the demand for these services in such segments in the future.

 What are the issues in 4G adoption?

 Pankaj Agrawal

Some of the key challenges are:

•  The absence of a clear road map on spectrum allocation in the 700 MHz band

•   Technology constraints for offering services in the 2300 MHz band

•   Limited penetration of smartphones and inadequate user awareness.

 Kunal Bajaj

One of the key factors affecting 4G adoption is the absence of a developed device ecosystem. Currently, the availability of LTE-TDD devices is limited. Moreover, a very small number of such devices available globally are compatible with the 2300 MHz band, which would be used to offer 4G services in India. Also, currently 4G is not empowering mobile users in terms of providing connectivity on the go, as it is being offered as a competitor to DSL. These services are being offered through dongles, Wi-Fi and hotspots, which is meeting the fixed usage needs of the residential and small-office home-office markets.

 Hemant Joshi

The lack of pan-Indian coverage is one of the biggest hindrances to 4G service adoption in the country. High tariffs and cost of devices supporting the technology are other issues affecting service uptake.

 Dr Mahesh Uppal

The biggest challenge in the adoption of 4G services is the underdeveloped service ecosystem. The networks are not ready; devices are bulky and costly; and the available applications and services are not attractive at current prices. Also, the experience gained in the 3G segment highlights the promise and challenges associated with 4G services. While 4G offers a “fatter pipe”, 3G offers mobility, an attractive form factor and cheaper devices. Further, most subscribers use a variety of affordable 3G handsets and may be reluctant to abandon them till 4G offers comparable functionalities.

 What strategies are operators likely to adopt for 4G service roll-out?

 Pankaj Agrawal

Operators are likely to focus on the metro circles, and use a multilayered technology architecture, including Wi-Fi and FTTx, while rolling out 4G networks. They are expected to migrate to a dual-band LTE architecture for offering these services.

 Kunal Bajaj

Operators will target markets that offer high potential for data services. The pricing model adopted by them will play a crucial role in the success of 4G services. Given that 4G delivers higher speeds, operators can charge a premium for the service.

 Hemant Joshi

To attract customers, operators need to strengthen the 4G ecosystem. Also, for mass service uptake, pan-Indian coverage is critical. Operators may not launch unlimited plans and stick to metered tariff plans. However, they may introduce bundled offers to increase service adoption.

 Dr Mahesh Uppal

Service providers in India are not expected to be overly aggressive with 4G services. They would likely adopt a cautious approach, since 4G business models have not matured. There are some inherent risks as well. India has a large mobile user base, which could result in bigger challenges related to traffic management on networks. Currently, no killer application is available to justify a subscription to 4G, especially if the price is higher than that of 3G.

 What applications are likely to be popular on 4G networks?

 Pankaj Agrawal

4G promises to provide an improved user experience for data browsing, emails and social networking. It will promote high definition voice with rich communication services and ensure an improved voice and video calling experience.

 Kunal Bajaj

Multimedia- and entertainment-led applications will be the most popular 4G services. The promise of a smoother browsing experience; and faster transfer of files, photos, audio and video will drive service uptake. Thus, innovative applications related to entertainment and multimedia will become more popular on the 4G network.

 Hemant Joshi

Applications that are currently being used on 3G will be popular on 4G as well. However, the difference would be the speed offered by and the user experience on 4G, especially for video and data services.

 Dr Mahesh Uppal

Entertainment will be the biggest driver for 4G services because there is a natural limit to the time people spend on applications like banking and governance. For instance, a person may spend a day watching movies or videos, but is less likely to spend as much time on services like education and health care.

 
 
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