The battle for the mindshare of close to 600 million Indian mobile subscribers is getting intense, and it's the choice of technology that will determine the outcome
A few years back, telecom operators like Bharti Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea battled over cellphone techologies with a David -- code division multiple access (CDMA) -- being pitted against GSM -- a Goliath. GSM has emerged a clear winner.
A similar battle has now ensued with two rival technologies -- 3G Vs WiMAX -- battling for mindshare. The government is expected to net nearly Rs 50,000 crore from the 3G and broadband wireless access (BWA) auctions. However, even as the 3G auction is underway, the successful foray of WiMAX (a BWA technology) is not only being threatened by the broader acceptance of 3G (a Goliath in many respects) but also by another BWA technology called Long Term Evolution Time Division Duplex or TD-LTE.
It may be argued that 3G technology is more suited to voice while Worldwide Interoperability for Microwave Access or WiMAX is better known for its data speeds. The non-voice revenue mix of Indian wireless operators is about 10 per cent as against 25 per cent for mature markets due to scarcity of spectrum. So ideally, 3G and WiMAX should be complementary -- one technology for voice, and the other for broadband data services.
However, 2G (and 2.5G) telecom operators in India, according to some analysts, are likely to leapfrog to TD-LTE rather than bid for WiMAX spectrum in the 2.3 GHz band.
TD-LTE is all all internet protocol (IP) network. The world's largest mobile operator by subscribers, China Mobile plans to use TD-LTE for its next generation network. Russian operator Svyazinvest, too, will adopt TD-LTE, and Qualcomm is bidding for TD-LTE spectrum in India.
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TD-LTE is compatible with 3G WCDMA/HSPA and EV-DO technologies. "We believe that the current 2G bidders for 3G spectrum will be positively predisposed and remain accommodative of TD-LTE because these two ecosystems are complimentary. Another facilitator for adoption of this model will be the availability of handsets that offer a seamless blend across frequency bands in the 2.1 MHz-2.3 MHz between 3G and LTE. Globally, such handsets may be available by end 2010. While prices will be high initially, the prices will fall exponentially in the next 3-4 years," says Alok Shende, Principal Analyst, Ascentius Consulting.
Detractors sound a note of caution. "WiMAX has been there for four years now. TD LTE is yet to start anywhere in the world,leave alone FD LTE (which is a 4G rather than a 3.5G or 3.9G technology like TD-LTE). Why is India being used as guinea pig for unproven technology for which there is no single network, no single chip, and no single device? This is a big concern for the nation and if Qualcomm succeeds in the bid,it would end up depriving the nation of having broadband growth on a proven wireless technology like WiMAX," counters C S Rao, Chairman WiMAX Forum India.
| GAIN FROM AUCTIONS The auction of 3G and Broadband Wireless Access (BWA) spectrum put together is likely to fetch around Rs 50,000 crore for the government. Paired spectrum of 3 blocks of 5MHz will be auctioned for 3G in the 2.1 GHz band, while for BWA, it will be 2 blocks of 20 MHz spectrum available in the 2.3 GHz band. |
Total nine firms, including India's top-six private mobile operators, are bidding for the 3G spectrum, while 11 bidders are in the race for the BWA spectrum
The winning firms have to deposit the money within 10 days after the auction, but they will be awarded spectrum only in September, meaning commercial launch of 3G services should be possible only in early 2011."The number of client devices for LTE are few, and we do not see the implementation of LTE technology taking place till 2012. What we are seeing in Europe, Sweden and Norway are only prototypes. LTE uses technology like MIMO which sucks battery life and hence it will be a couple of years before we find LTE dongles in mobile devices," concurs Luke Thomas, Program Manager for BWA, Frost & Sullivan.
WiMAX is also backed by major players like Intel (which would ideally want WiMAX dongles and PCMCIA cards in every desktop, netbook and other mobile device), Alvarion, Beceem, Motorola, Samsung and ZTE. LTE, on the other hand, is being supported by players like Qualcomm (which has said it will bid for TD-LTE), Ericcson and Nokia Siemens Networks.
But WiMAX has its critics too. For instance, Thomas cautions that the 2.3 GHz being auctioned in India for WiMAX is not a globally harmonised band (a contention which Rao of WiMAX Forum disagrees with) and hence "the WiMAX forum will have to create a new test-bed to certify the consumer premise equipment (CPEs) and base stations". He adds that WiMAX is yet to find traction around the globe.
A Strategy Analytics report, meanwhile, predicts that India's WiMax subscriber base will reach 14 million by 2013 and grow annually at nearly 130 per cent. Furthermore, the study projects initial investment in WiMax ventures will top $500 million in India. All Indian operators have tested and trialed WiMax and they understand the potential of WiMax for broadband services growth in India. But WiMAX pilots by most players like Bharti, Reliance Communications and BSNL have taken place in the 3.3 GHz band (which is known as fixed WiMAX), notes Thomas, while the spectrum being dished out is in the 2.3 GHz band.
| Great, but where is 4G? This is called 3.9G According to the International Telecommunications Union (ITU), 4G is defined as International Mobile Telecommunications-Advanced (IMT-A) and hence LTE-Advanced will be compliant to that definition. Even though WiMax and LTE are widely dubbed as 4G technologies, they are technically not. |
Nevertheless, WiMax networks are likely to solve the last-mile access challenge that has plagued broadband penetration in India (only around 8 million subscribers), compared to wireless penetration of 45 per cent, according to Naresh Chandra Singh, Principal Research Analyst, Gartner.
The third generation or 3G technology, meanwhile, remains dominant by far. India may have over 1 billion mobile users by 2015, going by estimates. 3G networks that promise speeds of up to 2 Mbps (in practice, it could be a maximum of 384 Kbps or even less, say experts). Analysts, who have been tracking the ongoing 3G bidding process, are betting on Bharti, Reliance Communications and Vodafone bagging pan-India 3G spectrums, while Tata Teleservices, Aircel, Etisalat and Idea are likely to be 3G contenders in specific circles. Abhishek Khanna, Group Manager of Evalueserve expect 3G subscribers to be around 200 million by 2013.
Rural India, according to analysts at Cygnus, could be a key market for 3G rollout. Once 3G services are launched and the challenges linked to prices and right-priced devices are addressed, the opportunities are huge.
But even as the debate over technologies continues, analysts also believe that the spectrum being dished out may not be sufficient. "Spectrum is lifeblood and for consumers who prospectively wish to avail better quality internet and voice services. However, the spectrum that is being offered, in blocks of 5MHz for 3G and in blocks of 20MHz for BWA falls significantly short according to international benchmarks for other markets," explains Shende.
| Technology | What it means | Players | Speeds |
| 3G | Third Generation (3G) technology delivers wide-area wireless voice telephone, video calls, and wireless data, all in a mobile environment. Compared to 2G and 2.5G services, 3G allows simultaneous use of speech and data services and higher data rates (minimum 2 Mbps peak bit rate). | Bharti Airtel, Reliance Comm, Vodafone, Idea Cellular, Videocon, Idea, STel, Aircel, Tata Tele | Can offer speeds of up to 14 Mbps on the downlink and 5.8 Mbps on the uplink. |
| WiMax | WiMax, an acronym for Worldwide Interoperability for Microwave Access, is a telecommunications technology that provides fixed and fully mobile internet access. WiMax is classified under Broadband Wireless Access (BWA) | Vodafone, Bharti Airtel, Reliance Comm, Aircel, Tata Tele, Qualcomm, Tikona and Idea, Spice, Infotel Broadband and Augere | Can deliver speeds of up to 144 Mbps for downlink and 35 Mbps for uplink. |
| TD-LTE | Time Division Duplex Long Term Evolution is a 4G radio technology designed to increase the capacity and speed of mobile telephone networks. | Qualcomm , Ericsson, Huawei, Motorola | Can provide downlink peak rates of at least 360 Mbps and uplink of at least 80 Mbps |
| DATA SOURCE: Web * All speeds are theoretical maximums and may vary as per the use of external antennae, distance from the tower and the ground speed (e.g. communications on a train may be poorer than when standing still) | |||
For instance, the UK has as allocated 15-20 MHz of spectrum to 3G service providers. As it is, many of the 2G players bidding for 3G spectrum plan to use spectrally efficient 3G spectrum to remove congestion on 2 G networks and improve quality of voice services. Furthermore, given the larger population density for India and the innate tendency for consumers to generate high volumes of data on 3G (for example, Iphone users on AT&T network generate 10-50 times more traffic than prior version of phones) the current allocation of 5 Mhz of spectrum for launch of 3G spectrum looks woefully inadequate for data applications.
The question then is, will India’s experience with 3G turn out to be as emasculated an experience as we have had with the current 2G services, with poor reception, frequent call drops and poor data speeds, being the norm than an exception. "No, not necessarily," says Shende, adding: "One of the key salient points of the current 3G and BWA auctions is that it provides for an exit hatch for savvy players to chart the path forward for the launch of LTE and 4G in India."