Has GSM's data technology bombed?

GPRS has been less than a resounding success in India so far. Though some operators are now pushing it aggressively, newer technologies in the offing could sideline it

Joy Menon (name changed) is a tech savvy senior company executive who uses the latest geegaws.

Some 15 months ago, he bought a General Packet Radio Switching (GPRS)-enabled mobile phone, thinking that he'd be able to browse the web and send and receive e-mail.

But Menon is frustrated by his GPRS experience. It takes a lot of time to download email and the content he can access is limited, he complains.

Global system for mobile (GSM) service companies had better beware "� Menon's complaint is commonly voiced by several mobile service subscribers.

They'd also better note that their code division multiple access (CDMA) rivals like Reliance Infocomm and Tata Teleservices are poised to offer subscribers much faster downloads of exciting content.

GPRS is a wireless communications standard that runs at speeds of 64 to 68 kilobits per second (kbps), in theory at least (telecom industry analysts, however, say that actual speeds can be lower, 30-40 kbps).

Since GPRS supports a wide range of bandwidths, it is said to be particularly suited for sending and receiving bursts of data such as e-mail.

Mobile service subscribers can also play mobile games if their phones are GPRS-enabled. But GPRS is 2.5G technology, a halfway house between second generation or 2G mobile phone technology and much faster third generation (3G) technology like Enhanced Data Rate for Global Evolution (EDGE) and CDMA20001xEvDO.

Over a year ago, GSM companies stepped into the data market by launching GPRS.

Till then, they had scoffed at data's potential in India. Indeed, when Reliance Infocomm chairman Mukesh Ambani told Ice World in an interview (15 January 2003) that Reliance Infocomm was confident that the data market would boom, the managing director of a mobile services company then privately exclaimed that this would not happen.

Even today, some GSM companies look upon data as a luxury that the mass market can't afford. Most Bharat Sanchar Nigam Ltd (BSNL) subscribers, for example, are to be found largely in smaller towns and rural areas.

"This is not for customers who want voice. It is for those who are not price sensitive but are conscious about the content provided," says a BSNL official.

But private GSM service companies quickly began singing a different tune. GPRS was seen as their answer to the superior data carrying capability of CDMA, the rival technology that Reliance and Tata Teleservices have adopted.

Even so, most GSM service providers have failed to live up to customer expectations. BPL, Hutchison-Essar, Idea Cellular and Bharti Tele-Ventures together have under 300,000 GPRS subscribers.

The four together have some some 16 million subscribers. To put that into perspective, under 2 per cent of their subscribers subscribe to GPRS.

Hutchison-Essar, one of the more successful in the data business, reports that its GPRS subscribers send some 60,000 multi-media messages (MMS) a day. In contrast, Reliance Infocomm's data site receives about 1.5 million hits a day, according to Reliance Infocomm officials.

True, Reliance Infocomm's site is free, at the moment. It will start charging for some data applications from June 1 and so the site could receive fewer hits then.

And Hutchison-Essar charges for data. Its GPRS customers can download MMS cards from Hotmail for Rs 10 each, though it itself charges Rs 5 per clip downloaded (it earlier charged a rental of Rs 99 a month).

Yet GPRS has unquestionably been bedevilled by problems in India. Kobita Desai, research analyst at Gartner India, cites three reasons for GPRS having been less than a roaring success in India "� the price at which the service provider provides the service, the data speed and the non inter-operatability among service operators.

Many GSM service companies charge a monthly fee for GPRS. BPL's monthly tariff of Rs 199 is the highest, though it includes unlimited access to GPRS. Add to this the cost of downloading clips (upwards of Rs 5) and for downloading games (Rs 50 and above) and a subscriber can land up with a tidy bill.

"Monthly rentals have been the biggest entry barrier for most of the value-added services, be it roaming, STD/ISD or even facilities like billing and voice mail," says an industry analyst.

Adds he: "If rentals are reduced and download rates made reasonable, GPRS could take off, like roaming did in the last one year."

Not all agree, however. Kunal Ramteke, marketing controller at BPL Mobile, thinks that the problem is not high rentals or pricing. "We may look at rentals if it proves to be an impediment to growth," he says.

Then, GPRS's relatively slow speed adds to subscriber costs because his mobile phone service bill goes up. The managing director of a GSM mobile service company privately agrees that GPRS won't take off unless data are available far more quickly.

"Unless connectivity improves and it becomes easy to access, the subscriber will never get hooked on to this service," he says, pointing out that the short messaging service (SMS) took off only after SMS became available at the press of a button.

Besides, GPRS-enabled handsets were, at least initially, high priced, with low end phones costing upwards of Rs 15,000 (only in the past few months have handset prices fallen to a more affordable Rs 7,000 and above).

Finally, mobile service companies used to focus on voice and did not invest enough in content.

That, however, is changing. With 1,50,000 GPRS subscribers "� a number that's growing rapidly "� Hutchison-Essar has over the past two years worked with a host of content partners to provide applications like "click and print" (that is, shooting photographs, sending them to, say, Kodak and getting them printed at a Kodak outlet), gaming, news, sports, astrology, stock prices, fashion shows and so on.

Mohit Bhatnagar, vice president, new product development and alliances, Bharti Tele-Ventures, says that, among other things, Airtel's astrology service is extremely popular.

Bharti has also tied up with lottery company terminals so that subscribers to its GPRS services can subcribe to lotteries online.

Adds Harit Nagpal, vice president, corporate marketing, Hutchison Essar: "The market for non-voice services is increasing rapidly, almost doubling every year. This is a high growth area, untapped as yet. " Nagpal says that the company has spent a lot of time trying to understand the needs of subscribers.

"We have worked out the like and dislikes of our customer. It is not age centric. Almost all age groups avail of the facility, although the needs may be different," adds he.

Others are scrambling to push GPRS in a bigger way. BPL is planning to roll out GPRS services in other circles, step up marketing and increase content.

"A slew of marketing initiatives are being planned. Road shows and consumer awareness camps are being planned to popularise the product and give customers the experience of data services," says Ramkete.

BPL will also launch MMS for pre-paid subscribers too. Bharti is expanding its range of offerings. "Three more applications will be introduce in the next few months," says Bhatnagar.

GSM service companies are also in talks on launching a GRX exchange. Confirms Sukanta Dey, chief marketing and commercial officer, Idea Cellular: "We are in talks with other service companies on launching the GRX exchange."

Essentially, this is an exchange that will help GPRS subscribers to receive and send data worldwide, even if their service provider does not have a GPRS-enabled network. GSM service companies are hopeful that the exchange will be in place within the next three to six months.

Yet nearly all the GSM service companies are upgrading their networks to EDGE, a 3G technology that offers much faster download speeds (144-156 kbps).

That implies that they're recognised that they won't be able to confront the challenge posed by companies like Reliance Infocomm "� which will soon launch Evolution Data Only (EvDO "� 2.4 mbps) services "� by sticking to GPRS.

They'd also do well to cock an eye at what Reliance Infocomm is or will be doing on content. In sum, the way the Indian data market is evolving, it could soon be time to say farewell to GPRS.