Saturday, March 20, 2010

3G/WiMAX Finally off-the-block in India

India appears all set to finally auction 3G spectrum after one false start too many. Over 9 incumbent and new entrant operators have applied for the bidding process. While the list has all the usual suspects, a few names sure make you wonder. Videocon, with operations reportedly in only one city currently, Etisalat DB with no operations on ground and S Tel, an operator with a professed interest in low-ARPU C circles of the country makes one wonder if the hype around the India mobile story still continues to be strong. While 3G definitely can act as a boost to low-ARPU hit telcos, however, it is not likely to be a magic pill that will help new entrants rapidly pose a credible threat to established market leaders. At least not with the limited amount of spectrum that is up for grabs. It is in this context the Telenor's response to stay away from the auctions appears a well-taken decision. Indeed, opportunities to gain a 3G presence will increasingly present them as an inevitable market shakeout looks more certain with every passing month.

Despite past expectations, global players that currently don't have a presence in the market have stayed away from the bidding process. While one can debate ad nauseam the benefits of entering or staying away from the Indian mobile market at this point in time, a little less competition might be just what the doctor ordered for this hyper-competitive market. And while we are at it, here's hoping that the 3G pricing, when it finally hits the market in Sept 2010, is more realistic than what we have seen.

Thanks to the delayed 3G spectrum auctions, the collateral damage is more visible on the broadband front. While mobile growth has been extremely strong in the last few years, the same cannot be said of broadband growth. With limited fixed-line network presence across the country, and lack of last-mile unbundling, broadband has been the biggest sufferer thanks to lack of wireless options thus far. Naturally, the auction process for Broadband Wireless Access, tied to the 3G auction process, has received more applications, 11 in all. It has also attracted the attention of technology majors such as Qualcomm who are hoping to queer the pitch for WiMAX proponents in the auction. However, that is unlikely to take away from strong bids from WiMAX operators who are looking to use the technology to reach an under-served audience. To me, these auctions are probably far more significant in terms of the impact that they can have on India.

Be it 3G or WiMAX, it is about time the Indian consumer gets to experience the benefits of technology advancements. Here's hoping that the auction process and the subsequent service launches finally see the light of the day.
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