4G’s smooth rollout will be challenging: Analysts
Even 3G services are not well entrenched all across India and expecting people to move from 3G to 4G subscription is not realistic.
The advent of fourth generation (4G) wireless broadband services by yearend will be a big digital event for India. Questions however are there about the commercial viability of 4G service in India for the lack of adequate data demand and doubts about affordability. On top of 4G’s weak global ecosystem, the peculiarity of the Indian market might make its rollout quite challenging.
“The first challenge would be to address the price sensitivity of the Indian consumers,” says Dr Mahesh Uppal, Director, ComFirst, a niche consultancy group on telecom policy and regulation. 4G services services should be available for up to Rs 500 per month on 4G enabled smart phones that should be available for Rs 4,000. But “the vast majority of Indians do not use a mobile handset worth over Rs 1,500 and therefore, services at the promised price would still be a premium service for many netizens,” says Uppal.
The second challenge is demand. People should be queuing-up to get the higher bandwidth in order to make 4G’s roll-out successful. “That craving is still not evident in India,” says Uppal. He adds that 3G services are not well entrenched in India and expecting people to move from 3G to 4G subscription is not realistic.
As compared to demand for voice services, the commercial demand for data services is still evolving. The 4G services launched by Airtel some time back in selective pockets have not been a runaway success. The other challenge pertains to the choice of technology. The 2,300 MHz frequency, which 4G services would run on, is capable of delivering a smooth data service but its voice part is still not credible. Though, “it does not means that voice is technically impossible to do but the issue is not trivial,” cautions Uppal. So some extra technological effort would be required by the companies to address the voice part.
Analysts are upbeat that if these issues are addressed then India could successfully achieve its ambitious mission of “Digital India” that aims to transform the nation into a digitally empowered society and a knowledge economy. A recent study by the World Bank underlines that the 10% increase in broadband penetration, particularly in a developing economy, can enhance the country’s GDP by 1.4%.
As compared to demand for voice services, the commercial demand for data services is still evolving. The 4G services launched by Airtel some time back in selective pockets have not been a runaway success.