3G: Defining Mobility for the Next Generation
Vish Iyer, VP ServIce Provider, Cisco India and SAARC
Imagine yourself as a sports enthusiast waiting for the evening to see your favorite World cup finals. You leave office with a hope to make it on time to enjoy the match in front of a large plasma screen and catch all the action live. You hit the road, find yourself stuck in a never ending traffic jam and realize that by no means can you reach home before more than half the match is over. In today’s scenario, all you can do is feel sorry for yourself.
However, the situation would be very different a few years from now thanks to the launch of streaming video services. With a 3G-enabled handset and video services via 3G, not only can you see the match on the move but also enjoy it uninterrupted, as streamed on a live television set.
3G services will help the mobile market transition from speech and low rate data transmission to medium and high speed data for video ushering in the much-awaited mobile broadband phenomenon. This change would require heavy investments from service providers but returns are almost certain in a rapidly growing telecom market, like India.
According to FICCI, the 3G subscriber base is expected to reach 90 million by 2013, accounting for 12% of the overall wireless user base in India. By 2013, 3G service revenues are expected to generate US$15.8 billion, accounting for 46% in overall wireless service revenue. A significant contributor would be the increase in the share of non-voice, value-added services (VAS). The Average Revenue Per User (ARPU) from VAS is expected to rise from the present 9% to nearly 23% of the overall wireless service revenue. To ensure this market growth, service producers will have to make the telecom ecosystem work as a collaborative unit where bandwidth does not become an issue.
3G is expected to foster the emergence of hybrid business models in service provision. 3G networks are expected to enable services with additional value, which will be contributed by market players other than the mobile network operators. These players will include application/service providers, content providers and service/content aggregators.
The transition from a rigid operator-centric network to a dynamic open market should be evolutionary. It should create business models that preserve the positive features of the existing paradigms, while removing some of their limitations. With high bandwidth supported 3G networks and appropriate ecosystem support, technologies such as video-on-demand, video conferencing, tele-medicine, mobile TV and location based services will come within the reach of every mobile customer irrespective of the mode of access.
India being a different market from the West, operators will need to look beyond the developed markets and apply their own understanding to the Indian wireless context. Just as telecom operators had invested in extensive wireless 2G networks ahead of demand, 3G operators need to proactively deploy large networks to fully realize 3G potential.
India happens to be market where voice and SMS have been the key drivers for the growth of the telecom industry. The entry of 3G will change these dynamics if service providers offer the right content with good bandwidth.
Video and data based applications will take over voice and SMS as key growth drivers and become the focus area for all service providers. However, demand for data/video rich applications in different markets will depend on various factors and needs of the local market. Providing right services at different price points will be a critical differentiator. Video calling is expected to be a major selling point in metros. Besides offering the right product mix, service providers will also have to ensure good infrastructure for uninterrupted supply of data.
In the post-3G era, innovation will be the name of the game. To maintain currents levels of growth, the telecom industry will shift to a locally-relevant, innovation-driven model that uses 3G technology as a catalyst. This is expected to create a host of B2C(business to customer) and B2B (business to business) applications, develop e-governance projects, and open up new markets for many products in rural areas.
Innovation by mobile operators would involve a three-fold transformation:
- Network transformation: Being a late adopter, India has the advantage of learning from the experience of 3G deployment in the developed world. This will help build a cost-effective and modern 3G network. We have a chance to move from legacy to all-IP system that can drive voice, data and multimedia on the same network.
- Service transformation: Operators need to roll out innovative, yet affordable 3G services countrywide. They need to evolve new models of revenue and risk share with vendors.
- Business transformation: Operators must build strategic partnerships with vendors and MVNOs (Mobile Virtual Network Operators) for faster time-to-market through turnkey deployment and integration, and offer more consumer-friendly applications.
Going forward, as demand for data and video services increase, SPs will need to upgrade their infrastructure to meet greater demands. Maintaining cost efficiency will be critical. With the kind of opportunities that are available, India can easily move ahead of the developed markets in the adoption of 3G services. India has the right mix of IT skills, entrepreneurial talent, latent demand and market size which have to be brought together to create a telecom ecosystem that can serve as a prototype for emerging markets and help us gain global leadership in telecom.