The surge in data demand is driving the roll-out of 4G networks and the launch of 4G-enabled devices. While operators have taken some initial steps, much more needs to be done to facilitate the large-scale adoption of 4G services in the country. This includes the efficient utilisation of broadband wireless access (BWA) spectrum, the exploration of 4G deployment in the 1800 MHz band, and research on the use of small cells in Indian 4G networks. Industry experts share their views on the country’s 4G prospects, operator strategies, and the technological requirements for facilitating 4G adoption in India…

What are the key reasons for the delay in the widespread launch of 4G services in India?

Kunal Bajaj

There are different factors responsible for the delayed launch of 4G. When BWA or 4G licences were auctioned in 2010, it was still a very early stage for data. It is only now that we are seeing a significant consumer demand for 3G data usage. Another factor for the delay is related to the maturity of long term evolution-time division (LTE-TD) technology. Devices with this technology have only recently become available globally in a more affordable range and as a result, the evolution of the device ecosystem has also been quite recent. The delayed service roll-out has also been due to the lack of a business case for operators.

Inderpreet Kaur

The main reason for the delay is the lack of a developed device ecosystem. Indian operators are using the 2300 MHz band for LTE services, which is not a common band for 4G globally. Apart from this, players like Bharti Airtel and Aircel are mainly offering 4G as an in-house broadband service, that is, for home broadband users. The focus has been on capturing users looking for alternative high speed broadband services so that they can simultaneously connect multiple devices to the internet.

The 4G devices landscape at present is dominated by mobile Wi-Fi (Mi-Fi) and dongles, with 4G LTE-enabled smartphones accounting for a share of less than 5 per cent. Widespread LTE adoption, which can be seen in many countries including China, will be difficult to achieve unless 4G is promoted as an on-the-go mobile service that targets the 900 million mobile subscribers in the country. Airtel has launched 4G services in 16 cities, but it offers 4G data on smartphones in just one: Bengaluru. The price of LTE-enabled smartphones varies from Rs 18,000 to Rs 60,000, again limiting the target segment. Operators and device vendors are now taking initiatives to launch handsets in the sub-$100 range in order to make 4G accessible to a wider user base. China Mobile and Bharti Airtel recently concluded an agreement to jointly procure 4G devices with a view to bringing down device costs for the end-user segment. While operators in India have priced 4G at the same price as 3G, they need to extend 4G data services to the prepaid segment. Despite India being a predominantly prepaid market, 4G is currently marketed mainly to post-paid mobile subscribers.

Along with addressing issues like device affordability, operators need to create a case for users to migrate from 2G or 3G to 4G services. The lack of content is the main challenge, since 3G offers a fairly good browsing experience, and commonly used messaging and VoIP services like WhatsApp and Skype run well over a 3G connection. Operators need to develop meaningful LTE-only services and specific content (music, videos, games) that would define the need for a 4G connection.

Tanveer Mohammad

The primary reason for the slow adoption of 4G services in India has been the lack of a mature device and service ecosystem. While operators can upgrade their networks to 4G, its offtake will be slow till customers see value in the new technology. India is a price-sensitive market and 4G devices need to be affordable (in the $50-$100 price range), and the related applications need to offer an improved experience. It has not been long since 3G was launched, and the market is still pushing 3G smartphones. This has increased mobile internet adoption, but customers need to experience the benefits of higher speeds if any 4G shifts are to take place. This will only come with relevant services and not just faster downloads.

How has the 4G ecosystem evolved since the auctioning of BWA spectrum in 2010? What has been the global experience so far?

Kunal Bajaj

The global 4G ecosystem has been evolving over the past few years and India has also reaped its benefits. The availability of LTE-TD-enabled devices and the mainstreaming of network equipment have facilitated 4G adoption, as has the maturing of 4G deployment knowhow. The global 4G experience has been positive as the technology is able to deliver speeds that cannot be achieved on 3G. This has helped operators capture on-the-move users who are looking for the same kinds of speed that they can get on home broadband networks. The experience has primarily been on LTE-fixed division (FD), not LTE-TD, and mostly in the 1800 MHz band rather than the 2300 MHz band.

Inderpreet Kaur

In India, 4G is still at a nascent stage, but it has been growing steadily since the first launch by Airtel in 2012. At a global level, we have seen an increase in the number of LTE launches in the 2300 MHz band, which is good from the availability standpoint of supported devices. The focus is now on launching multimode devices that work across a range of spectrum bands and support multiple technologies, which would help lower the barriers to 4G. In India, operators have started deploying 4G in the 1800 MHz band, which is among the mostly widely used 4G spectrum bands globally. This would help in widening the range of smart devices that work in the Indian 4G context.

Tanveer Mohammad

The adoption of any new mobile technology is dependent on device availability. When the government auctioned 4G BWA spectrum in 2010, operators were still struggling to get their 3G business models right and dealing with an evolving device ecosystem. It took some time for 3G-enabled phones that breached the $100 price point to get the right volumes and achieve mass market adoption. Globally, 4G LTE networks have been implemented but device costs are still very high for emerging markets like India. The technology has been launched in some cities, but has a low rate of adoption. The mass adoption of 4G LTE is still a few years away and dependant on customers seeing its value.

Sunil Tirumalai

Ecosystem maturity is no longer a technological hurdle but a commercial one. At present, 288 commercial LTE networks have been launched globally, with seven operators offering voice over LTE (VoLTE) and at least one major network running only on LTE without any 2G/3G fallback (LG Uplus in Korea). AT&T and VZW are keen to shift voice traffic that is currently occupying 2G/3G spectrum to LTE. The LTE standard has evolved to include SR-VCC technology, which allows a smooth move from VoLTE to 2G/3G voice. The handset ecosystem for a dual-mode network is also not a challenge, at least from the technology standpoint. The issue, particularly for India, is related to the commercial feasibility of LTE. Even here, we believe that the aggressive 4G roll-out by China Mobile in 2014 has ensured that:

• The cost of LTE base stations have more or less converged with that of 3G base stations.
• The cost of LTE smartphones (with frequency division duplexing+time division duplexing capability) has also reduced and reached the sub-$100 category.

What are the strategies telecom operators should adopt to encourage 4G uptake in the country?

Kunal Bajaj

Operator strategies are still at their initial stages as they are in the process of carrying out significant launches. So far, the focus has been on offering 4G on a fixed wireless terminal, or home or small business connectivity. Therefore, the concentration is on indoor fixed connectivity rather than fully mobile usage.

Inderpreet Kaur

From the pricing point of view, it has been observed that operators in the most successful LTE markets have either quickly moved to price 4G at the same level as 3G after the first network launch, or launched 4G at no premium to 3G. However, to be successful, 4G operators will also have to make their pricing mechanism evolve by bundling more value with 4G subscriptions, particularly in developing markets where there is a huge price differential between 3G and 4G smartphones. Operators should thus be able to provide differentiated content, and subsequently move subscribers to higher-cost monthly plans by offering more data and content at higher prices.

In many other markets, it has been seen that operators are bundling 4G with newly launched devices to encourage customers to shift to high-priced monthly plans or make 3G subscribers migrate to 4G. For instance, in India, Bharti Airtel has bundled 4G with the Xiaomi Note and the iPhone6 and iPhone6 Plus. Operators planning to offer sub-$100 smartphones and making a case for the mass marketing of 4G services could see some success in a market like India, which has just started to gain momentum in smartphone adoption with penetration still below 15 per cent.

Tanveer Mohammad

Operators will have to launch customised 4G plans for Indian customers. Creating awareness of the internet’s value among low-income, low-information populations is also important or they will never realise how it can help transform their lives. In addition, localising content for increasing its relevance for the local population is extremely vital. There is much more to this than simply carrying out translations. For one, there are infrastructural challenges related to network coverage, content-hosting availability and device compatibility. But there are also more nuanced challenges around payment limitations, cultural factors and government or third-party support. In a country that speaks more than 700 different languages, localising content is certainly not an easy task but it is the single most important factor for capturing consumer attention.

Which spectrum bands are the most suitable for 4G roll-outs and why? Is the spectrum held by various BWA licensees adequate to meet the expected demand for high speed data?

Kunal Bajaj

When the BWA auction was held, spectrum in the 2300 MHz band was offered on a TD-LTE basis. Operators have not yet carried out much of a 4G service roll-out in this band, so it remains to be seen whether it was ideal. Meanwhile, telecom operators are also showing significant interest in the 1800 MHz band, with many players having bought this spectrum in the auction. Therefore, it is a mix of spectrum in the 1800 MHz and 2300 MHz bands that will finally prevail in the Indian market. There is a lot of capacity that can be created in the 2300 MHz band but it is difficult to estimate whether operators have ample spectrum as that can be determined only after it has been used and the operators have matured.

Tanveer Mohammad

In India, BWA or 4G LTE spectrum was allocated in the 2300 MHz band in the 2010 auctions. However, the liberalisation of the 1800 MHz band has allowed 4G services to be rolled out in this band as well. The 1800 MHz band is considered a globally harmonised band for 4G networks, but the 2300 MHz one is also gaining momentum, and the device ecosystem is developing. As and when the 700 MHz band is made available and the 850 MHz band is liberalised, they can also be used for LTE deployment. While the spectrum holding in the 1800 MHz band is under pressure as it is also used for delivering 2G voice and EDGE-based internet services, 20 MHz in the 2300 MHz band is good enough for an LTE launch. For 4G LTE-based high speed internet services to take off, the government needs to offer larger amounts of spectrum at the right prices in the right bands. Allocating non-harmonised bands for LTE will only delay its adoption due to the lack of a mature equipment and device ecosystem.

Sunil Tirumalai

While a lower frequency spectrum can be good for coverage purposes, spectrum holdings in a large quantum can come in handy for providing high capacity at specific locations. The higher frequency bands have poorer penetration characteristics and hence require greater network investments to match the coverage on lower frequency bands.

What technology options are available for addressing the spectrum shortage challenge in India?

Kunal Bajaj

Going forward, small cells will be the key technology in use. However, it is expensive and difficult to deploy. Small cells will be deployed with both 3G and LTE, and also be used for Wi-Fi carrier offload. This will help manage network traffic by offloading it from 4G and 3G networks. But this technology will be precarious to deploy as it requires a very deep backhaul presence, which is not necessarily available with all operators. Apart from small cells, smart antenna systems, in-building penetrations and in-building solutions will help with relocating networks and in navigating network capacity and quality.

Inderpreet Kaur

We have seen operators using LTE-Advanced and LTE in the unlicensed band as some alternatives for addressing spectrum challenges. Bharti Airtel and China Mobile have recently collaborated to jointly test and develop technologies to meet the growing demand for data in both countries. This is a good example of Indian telecom operators learning from their global counterparts.

Tanveer Mohammad

India is the second largest telecom market in the world, but doing market-specific research and innovation is not feasible for equipment and handset-makers. They evaluate their R&D investments on the basis of mass adoption in multiple markets to push down costs. Rolling out 4G or any new technology in non-harmonised bands takes a longer time. The Indian government and the regulator need to create flexible spectrum management policies that are designed to meet spectrum shortage challenges. Keeping an optimum number of operators for creating healthy competition and refarming spectrum can also ease some pressure.