While 3G spectrum auctions are yet to take place in India, globally, major telecom operators and vendors are moving towards 4G. With 4G technologies like long term evolution (LTE) and ultra mobile broadband on the horizon, top officials from leading telecom service providers discuss the opportunities and challenges as well as the business case for 3G today...

What are the opportunities and challenges associated with 3G?

Vijoy Kumar
Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) are currently the only operators offering 3G services in India. It has the first-mover advantage as spectrum auctions for private operators are yet to take place.We intend to capitalise on the opportunities presented by being the only player in the 3G space and have incorporated many features in our 3G equipment to get an edge over competition.

But since the technology is new in India, there are many challenges. First, there is an urgent need to train our officials and channel partners to market these services. On the consumer side, subscribers with 3G-enabled handsets need to be educated on the applications possible with 3G.

The price of handsets is another impediment to the uptake of these services; the cheapest 3G handset currently available in India costs about Rs 8,000. The high prices prevent the entire youth segment –­ which constitutes college students who are likely to be heavy 3G users for most of the applications like video downloads –­ from opting for these services. Even otherwise, 3G requires a critical mass to attain a faster subscriber acquisition rate. It is necessary to create awareness about this technology.

Jagbir Singh
There are many challenges associated with 3G. First, getting the licence itself is a challenge. The spectrum available for these services is also very little. In order to put the network in place, an optical transport network needs to be installed. Currently, the optic fibre available is very limited.

Providing quality services to customers to roam between 2G and 3G services is also a daunting task. 3G services will enable consumers to access broadband and mobile internet. They will also be able to use services like video streaming. These are the three key 3G applications. 3G will also enable broadband access in rural areas.

Kuldip Singh
The main opportunity comes from the fact that there is a huge requirement for data.Broadband is gradually becoming a necessity and will not be restricted to a fixed platform. The demand for mobile broadband will increase, and most of the users will comprise in-roamers, that is, people who come from abroad and require broadband to send emails and avail of other services. As a result, the requirement for wireless broadband will increase. 3G is a very good version of broadband as it offers high speeds and other advantages. There are a lot of services such as video and audio streaming and gaming that can be offered with this technology. For example, subscribers can view sports events on their mobiles anywhere.

Marketing is a very big challenge with regard to 3G because it is a service which will not get sold just through advertising.In the beginning, one-to-one marketing will be needed, with someone going and explaining all the features and advantages of 3G to the user. The popularity of 3G would then spread by word of mouth.

The second big challenge is handset settings. As subscribers do not like to make complicated changes, the settings will have to be kept very simple or should be preloaded in the handset. The cost of handsets, though, is not a very big issue.The real cost will be on account of spectrum as it is very limited and will restrict bandwidth, as a result of which costs would go up as well.

What are the network upgrades required for 3G technology?

Vijoy Kumar
While the core network (the intelligent network, billing and the mobile switching centre [MSC]) will essentially remain the same, the radio access part will require an upgrade. In place of the base station controllers and base transceiver stations in the 2G network, Node Bs and radio network controllers (RNCs) will be installed for 3G coverage. Such a 3G network will be an overlay network. The RNC will be connected to the existing core network. In the core network, with the introduction of Node Bs and the RNC, more MSCs will need to be installed to augment capacity.

Jagbir Singh
For 3G, a new radio access network will be installed. More traffic will necessitate augmentation of the transmission network.While in theory, no changes are required in the core network, capacity will definitely need to be increased.

Kuldip Singh
3G services require capability in the core network. A GSM network comprises two parts, the core network where the switching-cum-routing takes place and the radio network which picks up the radio signals and sends them to the core. The core network has to be 3G ready and the radio network has to be separate from the normal radio network. The 3G network will be an overlay to the existing 2G radio network, whose core is already 3G ready.

What are your company's plans for 3G with regard to launch targets and investment?

Vijoy Kumar
BSNL has already rolled out 3G services in 55 cities in the north and east zones, and has plans to cover a total of 441 cities in these two zones, 134 cities in the south zone and 145 cities in the west zone.These cities will mostly comprise the district headquarters.

We have ordered the equipment needed for these ongoing rollouts. We are looking to cover most of these cities by March 2010. However, work might finish earlier needed.

We are targeting about 1.3 million 3G subscribers in 2009-10 though our installed capacity is for 5 million subscribers with 20 per cent loading of the equipment which we have ordered. Basically, in 3G, subscriber addition is not as important as erlang capacity utilisation, which is determined by the number of heavy users on the network. Erlang capacity usage generates revenue for operators.

Jagbir Singh
We are waiting for the spectrum auction and licence. After getting the licence, we will be ready to roll out 3G networks in six to nine months' time.

Kuldip Singh
The investments made by MTNL have been mostly incremental. The core, which is 3G ready, is the common element for which we did not have to do anything. The only part we added was the radio network, costing Rs 2-Rs 2.5 billion.

With next-generation technologies like LTE and ultra mobile broadband only a few years away, does it make better business sense to deploy 3G now or would it be better to leapfrog to the new technologies?

Vijoy Kumar
In my opinion, waiting for 4G does not make business sense because by the time we are ready to deploy 4G, 5G will be round the corner. Telecom technologies are constantly evolving, and if we keep waiting for new technologies, we will be unable to deploy the existing technologies. Circuit switched telephone exchanges are still being used despite the arrival of IP-based exchanges that are more cost effective and technologically superior. Both kinds of exchanges are being used simultaneously.

Different segments of the subscriber base will adopt different technologies. For example, only a certain portion of the subscriber base will adopt and switch to 3G while the rest will continue to use the existing 2G services. Thus, both technologies will coexist.

As a consumer, the technology used by the operator to provide services is irrelevant as long as the requirements are being met through adequate data speeds. For instance, technologies like high speed packet access, which provides 2 Mbps in the uplink and 14.4 Mbps in the downlink, will be able to deliver a host of applications to the consumer.

Jagbir Singh
LTE will take another two to three years to become commercially viable. 3G, for instance, was being talked about for 10 years and has become a reality only in the past three years. Similarly, in my opinion, LTE is not likely to gain traction any time soon. Moreover, this country does not have the spectrum for LTE. Hence, clearly, there is a business case for 3G in India.

Kuldip Singh
3G contains the road map to LTE, and the technology will automatically be upgraded to LTE when the latter comes to India.

Commercial LTE networks have still not been launched.

Companies today cannot wait for a development; I feel that operators will go ahead and launch 3G services and not wait for LTE.

When do you expect technologies like LTE and ultra mobile broadband to be available in India?

Vijoy Kumar
Technologies such as LTE will be available in India in two to three years as the equipment for LTE will not be commercially available in the global markets before next year.

Jagbir Singh
As I mentioned earlier, LTE will take two to three years to get commercially deployed; in India, it is likely to take still longer.

Kuldip Singh
LTE will be launched in the global markets after at least two years. India has not lagged very far behind the international markets: we launched ADSL2+ right after the US at a time when it was not used anywhere else in the world We were also the first to launch internet protocol TV on MPEG 4 while other countries were using MPEG 2.

So, technologically, we are not very far behind other telecom markets. The minute LTE comes, we will migrate to the technology.

Personally, I am very pro-femtocell and so is MTNL. Femtocells will give MTNL a unique edge over the competition as they work on a broadband line and the company's broadband customer base is substantial and increasing daily.

In the metros, we can make all our existing copper lines broadband enabled.Wherever broadband is available, spectrum will not be used as services will be offered through the broadband network.Therefore, spectrum will be saved and our customers can avail themselves of cheaper services whenever they are in the vicinity of femtocells.

The only limitation is that femtocells require at least two carriers and we have only one carrier as of now.