The majority of broadband wireless access (BWA) licensees were aiming to commercially launch 4G services in 2012. However, even as the year draws to a close, the Indian telecom industry is yet to see any major initiatives in the segment. All BWA licence holders except Bharti Airtel have failed to achieve their mid- to late 2012 target for service launch.

Currently, Bharti Airtel is the only player in the Indian 4G market. The operator launched services in Kolkata in April 2012, and subsequently introduced them in Bengaluru and Pune. Other operators such as Reliance Industries Limited-owned Infotel Broadband, Aircel, Augere and Tikona Digital Networks are aiming at a 2013 launch.

tele.net takes a look at the factors that are delaying 4G service launch…

There have been significant policy developments in the past several months. The 2G spectrum controversy resulted in the Supreme Court’s cancellation of 122 licences awarded in 2008. This led to the exit of some players and policy uncertainty. In this scenario, 4G roll-out plans took a back seat. The conclusion of the spectrum auction in November 2012, though not very successful, is expected to lend some stability to the sector and expedite 4G roll-out in 2013.

Bharti Airtel launched 4G services in April 2012 amidst regulatory uncertainty. However, the response to these services has been tepid. Currently, the company has just over 4,000 subscribers. High pricing of these services and limited availability of devices are the two main reasons for the low uptake.

Also, potential 4G users are concentrated largely in urban areas. These subscribers are expected to access the internet through hand-held devices but this consumer segment comprises only 10-15 per cent of the country’s telecom subscriber base. The lack of adequate content and applications, an underdeveloped device ecosystem and limited coverage make 4G less attractive in its current form.

In particular, the limited availability of devices and equipment is posing a major challenge for the uptake of 4G services. Indian operators have decided to deploy the time division duplex (TDD) version of long term evolution (LTE) technology for offering 4G services. However, it is a relatively new version of LTE and has been deployed only in China and Japan. In contrast, advanced telecom markets like the US and Europe have mostly deployed the frequency division duplex (FDD) variant. Currently, over 400 global operators are supporting LTE-FDD, while only about 100 carriers are deploying LTE-TDD. Therefore, most of the leading network equipment manufacturers are focusing on developing FDD devices. Though data dongles and the customer premises equipment (CPE) for the TDD version are available from Chinese manufacturers, 4G handsets are not readily available in the market. Bharti Airtel, for instance, is conducting trials for the first LTE-TDD-compatible 4G handset in India, the Huawei-Ascend P1 LTE smartphone, with China-based Huawei Technologies.

Also, the 2300 MHz band available in India for offering 4G services is not considered very efficient. The iPad 3 tablet or the recently launched iPhone 5 does not support LTE in the 2300 MHz band. The government is planning to auction airwaves in the more efficient 700 MHz band, but this is likely to take place in another two to three years.

The way forward

Though there are several impediments to 4G service uptake, market analysts believe that the scenario will improve over the next year. TDD is a new technology and, therefore, involves several deployment challenges. The ecosystem is expected to evolve with the increased availability of devices, which will rationalise tariffs.

Analysts expect India to witness the mass adoption of 4G services in another three to four years. The entry of Infotel Broadband in the Indian 4G market can be a game changer, since it is the only company with a pan-Indian licence and is, therefore, expected to influence market dynamics in terms of service demand and pricing. Meanwhile, chipset vendors have already started developing dual-mode chips that support both the TDD and FDD variants of LTE.

Going forward, with increasing internet awareness and the emergence of e-commerce, the demand for LTE services will increase. Rational pricing of CPE/ dongles and the higher uptake of applications such as video and IPTV will drive 4G service adoption. With most players gearing up for a mid-year launch, 2013 is expected to witness significant activity on the 4G front.