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Data Uptake: Current status, key challenges and future road map: Nikhil Jain, COO, Elitecore Technologies

March 15, 2013

According to a report by Wireless Intelligence, 3G service adoption in the country is yet to pick up (after nearly two years of its launch). Currently, 3G services account for only 4 per cent of the telecom subscriber base. India’s active 3G subscriber base is only about one-third of the total user base, at 10-12 million active users – among the lowest in the Asia-Pacific region.

Meanwhile, 4G is making inroads with operators like Bharti Airtel, Tikona Digital, Bharat Sanchar Nigam Limited, Reliance Communications (RCOM) and Videocon Mobile Services launching their own “premium” services in various circles. However, tangible growth in the demand for these premium services will be witnessed only after two years, as smartphones supporting 4G-long term evolution are expensive (priced at about Rs 30,000 currently).

Another challenge for Indian operators is that even with the modest uptake of 3G/ 4G services, most users have low to medium data requirements.

The cost challenge

The cost of high speed data services appears to be the main reason behind their slow uptake. While a basic 3G/4G plan is priced four to five times higher than a similar GPRS-based web service, most operators are competing to introduce lower tariffs and provide high speed data access through affordable plans.

However, the key reason for the low uptake is that customer expectations related to the quality of 3G/4G services (speeds of over 10 Mbps) are much higher than the capability of mobile data networks. Therefore, the argument related to high costs does not hold good.

Moreover, it is a matter of time before there is a massive correction in data plan costs across these premium networks. If recent history is an indicator, RCOM transformed the voice market by slashing call rates, and other operators had no option but to follow suit. Since the mobile data market is believed to be passing through a similar phase of growth, it is safe to dismiss the notion that cost barriers are a major hurdle in the adoption of 3G/4G services.

The real challenge

GPRS network operations are being impacted by issues related to network congestion, which usually lead to a poor end-user experience.

However, on 3G/4G networks, data traffic automatically increases as soon as the required infrastructure is in place. Considering the limited 3G spectrum allocation in India (only 5 MHz of available spectrum per operator; 4G allocation is slightly better with 20 MHz spectrum), operators are aware that they can run out of bandwidth even while providing average data services.

Strategies and solutions

Operators are fast realising that any future initiative on the 3G/4G data services front should meet two minimum requirements:

•Providing a superior user experience

•Monetising data services effectively.

Consequently, the need of the hour is to create attractive, personalised, high- value and affordable data plans. The technology used at the back end of high speed data plans is not very important as long as the aforementioned requirements are met.

Apart from femtocells, picocells, microcells, etc., Wi-Fi is a viable medium to offload 3G/4G data traffic. So far, it was perceived as a simple extension of a service provider’s fixed broadband business or a key element of its hotspot infrastructure. However, the technology offers several advantages.

Since Wi-Fi does not require licensing, it does not involve challenges related to limited spectrum. It is an economical connectivity medium, which makes it a viable mobile broadband access mechanism for the majority of subscribers.

Also, the technology supports high quality data usage such as video calls, file downloads and high definition video content. Thus, Wi-Fi is a viable option for operators looking to offload data. Also, tie-ups with partner hotspots and carriers can help create viable business models for Wi-Fi offload, as Wi-Fi plans will continue to be in demand.

Operators are seeking to monetise their existing 2G/3G subscriber base with Wi-Fi promotion plans. The biggest challenges for them are identifying their own 3G users when the latter enter the operator Wi-Fi hotspot zone; and sending appropriate intimation/notifications to these users with the URL and log-in credentials, service set identification, etc. to access Wi-Fi.

Vendors like Elitecore have up come with location-aware service modules in Wi-Fi offload, which can be a very innovative approach to providing value to existing 3G customers. Under this model, the location-aware service module identifies the location of the user by mapping the base transceiver station’s ID for that location with the Wi-Fi hotspot ID, as soon as the 3G user enters a location having the operator’s Wi-Fi hotspot. Several vendors are offering PCRF (policy and charging rules function) solutions to provide a valuable proposition for operators who want to charge subscribers for real-time usage; provide attractive value-added, personalised plans; and gain real-time visibility of network usage.

Conclusion

Global studies concur that Wi-Fi will continue to account for the majority share of mobile data traffic in the future. To encourage the uptake of Wi-Fi services, Indian operators ought to deploy Wi-Fi offload, as it is currently the most viable option available for seamless and secure data connectivity across several devices.

 
 

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