3G, though off to a slow start, is now poised for growth with rationalized pricing (a trend started by Airtel, which is now rolling out 4G and copied by most of the bigger operators). While the number of mobile users with 3G enabled on their handsets is just 4%, the number’s a bit better if you throw in dongles (about 15% overall).
LTE is the name of the game when it comes to the early rollouts of 4G. Bharti Airtel and RIL are the early movers. Airtel has already launched 4G services in two circles, Kolkata and Bengaluru. It intends to follow up on this by launching 4G in Karnataka, Maharashtra (including Mumbai), Punjab, Delhi, Haryana and Kerala.
Hurdles to surmount
The preferred and cost-effective spectrum for 4G is the 700 MHz band, which the government is working to release.
Then there’s the tepid response to 3G. Biswajit Biswas, Head of Strategy and Solution for Wireless BU, Tata Elxsi, said, “If we look at the data usage in India, the average per user is about 600 MB per month which is one fourth of what a user consumes in Japan, Korea or a Western nation. Indian users will need some time to outgrow this and feel the need for using 4G products. However, scenarios are changing; hopefully we will see the 4G demand catching up faster than expected in the coming years.”
“The Industry is keeping quiet on 4G. BSNL and Airtel have made some headway but nothing can be said till the commercial launch happens and price points are out in the open,” explained Benoy CS, Director, ICT Practice, Frost&Sullivan, South Asia and Middle East.
4G services would need infrastructure upgrades both at the access as well as the core and that could spell a good amount of CAPEX for the players.
Then there’s the fact that although the 3G rollout followed European standards, in 4G India, taking a cue from China, is going its own way.
Devices the crux
There are over 30 million 3G connections in India and this is expected to grow , to 100 million in 2014. Data is expected to be the new growth driver for Indian telecom. Mobile data traffic is expected to grow at a 108% CAGR. Going ahead, most of the country will access Internet over a wireless device.
Kunal Bajaj, Independent Telecom Consultant, commented, “More than the data charges for 4G, which are expected to be on a steep curve initially, it is the price of devices that is going to have a major impact on the uptake of 4G in the country.”
There hasn’t been any notable progression on the device front in India yet. We mostly have the standard difference to blame. While some available devices, like the latest iPad are compatible with LTE that uses 700 and 2100 MHz spectrum, the standard followed in the western world, it is not in sync with the TDD-LTE (Time Division Duplexing- Long Term Evolution) that India is following for 4G and which runs on 2300 MHz frequency spectrum.
India went in for the TDD mode because it did not have the luxury to use the large frequency band, that FDD (Frequency Division Duplexing) calls for, as it is not available in the country for auctioning. Having said that, initial adoption, as was the case with 3G would be through dongles not handsets.
Rumors are also rife about Samsung doing something in the 4G domain and Olive Telecom is working with Israeli chipset maker Altair Semiconductor to develop devices for India’s BWA market.
Tough turf for Regulators
The industry is currently jostling for 700 MHz frequency, which is considered the best spectrum for 4G. “I don’t see any new spectrum being made available as of now. Even if regulators announce that operators can do 4G in 1800 MHz, the quantum of spectrum available is going to render that technologically impossible,” detailed Bajaj.
Paul of Juniper agreed, “Regulatory issues are certainly a deterrent to the rapid launch of 4G services. The availability of the 700 MHz band across India is going to be critical. There is a general understanding on this matter and we will soon see this spectrum being auctioned.”
Another positive step in this direction is the decoupling of spectrum and telecom operator licenses. This is likely to encourage flexible partnerships and more open trading of available spectrum.
To top the spectrum struggles are the licensing issues. In fact, if looked at in retrospect, 4G licensing is a great opportunity for regulators to learn from the mistakes that were committed during the implementation of 3G.
The industry is also looking up to the regulators in order to make 4G a more feasible proposition in terms of implementation. Mittal suggested that like other nations, India could also deliver 4G by pairing unpaired, unused spectrum, but said that a tangible roadmap can only be decided upon by the decision makers. “History suggests that unpaired spectrum will trade at a much lower price per MHz/population than its FDD equivalent. With large amount of available unpaired spectrum and growing capacity demands, TD-LTE has gained a lot of traction worldwide.”
Tech overhaul
While CAPEX cannot be avoided in terms of infrastructure overhaul, 3G networks, for the operators who do have the licenses, could save the day. The LTE technology is implemented as an additional access technology, parallel to existing 3G. It integrates at the core by sharing a set of well known interfaces. LTE can also share the same authentication and user database servers, thereby allowing the operators to provide the 4G services to the existing 2G/3G users.
“In most cases, site and other backhaul network will be reused and investment would be required solely to hook up the new radios and EPC/ Gateway components,” opined Biswas. He was also of the view that some of the deployment challenges of LTE could be better addressed by using small cell configurations, which were more efficient for addressing coverage and capacity problems.
Elaborated Paul, “4G /LTE services use a different spectrum as it is heavily data-centric (in contrast to the voice-centric 2G). While the radio infrastructure need an overlay system, most of the backbone networks could be shared with adequate engineering changes. Capacity planning and Quality of Service (QoS) are challenging aspects here.”
Bajaj added that operators who already had 3G coverage would overlay 4G and look at identifying areas with maximum data consumption for roll-outs. “However, those operators who do not have 3G exposure in major circles, could end up making a significant investment in LTE,” he said.
Most Indian operators are heavily focused on their traditional prepaid voice revenue. At the same time, their stated plan is to shift this revenue stream slowly into alternate areas like broadband data and Value Added Services (VAS). This could entail a fresh look at their current infrastructure to become more IP-centric and traffic engineered.
Giving an operator’s perspective, Rajgopal of Airtel remarked, “As applicable to any new technology or service rollout on such a scale, the launch of our 4G LTE services involved fresh planning, expertise and investments. 4G functions as a wireless technology and doesn’t rely on existing 2G / 3G networks.”
Early strides
Spectrum and policy issues remain unclear but the first steps towards 4G have been taken. “These are yet early days for 4G. We are having evolving conversations with customers about their requirements but we cannot yet spell out a strategy. We are however, mindful of the market trends,” said Sumeet Walia, SVP and Head, Global Enterprise Solutions, India and APAC, Tata Communications.
LTE is considered to be a breakthrough technology for providing superior last mile connectivity. However, this would depend on several factors like spectrum usage, radio planning efficiency, form factor, configuration used and several other things like device availability and tariff plans. Once operational, 4G is being claimed as the technology that will usher in a new connected era and provide the much needed thrust to new services in areas that have not yet been fully explored for wireless services interaction; including consumer electronics and appliances, health care, public utilities etc.