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End of the Road for Indian 3G?End of the Road for Indian 3G?

The rollout of 4G in India could precipitate the demise of 3G.

Gagandeep Kaur

October 13, 2016

3 Min Read
End of the Road for Indian 3G?

Third-generation (3G) mobile technology, which has given so many Indian consumers their first taste of mobile Internet services, is facing an uncertain future in India.

Last month, new entrant Reliance Jio launched a 4G service that could have a dramatic impact on the technology landscape in the country. While incumbent operators -- including Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Vodafone India and Reliance Communications Ltd. -- had already begun marketing 4G, it is RJio's offer of free voice for life, and data until the end of the current calendar year, that has really shaken up the market.

Besides putting the spotlight on 4G, RJio's disruptive move could threaten the 3G activities of the incumbents. India's operators invested heavily in 3G network rollout and spectrum procurement between 2010 and 2015. The somewhat limited take-up of 3G services in the country means a lot of those investments have yet to be fully recovered.

Nevertheless, this limited take-up also means there is a good chance that India becomes one of the first countries to jettison 3G entirely. Outside India, 3G tended to be in use for a number of years before operators moved to 4G. Its relative immaturity in India could persuade operators to abandon 3G efforts and instead funnel resources into the superior 4G standard. For one thing, 4G supports much greater coverage and capacity than 3G. RJio claims its 4G network already covers 18,000 cities and towns and over 200,000 villages, and it plans to cover 90% of the country’s population by March 2017 -- a level 3G never reached.

There is also some optimism that rock-bottom 4G prices will drive adoption and lead to economies of scale. The device ecosystem is rapidly evolving, too. Prices are falling sharply and a 4G smartphone can be had for as little as 5,000 Indian rupees ($74.80), down from about INR7,000 ($104.80) just six months ago. By heavily subsidizing devices that support voice-over-LTE (VoLTE) technology, RJio has brought VoLTE-enabled smartphones within reach of a bigger audience. It has also teamed up with device makers in an effort to lower prices even further. (See Can Lyf Bring Bundling to India?)

Want to know more about 4G LTE? Check out our dedicated 4G LTE content channel here on Light Reading.

In the long run, then, it could make little sense for telcos to continue operating 3G networks. The 3G spectrum they bought in 2010 is valid until 2030. But this spectrum can also be used for LTE. Many service providers will feel there is little point in clinging on to 3G when 4G is better placed to drive economies of scale.

Fourth-generation developments in India might have a huge impact on other emerging markets. With China's 4G market already flourishing, and India now joining the 4G bandwagon, low-cost operating models for the technology could be set for a boost -- especially when it comes to the equipment ecosystem. That might inspire other developing countries to accelerate their 4G rollout plans.

— Gagandeep Kaur, contributing editor, special to Light Reading

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About the Author(s)

Gagandeep Kaur

Contributing Editor

With more than a decade of experience, Gagandeep Kaur Sodhi has worked for the most prominent Indian communications industry publications including Dataquest, Business Standard, The Times of India, and Voice&Data, as well as for Light Reading. Delhi-based Kaur, who has knowledge of and covers a broad range of telecom industry developments, regularly interacts with the senior management of companies in India's telecom sector and has been directly responsible for delegate and speaker acquisition for prominent events such as Mobile Broadband Summit, 4G World India, and Next Generation Packet Transport Network.

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