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India's S Tel Eases Toward 3G Launch

Light Reading
News Analysis
Light Reading
9/30/2010

As its bigger, more established rivals rush headlong into a speedy debut for their 3G services, relative newcomer S Tel Pvt. Ltd. , the only mobile services startup from the "Class of 2008" to have secured 3G spectrum in the recent auction, is taking a more measured approach.

While some with tens of millions of mobile customers -- like Bharti Airtel Ltd. (Mumbai: BHARTIARTL), Reliance Communications Ltd. , and Aircel Ltd. -- are pushing for a first-quarter 2011 3G launch, S Tel, which only received its license in January 2008, is aiming for a mid-2011 launch. (See Aircel Earmarks $500M for 3G, India's 3G Equipment Market a 'Bloodbath', India's 3G Auction Ends, Raises $14.6B, India Watch: The Road to 3G, India's 3G Players Ready for Swift Launch, and India Gets Its 3G On.)

S Tel, though, is one of India's smaller players. Currently active in only five of the country's 22 circles (service areas), the operator has just 1.5 million 2G customers, offers its services in rural areas with relatively low teledensity, and is under little competitive pressure to roll out its 3G-based offerings. (See Indian Mobile Sub Base Crosses 650M, S Tel Launches in India, and A Guide to India's Telecom Market.)

S Tel, a joint venture between the Siva Group (formerly Sterling Infotech Group) and Bahrain Telecommunications Co. (Batelco) , was awarded 3G licenses in three circles (Orissa, Bihar, and Assam), and plans to spend 7 billion Indian Rupees (US$157 million) rolling out its 3G network.

"There are some challenges associated with 3G. To begin with we have spectrum in circles where teledensity is very low, so uptake of 3G services is some time away. Besides, prices of the devices, as well as that of the services, might make [3G] unaffordable in our circles. So, we have decided to launch it by mid next year," the carrier's chief technology officer, J Sugumaran, tells Light Reading Asia.

And Sugumaran make it clear that S Tel is committed to the market for the long term, despite the intense competitive pressures that are forcing others to consider their future and even approach the government about returning their licenses. (See Indian Startups Seek Exit.)

The CTO confirms that S Tel has not made any such request to the authorities. "We are not looking at exiting the market. It is clear from our strategy. We have already launched operations in five of the six circles [in which the carrier holds a 2G license]," he says.

In fact, the carrier believes it can differentiate itself from its rivals by focusing on quality-of-service issues and enabling an enhanced customer experience, especially while its networks are not overloaded.

"We have also put in additional sites where we feel the traffic [volumes] will be greater, and this helps us in offering better services than others to our subscribers," states Sugumaran.

— Gagandeep Kaur, India Editor, Light Reading

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