India Gets Its 3G On

The Indian government surprised the industry today by allocating 3G capacity to this year's spectrum auction winners on time. (See India's 3G Auction Ends, Raises $14.6B.)

There had been growing concern that the handover of 3G spectrum would be delayed beyond the agreed-upon September 1 deadline, but the Department of Telecommunications duly obliged, marking the start of a new era in the Indian telecom sector. (See India's 3G Players Ready for Swift Launch.)

Now the race is on to get competitive 3G services into the market -- currently, only the state-owned operators, Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) , are offering 3G services -- with some of the large, privately held mobile operators talking about launching before the end of this year. (See MTNL, BSNL Prep for 3G Battle .)

Both Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Reliance Communications Ltd. have said their networks are ready for 3G, and that they'd be able to launch services within three-to-four months of the spectrum allocation.

"In GSM, our network is relatively new, and most of the components are 3G ready. If the spectrum is allotted on time we would be able to launch our services by the end of the year or early next year," stated Mahesh Prasad, the president of Reliance Communications, on the sidelines of a recent press conference. Reliance won spectrum in 13 of India's 22 circles (service areas) and has already formed a separate unit for the rollout of 3G services. (See Reliance Sets Out Its 3G Stall, Reliance Comm Goes Universal for 3G, and Reliance Reports Q1, Announces Deals.)

In the same vein, Bharti Airtel's Wireless CEO, Sanjay Kapoor, said at a recent industry event that the company’s network, transmission, passive infrastructure, and intelligent network systems are all 3G-ready, and that Bharti could launch 3G services by the end of the year if the spectrum was made available on time. (See Tariff Squeeze Hits Bharti's Profits .)

The 3G spectrum winners are currently finalizing inter-circle roaming deals that will enable them to offer their services outside the circles in which they have been allocated spectrum. (See 3G to Drive Roaming Deals in India and India's 3G Players Face Share Issue.)

However, Reliance's Prasad also indicated that the high price of the spectrum means it will be a long time before the operators can make any profits from their 3G investments, though he declined to indicate just how long that return-on-investment period might be. Reliance Communications paid 85.9 billion Indian rupees (US$1.86 billion) for its 3G spectrum. — Gagandeep Kaur, India Editor, Light Reading

digits 12/5/2012 | 4:24:52 PM
re: India Gets Its 3G On

It's not like India to set a 3G deadline and then meet it.... 

That's not the real; issue, of course. The elephant in the room (so to speak) is whether the Indian operators have the business models that can deliver a return on their 3G investments. 

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