India is embarking on a new phase of development in its burgeoning mobile services market. The country’s first commercial 3G services will go live in New Delhi on December 11.
Significantly, services are not being provided by one of the country’s many high-profile, privately-owned network operators. Instead, it is the relatively minor player Mahanagar Telephone Nigam Ltd (MTNL) that is leading the mobile technological revolution in India.
Like its larger, and higher-profile peer Bharat Sanchar Nigam Ltd (BSNL), MTNL is state-controlled and is predominantly active in wireline telephony and broadband services. Both offer full-mobility GSM and limited mobility CDMA-based telephony services, but were late arrivals in a market that is now dominated by local family-run business empires such as the Anil Dhirubai Ambani-led Reliance and major foreign players such as Vodafone.
The Indian government pointedly awarded 3G licences to MTNL and BSNL in September this year, well ahead of making 3G licences available to independents, a number of whom are already chafing over delays in the licensing procedure and which will not welcome the incumbents’ early start. [However, there is plenty of room for multiple players - with more than 250 million GSM subscribers in 2007, India is the third-largest mobile market in the world, behind China and the US, but boasts mobile penetration of little more than 20%.]
As regulatory delays and a paucity of available spectrum force a deferral of the licensing of other players to early 2009, MTNL and BSNL are expected to benefit enormously from pent-up demand for 3G services, especially in the more affluent markets such as the metropolises of Delhi, Mumbai, Kolkata, and Chennai. MTNL plans to launch in Mumbai ‘soon’, while BSNL plans to launch in Chennai in January.
BSNL has made more of an impact in the GSM and CDMA arena than MTNL, largely because it has a larger licence area in which to operate and also due to its massive existing fixed-line telephony and broadband customer base. This bodes well for its foray into 3G, despite the likelihood that user revenues will not be very much higher than those for ‘standard’ GSM services.
Nevertheless, with Indians’ heavy reliance on their mobiles as a replacement for unreliable and costly fixed-line and broadband connections (indeed, Juniper Research believes that the mobile handset has become India’s de facto means of accessing the Internet, as well as its primary games console), uptake of 3G services is expected to be rapid and huge.
Thus, the launch of 3G in India (and, soon, in China) may go some way to easing the current performance pressures on handset and infrastructure vendors. As in the operator market, it will be interesting to see which brands will benefit most from this new era.
Tags: 3G, Bharat Sanchar Nigam Ltd, broadband, BSNL, CDMA, Chennai, China, fixed-line, GSM, handsets, India, India mobile, Kolkata, Mahanagar Telephone Nigam Ltd, mobile, mobile devices, mobile handsets, Mobile India, MTNL, Mumbai, New Delhi, Reliance Communications, UMTS, Vodafone, Vodafone Essar, Vodafone Group, WCDMA, wireless, wireless infrastructure
[...] Whilst the Talk to a Doctor concept seems a little embryonic it is fantastic that the India mobile market is so forward thinking that it can see the potential for 3G – even though the country’s first commercial 3G network went live only a few weeks ago. [...]