4G May Not Become Mainstream Soon

by CXOtoday News Desk    Feb 17, 2015

4g

Reliance Jio Infocomm may be readying to launch its 4G launch sometime this year, but the industry doesn’t expect the technology to gain wide adoption any time soon in India, and believes 3G will remain the mainstay for carriers. According to BusinessandMarket.net, India’s 4G ecosystem is at a nascent stage and it would take 2 to 3 years to ramp up as there was still a lot of scope for 3G services in the country. 

“4G-LTE ecosystem is not mature at a mass scale while consumers in 4G-enabled regions are apparently not looking at it as a value-for-money proposition,” BusinessandMarket.net founder-analyst Deepak Kumar told ET. “3G is still has a long way to go as most of the incumbent operators are currently focusing on monetization of their 3G investments. he said. 

Industry estimates the 3G subscriber base to surge to 400 million by 2020 from nearly 100 million today. Operators had invested a whopping Rs 67,700-crore on buying 3G airwaves and another significant chunk on the networks. Some players like Jio and Bharti Airtel had also bought 4G spectrum at that time. 

Bharti Airtel, India’s number one telco, has since launched 4G services across four circles on TDD LTE technology, which uses the 2300 Mhz band, but hasn’t seen much traction, while Jio is widely expected to start services mid-2015. Both telcos are now eyeing the 1800 MHz band, or the FDD-LTE technology, to deploy 4G services, which is far more developed globally, than the existing 2300 Mhz band. Aircel too has launched 4G LTE in select areas of the six telecom circles that include Tamil Nadu, Andhra Pradesh, Assam, Bihar and Odisha. 

However, the 4G user base on Airtel and Aircel combined is less than 1% of total over 900 million subscribers in India. There are only a few handsets which support 4G TDD-LTE technology, but are on the pricier side, though prices are falling rapidly. Expert say the inflection point of wider 4G adoption would be when devices cost around Rs3,000 or less. 

COAI, of which Jio and Airtel are members, has even asked the telecom department to relax the 4G rollout deadlines by a year, citing the technological bottlenecks as well as the delay in grant of the bandwidth. As COAI director general Rajan S Matthew notes besides lack of vernacular content and devices affordability, the operators have faced significant delays in receiving clearances from the Wireless Planning & Coordination Wing. 

Mahesh Uppal, Director ComFirst told IANS that relevant digital content, may be limited and both difficult and expensive to procure. “This is especially true for content in regional languages. Companies are struggling with business models that might offer sustainable revenues to justify the huge investment in networks, spectrum and content. The ecosystem for 4G rollout is manifestly weak,” he said.

The other challenge for 4G now is the unavailability of affordable devices. The device ecosystem is yet to mature in India and availability of affordable and wider range of devices is still a challenge, believes Jaideep Ghosh, partner, KPMG Advisory Services .“The readiness of eco-system is important, so is customer readiness. Perhaps the larger mass has not yet felt the need for 4G in India. It will take some more time to kick-off in India. Pricing will be an important factor as far as getting the mass market is concerned,” he ssaid.

In such a scenario, the government and telcos have a wide task ahead. They should encourage strategic partnership and create a strong ecosystem where 4G can grow and thrive, believe experts.