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Why 3G in India could be big business

India’s auction of spectrum for 3G and Broadband Wireless Access opened a new era in Indian telecommunications. Bringing 3G services to India’s rural and urban masses will significantly impact the county’s social and economic development and will change the lives of hundreds of millions of citizens. The challenges are great. Today’s access network, backhaul and power supply does not cover much of the country’s rural and remote areas and today’s networks are not yet prepared for the traffic 3G generates.

We bring  you  this perspective from Shali Thilakan Managing Director, Cable&Wireless Worldwide( India region) , courtesy the recent India special issue of Connect World magazine:

India’s new 3G roadmap creates a significant opportunity for telecom providers to help create and sustain the networks that will fuel 400 million connections in the next four years. The successful conclusion of the auction of 3G cellular and Broadband Wireless Access (BWA) spectrum and the subsequent allotment of this resource to dozens of service providers has helped the Indian government raise over a
trillion rupees (over US$8 billion). The telecom industry’s significant financial commitment to 3G signalled clearly that  India would remain a robust, exciting and challenging turf, not just for wireless service providers, but also for the entire global communications ecosystem. 3G was not just the sensible way to go; it was the only way forward, if India’s own fierce determination to empower her billion plus citizens through technology was to succeed in a reasonable period.

A recent, March 2011, study by the Londonbased Wireless Intelligence on India’s 3Grollout suggests that earlier estimates of the speed and scale of broadband rollout have been too conservative. Indeed, the report suggests that Indian 3G s will reach 400 million connections within four years, effectively upgrading one in three wireless subscribers to broadband speeds. Interestingly, the study suggests that metropolitan areas like Mumbai, Delhi and Kolkata, where 3G might be expected to escalate the fastest, will soon be outstripped by upwardly mobile semi-rural reaches, in states like Punjab, Bihar and Andhra Pradesh.

Therein lays one of the key challenges before the telecom industry - providing broadband networks in India’s vast rural hinterland, where there is little copper or fibre connectivity and where electricity is intermittent or unavailable during business hours. 3G and wireless broadband can address  some of these ‘last mile’ challenges but high-speed connectivity is only part of the solution. A combination of technologies like Multi Service Platforms (MSPs), Multi Protocol Label Switching (MPLS); Internet-based virtual private networks (IP-VPN) and application performance management are often needed before wired
and wireless service providers can ensure the required Quality of Service (QoS) or Service Level Agreements (SLAs) from their own contractors. Wireless Internet and broadband networks also give hope to small businesses, including those working from homebased ‘virtual offices’.

A recent study by Google found that only a small fraction of India’s micro-, small- and medium-sized enterprises (MSMEs) - some two million out of an estimated 35 million, operate online. Interestingly, nearly half of all these ‘connected’ companies actively use the Net as a business-to-business trading window. Burgeoning broadband availability will only see this trend grow as leading MSME verticals - insurance, information technology, IT hardware, travel and tourism harness 3G as a differentiator and look to their telecom providers to provide it in a competitive manner. Even in the urban business environment, zippy, reliable wireless broadband may slowly ‘encroach’ on the traditional turf of pure, wire-based networks like Ethernet or work alongside them as a ‘hot standby’ option. Already available from a few early movers, is what is known as an integrated communication manager or ‘network in a box’. This is a one-box solution for alternative access modes - integrated voice, data and multiple GSM/CDMA mobile connections. These boxes promise to cut communication infrastructure and expenditure for small businesses, hotels, hospitals or educational institutions, by almost a third. The box’s solutions combine ISDN voice/data, cellular GSM, and broadband Internet and allows businesses to mix and match these communication channels throughout their establishments to provide the most cost effective connection
in any given scenario. 

Thumbs up for mobile bankingThe last annual Consumers and Convergence Report from KPMG found that users in India - even illiterates - were in many respects, more mature accepters of technology than those in more developed geographies. They have given a firm thumbs up to mobile banking. Thirtyeight per cent already use their phones to shop from a retailer’s site and 43 per cent were ready to do banking transactions. To meet their heightened expectations for 3G, the banking and financial services sector is having to ramp up its secure wireless transaction networks and extend them into rural reaches, where there is little fixed-line ISDN connectivity. 3G wireless networks hold out the possibility for quick and efficient connectivity and not just to ATM machines in areas with no fibre. They are also fuelling a host of innovative branchless banking solutions, which use a combination of technologies such as 3G, biometric identification and near field communications (NFC). It is now possible for a retail-banking agent to carry all of a branch’s records on a smartphone attached to a thumb print or card scanner and to disburse cash to customers who present a smart card containing their account history.

Several public sector and Grameen (rural) banks are already trying this out on a pilot scale. They are disbursing  payments under the Mahatma Gandhi  National Rural Employment Guarantee  Act in Andhra Pradesh, Uttarakhand and the North Eastern states. India has been a hotbed of innovative technological solutions for what we call ‘zero banking’ - ‘zero’, as in no physical infrastructure. The Bangalore-based product company, Integra MicroSystems, made headlines
and gained customers four years ago when its iMFAST (Integra’s Mobile Financial Applications Secure Terminal) banking solution had its global unveiling at the CeBIT show in Hannover. 
The insurance industry too, is poised to expand its reach in India,thanks to the opening up of the sector to respected global players; secure high speed data networks are central to its new growth plans. When one of the world’s largest insurance groups, serving 30 million customers worldwide, extended its footprint to India, it was able to seamlessly integrate its onshore and offshore customer service operations with its international arms through converged Internet Protocol-driven technologies such as IP telephony, IP video conferencing and
high speed Internet services.  The growth of 3G broadband networks
and services in India is good news for the retail supermarket business that has already begun migrating smoothly from the four main metropolitan centres to dozens of secondary towns and cities. A booming consumer middle class has come to expect and demand the identical retail shopping ambience and quality of service that was
hitherto available only to the fortunate few, who could holiday and shop-till-they-drop’ in places like Dubai or Singapore, Kuala Lumpur or Hong Kong.

If there is one lesson which all telecom industry players serving India have  learned in recent years it is this: Solutions for India must often be crafted in India, keeping in mind the unique challenges and opportunities that the subcontinent offers. Additionally, India’s innovation and creativity has the ability to deliver solutions for a demanding global market. While the core opportunities in India, for
mission-critical communication providers remain in the business-to-business or b2b arena, many of their offerings end up touching the end user or consumer in a manner that was unthinkable even a couple
of years ago. That is because technologies like 3G end up ‘morphing’ many enterprise or corporate tools into mass consumer ones.

HD video.

An excellent case in point is IP-based, high definition video conferencing. Hitherto a preserve of enterprises that could hire or own a hyper real tele-presence type of facility, the technology has been
‘democratised’ thanks to consumer access to HD TV screens, HD webcams and  broadband home networks. International research shows that face to face contact - either by video conferencing or in person, was still the preferred way to ‘seal the deal’ in modern business. An overwhelming 96.4 per cent of respondents in India said they would be more likely to make business decisions if they see the people they are
dealing with, while 70 per cent said they expected to see video conferencing become a regular practice. Prudently, the Indian government’s broadband policy remains platform and technology neutral. In an earlier era, CDMA was allowed to grow alongside GSM. Today cellular 3G, and broadband wireless technologies like WiMAX and LTE have all been licenced - and Indian customers are assured that no single technology will be foisted on them.They will have a choice - and they will decide.

Link to the Connect-World special issue on 3G in India:

May 17 2011