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India 3G to suffer another delay?

Posted: 20 Aug 2008 ?? ?Print Version ?Bookmark and Share

Keywords:India 3G service? 3G license? India ministry spat?

A spat between powerful ministries and a senior official on the basis for allotting 3G licenses to operate data service is threatening India's 3G plan.

The dispute could have a major impact on the rollout, and one analyst said the growing uncertainty makes it hard to predict when 3G services will be launched in the country. Additional delays could harm India's wireless industry, the analyst added.

The spat between the federal finance and telecommunications ministries, with the former accusing the latter of keeping it in the dark about the rollout despite the huge financial implications, has raised concerns about another round of delays.

The telecom ministry has said that EVDO licenses will be awarded on the basis of which CDMA operator has the most subscribers in a given region. By contract, 3G licenses will be auctioned. A senior official with India's Telecom Regulatory Authority responded that current CDMA operators cannot be awarded EVDO licenses based solely on the number of subscribers.

3G upgrade
Further delays in rolling out 3G services in India are widely viewed as harmful to the domestic industry, analysts warned. One predicted that 3G services would be launched here during first half of 2009, but only one in five wireless phone service subscribers will being using 3G services in the next four years.

Deepak Kumar, head of communications research at IDC India, added, "On the positive side, there is more information and education on 3G among the potential users, so they are potentially more ready to subscribe. However, further delays may not bode well for the industry."

Operators will be looking to upgrade subscribers to 3G, but phasing out 2G 2.5G services won't happen anytime soon, analysts said. Kumar added that 2G subscribers would likely be moved up to 2.5G while heavy users of 2.5G services would be upgraded to 3G.

"We expect to see 10 [million] to 15 million 3G subscribers in India by the end of 2009," said Madhusudan Gupta, senior research analyst at Gartner. "By 2012, we expect only 20 percent of subscribers to be using 3G. And, unlike the trend in other 3G markets, where the data services used by subscribers make up as much as 30 percent of the average revenue per user, in India it will be up to 20 percent."

- K.C. Krishnadas
EE Times

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