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How 3G technology will change our lives
Get Ahead reader Vishal Jain gives you a synopsis of how the introduction of 3G services by telecom operators will change our lives in response to our reader invite (below).
Vishal, an MBA in Information Management from SP Jain Institute of Management & Research, Mumbai, has eight years of experience in the financial services technology industry and currently works with The 451 Group.
Having raced to the bottom in their voice tariffs and saddled with low average revenue per user, Indian carriers are seeing hope with the launch of 3G services.
While MTNL and BSNL had a lead of almost two years they have failed to make the cut because of their lack of understanding of the desired device and content ecosystem.
Tata DOCOMO, Aircel, Reliance Communications and Airtel have launched their 3G services and it's expected they will heavily rely on smartphones, application stores and multimedia content to evince interest from the consumer.
As already proved in western economies consumption of data has been the single biggest factor for change in the fortune of carriers.
As we start to talk about what this means and where this will lead to let's take a look what 3G means and how it will change the way you consume telecommunication services and products in India in the years to come.
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How 3G will change our lives
3G networks are more efficient than 2G networks because of the wider frequency band that they operate in. This means higher bandwidth content such as music and video can be effortlessly streamed over the network. There are many competing technologies within 3G, however the most preferred across the globe is High Speed Packet Access (HSPA).
Airtel and Aircel have chosen HSPA while Tata DOCOMO and RCOM have selected an even more efficient version HSPA+ (Evolved HSPA) that promises even greater network speeds.
HSPA+ is the same technology that T-mobile is rolling out as 4G in the US.
HSPA gives a download speed of 14 Mbps (megabits per second) and an upload speed of 5.8 Mbps.
HSPA+ gives a download speed of 56 Mbps and an upload speed of 22 Mbps and supports Internet Protocol (IP) architecture. In contrast 2G working on GSM/EDGE technology gives a measly data speed of 56 to 360 Kbps.
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How 3G will change our lives
So for a country that loves to talk what difference does high speed Internet make?
It does and that is where the whole ecosystem, demographics and the content ecosystem dovetail perfectly.
A simple but startling comparison is a good place to start: In a population of 1.2 billion there are just around 40 million PCs neatly overshadowed by 600 million mobile phones.
In India where the fixed line network is scarce and inefficient 3G technology marks a huge connectivity leap and should be hailed as an enabling technology in bringing Internet connectivity to all.
This means that a phone can be used to watch live TV, used as a virtual phone using a Voice Over Internet Protocol (VOIP) service, do video-conferencing using Skype, use Facebook, Orkut or Twitter, listen to live music from Internet radio or a music service like Spotify, share photos, use as a tether to download books and play games.
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How 3G will change our lives
This shift is also expected to give a boost to the fortunes of the application developer community in India, not a big one at the moment and more used to working on pre-historic Symbian platform that has been chugging along because of Ovi music.
The mobile app development market is a huge opportunity and if valuations of certain companies like Foursquare and Rovio are anything to go by it has the potential to create a new industry in India.
Few of the companies like Hungama Mobile, OnMobile and IMIMobile are moving out of their VAS legacy to embrace this new reality. Various indicators such as strong mobile advertising numbers from Inmobi, mobile marketing, huge VAS content consumption and several mobile banking and payment ventures are encouraging enough to indicate a latent mobile commerce appetite.
Other than the crucial infrastructure upgrade, carriers have been busy lining up content, smartphones, data plans along with a strong marketing exercise to educate customers. Here is a lowdown on the essential components in this ecosystem.
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How 3G will change our lives
App Stores
These are virtual stores through which consumers can download software applications for their mobile phones. Software applications could be anything from gaming, document manager to a train timetable application.
Some of the applications are free and supported through advertising; others carry a monthly subscription fee while few of them carry a one-time download fee.
Typically carriers have their own app stores however the experience from other markets tells that carriers do not provide a great experience.
Tata's is called 3G Life services, Aircel is busy promoting its Pocket Apps, Bharti has come out with App Central and RCom has been working behind the scenes with GetJar to launch its app store.
The biggest winners will be Samsung, Nokia and Apple who have an established App store and provide a quality that cannot be matched by carriers.
However, there is a strong market for regional content and none of these providers has anything to vet that appetite.
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How 3G will change our lives
Smartphones
Phones that support 2100 MHz frequency will work on 3G. Most of the smartpones built in the last two years should support 3G. However there are a few that support only GSM/EDGE frequencies.
So what are smartphones?
If you have in hand a phone with the processing power of a computer it's called a smartphone.
HTC Desire, Samsung Galaxy, iPhone 4 are few of the smartphones that boast of 1 GHz processing power along with a smart UI, HD playback and some cool features such as accelerometer, digital compass and GPS.
Nokia N8 launched recently lags behind in its processing power and the UI.
Naturally these phones also excite developers to develop applications that fully utilise the device capability otherwise risking disengagement with the consumer.
This is the reason why device manufacturers and carriers are finicky about quality of mobile applications in order to maintain a higher quality of engagement with their consumers.
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How 3G will change our lives
Advertising and marketing
Monetisation of content is the key to rewarding all participants in the ecosystem. Similar to Internet advertising, as mobile viewership will increase, brands and advertisers will start promoting themselves on mobile phones.
The ad revenue generated goes directly to the app developer with the carrier and ad network retaining a cut. This is a big opportunity as most of the users prefer a free application or content and advertising is a primary medium to incentivise the developer.
As shown in the developed markets mobile advertising has grown multi-fold in the last one year moving into sophisticated formats such as proximity advertising and instant promotions.
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How 3G will change our lives
Data plans
After having done all the effort this is where the carrier expects a lift in its topline. At the moment most of the data plans have been tiered based on data consumption and future plans will evolve around usage patterns.
For example, if a user spends most of the time on Facebook than an unlimited Facebook plan can be purchased.
Similar plans would be available for Skype or heavy chat users.
With a surge in traffic these kinds of plans will help carriers optimise traffic and better utilise existing assets.
The possibilities are endless and we have just scratched the surface.
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