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3G May Also Be About Data, Not Just Voice: BDA-FICCI Report

BDA Cell Site 3G

Many VAS and Teleco executives have told us over the past 3-4 months that 3G, whenever it is launched, will primarily be about voice. The hypothesis has been, in most instances, based on the fact that existing operators like Airtel and Vodafone are desperate for spectrum for voice services; if you’re an Airtel subscriber in Delhi like me, almost every call gets dropped. A report on 3G and Broadband Wireless Access by BDA and FICCI challenges that hypothesis as follows:

1. High End Customers Contribute Higher Margins:


At present, the top 9% of mobile subscribers contribute to around 29% of circle revenues, and 45% of margins. Given that over 10 million subscribers in India already have 3G enabled handsets, and there are almost 1.5 million data card subscribers – these subscribers will be the early targets for migration to 3G. So in order to migrate users to 3G, the operators are likely to offer good voice quality, bundled or subsidized high-end handsets, and high-touch customer service. The growth in ARPU in case of 3G services is likely to be limited to access, internet browsing, messaging and email, which a majority of the revenue coming from access charges. 3G data plans will be comparable to DSL offerings, with flat rates and speed based plans offered after the first few years. BDA also expects voice-data bunding for users with fixed rate, unlimited voice plans in later years.

Download the report here

2. Voice & Data Capacity:

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BDA Cell Site 3G

according to BDAs analysis a 3G cell site offers a total capacity of over 3 times the 2G cell site. A majority of this – 55% – is is for data services. In case of the 2G base stations currently in use, almost the entire capacity is meant for voice, and whatever is left for data is also being used for voice. 3G base stations offer 56% more voice capacity, so that frees up capacity for data services. BDA believes that telecom operators will migrate high-end users to 3G networks, and free up voice capacity for 2G subscriber additions. The initial 3G services will support data capacity of around 7.2 Mbps, and can service 250 data customers with around a speed of 256 Kbps, and while they will be limited by spectrum congestion, data capacity and backhaul upgrades, with an increase in stability of the networks and coverage density, the networks will be about data.


Service Offerings: When it comes to the service offerings, the report puts together an interesting set of services, and the propensity of their use among 4 different segments: Corporate/Professionals, Youth and Early Adopters, Mid-Market Segment and Rural/Low End Incremental Subscribers:

BDA Services 3G

BDA projects that the 3G handset subscriber base will be 67.5 million by 2013, with WCDMA/HSPA accounting for 89% of this base, and 24 million 3G modem users. They expect the WiMax subscriber base to be fairly limited, at 10.8 million by 2013. 

It’s a fairly detailed report, covering several aspects of the telecom ecosystem – including the infrastructure rollout and handsets/access devices. A caveat: much of the report appears to be based on discussions with multiple stakeholders in the ecosystem.
Download the report here.

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