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Himanshu Kapania: 4G Not Realistic Till We Get 500M 3G Subscribers

Idea Cellular’s Himanshu Kapania does not seem to be too enthused about 4G. Infact, it appears that he is far from satisfied with the way subscribers are responding to 3G. He mentioned that he wants to see the 3G subscriber base at 500 million before rolling out 4G. Kapania feels that telcos have invested huge sums in the 3G spectrum auctions, and until they see a good return, investing in 4G is pointless.

He went on to the extent of saying that analysts and experts have got their 3G penetration estimates all wrong, and that only a small percentage of users are switching to 3G, as the penetration of 3G devices is low.

Although, he expected 3G to pick up and stated that he did not believe that 3G was only for the elite and that he expected the handset replacement market to see 200-250 million new customers, and 25%-30% subscribers to switch to 3G, by next year.

He also said that high ARPU customers in India was a myth and in realistic terms high ARPU is in the range of $6-$8.

Remeber that during Idea’s recent investor conference call, Kapania had mentioned that uptill now Idea has signed on over 2 million 3G subscribers, but on an average only 22%-25% of these customers are on daily VLR. He had also said that only about  8% of Idea’s subscribers have a 3G  handset and the ecosystem for 3G has to go up. The company has decided to build a future data factory which can handle many times the current daily data volume of 30 Terabytes.

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Although all the telecom operators present at the Qualcomm IndiaOn agreed on mobile being the way ahead for increasing Internet penetration in India and the role of 3G, no body talked about cheaper 3G data tariffs and just made generic statements.

Frankly speaking, we’ve been hearing about this since time and eternity, with telcos merely paying lip service. We know there is a need for cheap devices. We know that we need more indigenous content and indic applications and we do agree that it is high time we got things in place. But we need telcos to come forward and make 3G affordable, for the eco-system to work in favour of these ideas, instead of cribbing about paying huge sums of money in the 3G auctions and not being able to reap benefits. And all the talk about leapfrogging to 4G at this stage is far from being realistic.

MTS was the only one to actually launch cheaper 3G devices, including sub-Rs 5,000 Android phones during the event. Vsevolod Rozanov, President & CEO of MTS, informed that the company had sold a million Evdo data dongles in India. He felt that the Government must play a role in creating demand for mobile internet based services. He said that pickup is much faster in tier 3 and 4 cities if services are deployed efficiently and at low costs. Rozanov gave the example of MTS’s recent Evdo deployment across the Delhi-Jaipur highway, which has already crossed halfway in terms of capacity utilization, within 4 months of launch. MTS has also tested Evdo Rev B networks in Rajasthan.

Qualcomm, the company which had won BWA spectrum in Delhi, Mumbai, Haryana and Kerala circles, in the auctions held last year, seemed to be enthusiastic about 4G deployments. It even announced TDE-LTE devices with OEMs, and said that the 4G launch will take place soon. However, the company, as well as other telcos did not comment on the exact time line for the commercial launch of 4G services.

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