Telenor CEO Jon Fredrik Baksaas believes the 3G handset ecosystem in India is still not at the level where the market could suffice on 3G service and at this stage, 2G service is more than sufficient in the country right now. This came up when a caller on the Telenor earnings conference call asked about how the company feels about not having a 3G service in India, after witnessing 3G growth in Bangladesh, and potential 3G growth in Pakistan. Baksaas also pointed out that 3G investments by other telcos has been fairly limited in the country and the mobile Internet penetration is still very low and the 2G data service is serving very well to those who are on mobile Internet. This way, the company can target the low cost user base with very aggressive pricing as compared to others and sustain the pricing levels. Remember that Uninor had chosen to focus only on basic services (voice, SMS and basic Internet) in six operational circles and and offer the most aggressive plans in these services, after it noticed that data wasn't contributing to its revenue growth and this trend was likely to continue for a few years. It has broken even in five of its six operational circles until now and is targeting an overall break-even by the end of this calendar year while aiming to stay well within the peak funding of Rs 15,500 crore for the operation. He added that Telenor wants to address this problem (providing 3G service) at some point in time but that is currently…
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