As India bids for 3G, China gives it the thumbs down
April 8, 2010

Two years after China Mobile and China Unicom launched the ultra high-speed, domestically built third generation mobile networks, Indian mobile operators will unleash the 3G spectrum in the world’s fastest growing telecom market.

The much awaited 3G spectrum which was freed from Indian army bandwidth will be bid for on Friday and deployed on users handsets on a commercial basis from 1 September, 2010.

The much sought after spectrum is expected to attract nearly US$8bn (£5.2bn), a welcome cash injection for India’s stalwart industry. The auction which will be conducted by the Government of India, will have nine telecom firms competing for four national and 22 regional licences. Out of these, six applicants – Bharti Airtel, Reliance Communications, Vodafone Essar, Tata Teleservices, Idea Cellular and Aircel – are bidding for all-India spectrum. Other firms such as Videocon Telecommunications, S Tel and Etisalat will be bidding for regional licenses.

While the arrival of 3G is expected to revolutionize the telecom industry by adding a bevy of new services and revenue channels such as mobile banking, video conferencing, social networking etc, its adaptability is being questioned by analysts that have seen its failure in numerous global markets.

India, like China is a price sensitive nation. 3G services will come at a premium, and while both nations have large subscriber numbers, absorption into the market will be critical. In addition to buying new phones that are 3G compatible, users will only be able to utilize all the features of a 3G network with other 3G users, thereby reducing its absorption value.

As a result, China hasn’t adopted 3G wholeheartedly. China which launched its own home-grown version of 3G or TD-SCDMA with three domestic mobile operators, including China Mobile, just before the Olympics, says its 3G user base stood at 16 million users, or just 1.5 percent of the nation’s total subscriber base in February this year.

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