3G Penetration Is One Of The Major Concerns For Indian Telecom Operators !

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In November 2010, Tata Teleservices began offering 3G service In India and later Bharti Airtel deploy the service in January 2011. It has been almost two years of the 3G launch and operators are still struggling to make its stronghold across the country. A mobile Industry tracking analyst—Wireless Intelligence—has reportedly stated that India’s 3G/WCDMA connections reached to 33 million figure till the end of the first quarter of 2012, though, it had less than 4% of total telecom subscribers base.

According to a survey, India was at the eight notch globally in terms of absolute number of 3G subscribers by the end Q4 of the last year. In terms of 3G penetration, India’s position was quite pathetic, it was ranked worst on list of top 30 countries–chosen on the basis of subscribers base. In the survey, emerging markets like China and Brazil had even better 3G penetration than India. Indonesia reported 11% 3G penetration, while South Africa and Philippines had 21% and 11% penetration respectively till the end of Q4 last year.

The Actual Active 3G Subscriber Base Is Just One-Third Of Total 3G Subscribers 


If you will consider the active 3G subscribers in India, then you will find out that the number the actual active subscriber base is quite low compare to the total 3G registered subscribers. It has been found that there’s a significant number of 3G provisioned users–they are treated as 3G users but they haven’t any 3G compatible devices. In India, just one-third of total 3G subscribers are the actual active subscribers; Just 10-12 million 3G subscribers across the country till the end of Q1 of this year.

As of Q1 2012, Airtel had around 8.6 million provisioned 3G subscriber base, while it had just around 2.6 million actual active subscriber base —a 30% of provisioned 3G subscriber base. Likewise, Vodafone had just 1.3 million active users out of 6.7 million total 3G subscriber base, while Reliance estimated to have 3.2 million active 3G user base, followed by Idea with 2.6 million active 3G subscribers.

The patchy 3G service and expensive tariffs are two major concerns for poor 3G adoption in India. In India, majority of users are still using their mobile handsets for conventional voice calls and that’s why, 90% of revenue is being generated by voice services, while remaining 10% of revenue is being generated from the data services including SMS and internet access. In the country, there’s stranglehold of 2G service rather than 3G.

Somehow expensive 3G biding is also responsible for the pathetic 3G penetration in India; operators had to pay around Rs 70,000 crore in 3G biding and also invested over 10,000 crore on infrastructures. Of course, operators will try to recover such investments from its 3G services. However, some of the operators including Airtel, Reliance, Idea and more endeavored to entice a considerable number of subscribers by reducing 70% tariffs in the first quarter of this year.

Rising Opportunities In 3G Segment


Positive aspects of discussion is; As number of smartphone and Tablets are increasing in the country, it’s boding a good upshot for telcos. Definitely, if number of internet enabled mobile devices will increase, then it will boost mobile data consumption. Of course, operators will have opportunities to generate revenue from data services.

Just a month before, I explained that mobile data consumption (2G and 3G combined) mounted up by 54% in India during 7 months period ended June 2012.  During the seven months average period, 3G reported 78% growth against 47% of 2G growth; Thanks to tariffs dropped by telcos. As of June 2012, an average 3G data consumption per users doubled compare to the same month of the last year. At present, 14% of 3G data is driven by uploading audio, video and picture on social networking sites including Facebook and YouTube.

3G penetration in Indian metros (10-12%) is quite higher than other parts of the country, while its admittance in the rural sector is quite poor. At present, Indian telcos don’t have much capital to further outlay on 3G infrastructure. Anyway, lower 3G tariffs and increasing number of smartphone could drive 3G growth across the country.



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