3G & the high speed downfall of the Telco’s


3 G spectrum has been over-sold . Keeping in mind the fact that,  the average yearly penetration of 3 G users has been highest at 5 % in developed countries like Japan. It took them 7 years to increase the penetration of 3G services to 35 %. India is a country with 150- 220 million middle income people , and not everyone requires 3G !!

In India , do we need high speed internet in our daily lives ? We are pretty okay with Blackberry,  emails and voice calls- Just 70 million internet users !!

Industry has perhaps gone overboard to pay “Obnoxious” sums for 3G spectrum.

To ensure profitability , 3G players will have to invade few sectors to make it viable ( trust me , it is a big challenge for immediate future  ). The sectors that need to be invaded are HEART ( Healthcare , Education & Entertainment , Agriculture ,  Rural India & Travel & Tourism , Telemedicine )

People have wrongly understood the first wave of telecom revolution . The first wave came because of the following

  1. Before the cell phones were launched , getting a land line from the government “monopoly” ( BSNL /MTNL ) was difficult – wait times was uncertain & services pathetic even after bribing the lineman the things would not work !
  2. ‘Rich’ people could afford the luxury of a ‘Cordless’ phone, that would have a coverage of 10 or 20 Feet . Suddenly , with a cell phone , people could roam with a phone across India or the world !! I think people in the telecom sector have believed that the craze for 3G would be the same as the first wave for cell phones !! But believe me , it will never happen . I have used cell phone since 1996 , when it was launched and paid an “Airtime’ of Rs.16.40 per minute + normal call rates !!
  3. The actual number of cell phone users are still as per what i call  the 1/3rd Rule ( we just have approximately 200 million cell phone users and not 654 Million, what the Telco’s & the government talk about  )
  4. Handsets to use the features of the 3G are not evolved as yet

Overall, paying and bidding for 3G was a lot easier than to manage the profits out of the networks using 3G. This will leave only two players doing something worthwhile ( Vodafone & “may be” , Mukesh Ambani ). Rest will have to work hard to avoid “Consolidation” of the industry

May be , some players will use 3G airwaves to enhance the voice quality

MNP ( Mobile number portability ) : MNP was delayed for obvious reasons !! But once the system is operational, it will crash due to the overload of the people applying for the same . There is a lot of anger amongst users for poor service quality . People will change the provider not for better service but to vent out anger at the existing service provider.  Some Telco’s will lose millions of users in months ( who gains in the long run is going to be a billion dollar question )  Time to wake up and take corrective action,  and innovate the services !!

Two big challenges 3G & MNP – Head ache of CEO’s of all Telco’s

3G might become the high speed to downfall – Thanks to the myopic government policies and over excitement of the bidders. May be , that’s the reason why MNC’s stayed out of the bidding. Perhaps, they will wait for some companies to bleed, and then, buy them out

Rajendra Pratap Gupta

Email : office@rajendragupta.in

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One comment

  1. Anil Gupta

    “What is this 3G”.
    Heard from the “Authority” who was to sanction prosecution of Raja over 2G.
    ” I know only about 2 Gs,
    Sonia G & Rahul G”

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