The Hindu Business Line : Operators eye more revenues from 3G services

New Delhi, Aug. 1 Third generation mobile policy couldn’t have come at a better time for cellular service providers. At a time when their average revenue per user is slipping to below Rs 250 and when most operators are faced with severe crunch in spectrum, 3G services is being looked at nothing less than the messiah for operators.

“It will take a while for operators to get returns but as volumes pick up they will be counting on 3G to lift their average revenue per user,” says Mr Prashant Singhal, head of telecoms practice, Ernst &Young.

Over the past two years, GSM-based operators have been reporting declining ARPUs, one of the indicators of their financial health. They have tried to bring in a number of new value added services to counter the declining tariffs for voice calls. However, with existing cellular technologies only so much was possible. With 3G technology operators are hoping to introduce high speed data services that will bring new services such as video on demand, mobile TV, video telephony and other entertainment related services. At speeds that are almost 10 times the existing technologies, 3G will provide a better user experience. “While consumers get more applications, wider coverage, unwired broadband it also will result in more revenues to the service providers,” said Mr P Balaji, Vice-President, Ericsson India.

Other than revenues, 3G will allow operators to enhance their capacities even for voice traffic. Operators are facing severe 2G spectrum crunch in top 20-30 cities due to which their future growth will be hampered. The Government has already indicated that it has limited spectrum left for 2G services. In this scenario if the operators want to sustain the current momentum of adding 6 million subscribers every month, the 5 Mhz spectrum being allocated for 3G services will be more than useful. While 3G is good for data services, it is also 3 times more efficient than existing technologies in terms of packing in subscribers.

“3G will help operators to better their quality of service. This is very efficient technology for both voice and data,” said Mr T V Ramachandran, Director General, COAI. The association has projected 75 million 3G subscribers by 2012.

However, some of the new players have expressed concern that 5 Mhz may not be sufficient for a standalone 3G operator to do both voice and data. “The policy is skewed in favour of existing players. On one hand Government is not giving any more 2G spectrum to new players and on the other hand only 5 Mhz is being given for 3G,” said a prospective bidder. New players will also have to cough out nearly Rs 4,000 crore to just qualify for the auction.

More Stories on : Telecommunications | Convergence

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page