“Historically any new technology brings with itself a tariff war between the telecos. This is due to the cut throat competition in India telecom sector. However among all this, customer emerges as the real winner,” said Tarun Pathak, Sr. Telecom Analyst at Counterpoint in an exclusive interview with TechObserver.in.
What is your view of 4G in India?
4G ecosystem is still in its nascent stage in India. Although the bids for the 4G spectrum dated back to 2010 but the trial and commencement of services started only few years ago that only by couple of operators in few selected areas. One of the primary reasons was the slow uptake of 3G services in India and cancellation of 2G licenses which pushed back the overall telecommunication scenario in India by few years.
Will the large scale roll-out of 4G help government digital push?
The large scale roll out of 4G can help in digital push but we have to understand the roll out and uptakes of services are two different things. We can have a PAN India roll out but for 4G services to take off we need a complete ecosystem which primarily includes coverage, devices availability and pricing of the services.
Recently operators have paid huge money for auction, will that put pressure on telcos capex spending, turning the roll-out to be little slow?
Yes it will put pressure on the telecos spending .But having said that telecos need to innovate and capitalise the massive growth of data consumption over few years. More and more people will access internet over the phones which at the same time presents a huge opportunity for telecos to grab.
How ready is the eco-system for 4G in India? What are the major challenges and concerns?
As of now the ecosystem is quite nascent. The coverage and subscribers are way too low. But surprisingly we have already a mature devices ecosystem .Now one can buy a 4G devices as low as $120. Close to 40 different smartphones have been launched by more than 10 vendors.
As far as challenges are concerned we believe that it will take another 2-3 years for 4G to penetrate deeply in India. We still don't have a ubiquitous and seamless 3G coverage in India.4G coverage and pricing will be some of challenges which telecos might face when the take the 4G services beyond metros
How 4G is likely to impact the tariff disparity between local and long distance on PAN India basis?
Historically any new technology brings with itself a tariff war between the telecos. This is due to the cut throat competition in India telecom sector. However among all this, customer emerges as the real winner.
It is bit early to comment on the disparity as of now as we have yet to see the entry of the biggest 4G operator in India yet who have the potential to disrupt the market.
To promote data access in rural areas which will be huge play-game for 4G operators, the operators will have to work around cheaper data plans. Do you agree with it or will there be some other model?
There are various models which can be deployed .While cheaper data plans no doubt pushes customers to explore more and use more data but at the same time if we develop some innovative data use cases within videos, vernacular apps, entertainment, social networking , e-governance etc we can make users to engage more across various segments which will derive usage too.
In your opinion how the roll-out of the 4G LTE service changes the market dynamics because of its ability to immensely improve quality of VoIP and Video on mobile?
4G will bring with itself a differentiated experience which was not quite evident when industry shifted from 2G to 3G due to poor uptake of 3G services.So there are plethora of opportunities which can be explored with the super fast 4G services.However seamless network availability will be critical to its experience.
3G faced problem such as high tariff, limited foot print and immature device eco-system. In that light, what sort of apprehensions do you see around 4G in relation to demand and ROI?
Compared to 3G era, user behavior, characteristics and market fundamentals are quite different now. The smartphone penetration is close to 30% of the unique user base, Internet users are growing. Keeping all this in account we believe that the rate of 4G adoption will be comparatively faster as compared to 3G but the widespread penetration of 4G will take quite a time and we are still good 18-24 months away from that time.
What would be the growth projection for 4G market and technology in India?
Its too early to comment on any type of projections. However the strategy of RJip will be interesting to watch out for.