For most foreign investors around 1994, a first glance at India’s Telecommunications Policy seemed to assuage concerns. In our naiveté, we hoped that this Policy would put India at least on a par with China, where a stifling regime ruled telecommunications. However, a disastrous implementation ensured that India languished behind its neighbor in teledensity, cellular usage and broadband coverage.
Fortunately, later developments like the Unified Licensing Scheme, while a reactionary response to events threatening to overwhelm TRAI (the Regulator), see India’s deregulation moving forward even in places like Hong Kong where a deregulation is barely being discussed. unified scenario. Despite the merits of particular aspects of deregulation, the foreign investor expects to see a clear roadmap forward if the increase in permitted FDI to 74% is of any significance. The recent imbroglio over the future of the 1900MHz band is an excellent opportunity for TRAI to use the controversy to draw just that map.
Of equal concern to the foreign investor, and something operators on both sides of the GSM-CDMA divide agree on, is the disappearance of high-margin demand. The future holds a long way uphill for every rupee that ARPU (average revenue per user) increases. What makes it more interesting is the futility of previously successful product and marketing strategies in current margin conditions. Also, when one last looked, the government had its hand in the box for an incredible 22-25% of revenue in the form of license fees, revenue sharing, and a second license fee through a fake.” spectrum usage fee. Add in the Access Deficit Charge (ADC) bailout paid to incumbent operator BSNL and some investors can’t be blamed for putting their calculators aside and heading out the door.
With cellular pickup rates at abysmal levels thanks to pseudo-WLL/CDMA deployments, cellular operators are fearful of additional infrastructure investments. However, innovative value-added services are one of the few ways to lift ARPUs out of their funk, they must invest. How cleverly they do it, they decide their fate.
The 2003-04 EDGE (Enhanced Data for GSM Evolution) deployment by some GSM operators is the kind of response one would expect to see. By cost-effectively providing three times the data capacity of GPRS, EDGE gives operators like Bharti, Hutch and IDEA the delivery system to offer innovative infotainment-based services as well as venture economically into rural areas. Using the same TDMA (time division multiple access) framework structure as GSM, EDGE allows existing cell plans to remain intact. On the other hand, it uses a new modulation scheme that is also used for UMTS/3G. This makes it something of a halfway house towards 3G, for those who are still brave enough to contemplate that option. However, while EDGE was a smart move, the jury is still out on 3G.
Emulating European cellular operators whose track records believe in such faith, some Indian cellular operators have, however, begun to chart transition paths toward that Holy Grail. Even if the collection rates in India were not as low as they are, the rollout of 3G could be an imminent disaster. So it was encouraging when India’s IT Minister stated last year that India is aiming to make the leap to fourth-generation wireless, skipping 3G, as it has not been found to be cost-effective. This is one of the rare occasions when the industry benefits from listening to its Minister.
However, these are mother words until the Hon’ble Minister releases VOIP (Voice over IP) for the first time. Unless the chastity belt around VOIP networks is discarded and allowed to blend in with the PSTN, India will be entangled in 4G, within which, by the way, the dominant issue is IP. Living outside of India, one generally lags behind the unfolding events, but to my knowledge, even today, VOIP – PSTN interconnection is still incredibly illegal.
One beneficial outcome of the 1996 bidding fiasco for regional circles has been a general reluctance to consider further bidding, even for 3G. This saved the Indian operators from the fate of their European counterparts. While Europe’s 3G license fees did nothing to ensure a future for the technology, emerging OFDMA (WiFi/WiMax MMDS) alternatives may very well deliver the coup de grace. Whatever the arguments against it, the fact that 3G services in the UK still resort to rush sales of basic voice services to gain a customer base speaks volumes.
Unlike EDGE, moving to 3G doesn’t just involve software upgrades, and the math gets orders of magnitude more daunting. For starters, the air interface/frame structure (WCDMA vs. TDMA) is totally different. This means changes at every cell site in the network. And then, of course, there are all the necessary means to interoperate with the existing 2G elements of the network.
However, there is an alternative that until recently did not dare to pronounce its name for fear of the establishment of telecommunications.
Contrary to the negative press coming from much of the big cellular operators, it is possible to co-opt wireless LANs (WLANs) in an ecosystem with cellular networks. An EDGE-enabled cellular network connected to WLANs (WiFi/WiMax) in high-density locations could enable Indian operators to deliver high-speed data services with laser precision exactly where it is needed and at a much lower cost than 3G in a similar area. I trust this is similar to what the IT Minister has in mind. In addition, such a mesh network could provide indoor voice connectivity via cell phones in broadband-enabled locations with poor cell reception.
An interesting twist comes from the recent stealthy deployment of WiMax in Japan by Vodafone and elsewhere by other prominent 3G operators, demonstrating the position taken in this paper.
The cell operator may have to offer different landline/broadband type rate structures in these locations, raising fears that they would hurt cell phone revenue, but one has to wonder how much of the traffic generated that would account for. cannibalized revenue and how much it would generate incremental dollars from traffic currently going either way over fixed/wireless broadband and through the different flavors of Voice over Broadband (VoB) services being used more and more precisely from those locations .
No one all OFDMA air interfaces as an alternative to WCDMA/3G. It is the integration of the two technologies that creates a potentially winning alternative, especially in the Indian context. Integration of selected WLAN access points into a cellular network requires an IP Network Controller (INC), an IP access network, a patch to allow the WLAN access network to broadcast the relevant accounting information to the AAA cellular server ( authentication, authorization and accounting). and an investment in IP roaming. Except for a few more widgets, that’s essentially it.
Given the relative simplicity of this solution, anyone who has watched engineers worry about deploying cell sites in congested locations must wonder why carriers haven’t embraced WLAN to increase cellular coverage on the cheap.
Cost aside, there is an interesting aspect of 3G technology that could force operators to consider OFDMA-based options to augment cellular data delivery systems. It may not be common knowledge, but 3G differs from 2G (GSM) in one important aspect: the interdependence of network quality. In 2G, high traffic at a location tends to introduce poor quality only to the particular cell that covers that location. However, in 3G, poor quality also affects surrounding cells because the size of a cell can vary depending on the traffic load it carries. Called “cellular breathing”, this is due to the interdependence between capacity and coverage over WCDMA air interfaces and could end up affecting voice quality.
However, no service provider will compromise the quality and capacity of voice for the sake of data. This implies that there are merits to a separate data-centric network. And if such options are available at least in the peripheries, at substantially lower costs than the vaunted 3G and if these options seem destined to become the bulwark of future 4G data delivery mechanisms, then surely it falls to the Indian cellular operator. not adopting the same blink at the thought that that is the hallmark of its European counterpart and seriously considering a solution based on GSM/EDGE-WLAN.
It is puzzling why, rather than prevaricate, European and US cellular companies have not swept in and massively hijacked wireless access for IP traffic from fragmented but potentially formidable WLAN and Voice over Broadband (VoB) players. After all, at least for now the cellular operator holds all the cards. Only he can decide if the customer receives a combined cellular + WLAN bill. This gives your bundled cellular WLAN service a huge advantage over any other fixed/wireless or Vonage-style broadband VoB offering. By now, cellular operators could have usurped large chunks of IP traffic and decimated new VoB players before they took hold. Alternatively, just a declaration of intent could send WLAN and VoB players rushing to negotiate interconnection and revenue-sharing deals on terms that could only be favorable to the cellular operator.
It is too obvious a scenario and one does not expect such myopia to last. T-Mobile’s extensive WiFi rollout in the US and Europe apparently has that end goal in mind. And so it was, we hope, the intention of the Hon’ble IT Minister, when he took on 3G.
