3 Cheers! 3G is almost here!

After the Left has left the government (a big thank you!) a lot of ‘right’ things seem to be happening! India moves forward on the N-deal and finally government announces the much awaited 3G policy. Few highlights,

• 3G and WiMAX spectrum auction will fetch around $5-7 billion (Rs 30,000-40,000 crore) for the exchequer.
• The auctioning of 5 3G licenses is expected to start by October 2008.
• Base price for pan-India 3G license would be Rs 2020 crore and for WiMAX Rs 505 crore (25% of 3G fee)
• The base price for Delhi, Mumbai and A-category circles would be Rs 160 crore. Delhi and Mumbai have 45.67 million mobile phone customers (of the total 288.86 million customers as of June 2008)
• The base price for Kolkata and B-category circles would be Rs 80 crore
• The base price for C-category circle would be Rs 30 crore.
• India has 5 category-A circles, 8 category-B circles and 6 category-C circles.
• Govt owned telcos, BSNL and MTNL allotted 3G spectrum with immediate effect but must match higest bid when auctions take place (looks very transparent!)
• New entrants will have to acquire a telecom license at Rs 1,651 crore, over and above the 3G spectrum bid price. This applies to players like AT&T, Verizon, Deutsche Telekom, NTT DoCoMo – who are very interested in entering the Indian mobile market.
• BSNL and MTNL to launch 3G by end of 2008, private telcos will be allowed to launch post mid-2009 (not fair)
• In first phase, up to 5 operators will be allowed in each telecom circle

Getting a bit technical (end user doesn’t care about the following figures!),

• 5 MHz will be allocated to each operator of 3G services based on GSM in the 2.1 GHz band (Bharti Airtel, Vodafone would fall in this category)
• CDMA operators (Reliance, Tata Indicom) will have an option to seek two blocks of 1.25 MHz in the 450 Mhz, 800 MHz and 1900 MHz bands

Experts are not sure how fast/soon Indian mobile users will patronize 3G as it took 8-10 years for customers in Europe to take 3G seriously. Europe has been always ahead in adopting advanced technology when compared to the US.

How does 3G effect end users?

Users need to pay an extra fee to use the 3G services, if the pricing is correct (and the economy is hot) I believe 3G will be a huge success in India in a shorter span of time than what people would expect.  Users need to buy 3G enabled phones to use 3G, price of such phones could be as high as Rs 6500 ($160) as compared to the current entry level phone of Rs 800 ($20). But then once India shows huge volumes in the consumption of 3G handsets the price will surely reduce drastically. Mobile handset vendors must be drooling by now looking at the 3G market size in India.

What would this mean to publishers in India?

• There will be a lot of demand for mobile broadband applications in India.
• You will see a lot more companies propping up, valuations going up!
• 3G allows high-speed internet surfing, gaming, faster movie and music downloads, video streaming and video calls on handsets.

Personally, to begin with I just want the mobile-surfing to improve drastically in India. Even with the current speeds I have seen decent growth for our mobile portal, oneindia.mobi. With higher speeds I am sure we will see excellent growth in our traffic. I don’t think I can watch a movie on my handset (and I don’t think it is advisable!).

Monetisation for Publishers

According to admob, they serve over 300 million ads per month on Indian mobi portals alone (second only to US!!!). This is a very encouraging number and with 3G I believe a lot more pages will be surfed on mobile handsets which should translate to more monies to mobi portals such as oneindia.mobi

WiMAX

While everyone is talking about 3G I think WiMAX has been somewhat overshadowed by 3G in the media. WiMAX is considered to be 10-30 times faster than 3G but do these two services actually compete with each other?

Update:

• 3G handset makers to ring in a Rs 3,500-4,000 offering
• 3G e-auction a first for India on this scale
• India 3G Spectrum Auction Guidelines