Dude, where is my 3G service?

31 Dec

The biggest positive telecom story to come from India this year would have to be the successful auction of 3G spectrum, which netted the government a cool Rs 67,718.95 crores. However, of the seven private carriers that won spectrum in some circles, only two – Tata DoCoMo and RCom – have commercially launched 3G services. RCom has launched only in four cities – Mumbai, Delhi, Kolkata and Chandigarh. So far, 3G services have failed to impress, especially with the Indian government asking Tata DoCoMo and RCom to stop offering certain 3G services like video calling as it cannot be lawfully intercepted in realtime.

After bidding and winning 3G spectrum in 13 circles for Rs 12,295 crores, Bharti Airtel had promised to commercially launch its 3G services by the end of 2010. Today it is the last day of the year and still there is no sign of its 3G service. Earlier this month, Airtel’s Sanjay Kapoor had said that the company was ready to launch its services but was waiting for government clearance. Probably that could be one of the reason why Airtel is yet to launch its service despite running a television ad campaign for over a month advertising its 3G service!

In this regard, we believe that Vodafone had the best strategy when it announced that it will launch its 3G services only in the first quarter of 2011 and ensure that users get the best possible indoor 3G experience. On the other hand, others like Aircel and Idea are keeping their 3G cards very close to their heart, but we expect them to flip on their 3G switch in the same timeframe as Vodafone.

But we, as consumers, should be prepared to pay high 3G data tariffs. Unlike current 2.5G services where carriers face cut-throat competition and are forced to offer dirt cheap tariffs, carriers won’t have any compulsion when it comes to 3G services. First, these carriers have paid through their noses to acquire spectrum, which they will pass on to consumers. Second, carriers will ink 3G roaming agreements with each other to provide 3G services to their subscribers even in circles where they have not won 3G spectrum. Such deals are likely to kill competition.

In a nutshell, if you are hoping your carrier will offer you an all-you-can-eat 3G data plan for, say, sub-Rs 1,500, it ain’t gonna happen in 2011.

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