Why 3G Expansion Is Critical For 4G’s Growth
Though the telcos might stop marketing 3G in favor of 4G to appeal to the younger crowd, there is no doubt that 3G will be working in the background to make 4G tick
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By all indications Indian service providers would be focusing on 4G in the coming year much to the detriment of 3G. Uncertainty looms large over the future of 3G in India even though the technology is just five years old in the country. The telcos had spent nearly $15 billion for their 3G license in 2010.
The initial response to 3G can at best be described as tepid. Patchy coverage coupled with high cost of devices ensured that the adoption never really picked up. Besides, the telcos marketed it as a premium service initially with high tariff leading to a slow uptake of the service.
The initial controversy surrounding 3G roaming didn’t really help. In fact it can be argued that 3G really started picking up only after the verdict was announced in the favor of service providers about two years back. The recent GSMA report highlights in spite of expanding coverage, only 11 per cent of the subscribers were on 3G in India.
The Generational Gap
2G, 3G and 4G refer to the wireless standards with 'G’ referring to the Generation of mobile network. While 2G is mostly used to transmit voice and basic data services like text messages, 3G enables data transmission as well and 4G is more about high speed data connectivity.
Now with Reliance Jio getting ready to launch 4G services by March 2016 and Airtel already having launched 4G services in nearly 300 towns and cities, what is the future of 3G in India? Vodafone India has also launched 4G services in Kochi and Idea Cellular plans to launch 4G by the end of the current financial year. What is probably more worrying is that Airtel is offering 4G at the tariff of 3G, thus cannibalizing its own 3G services.
Paradoxically, 3G will play a crucial role in the 4G ecosystem. 3G coupled with 4G will play an important and critical role in the mobile broadband revolution in the country. A key reason for this is that telcos, especially the incumbents would need a robust 3G infrastructure to continue to offer voice to their subscribers. Airtel, like other incumbents would be using Circuit Switched Fall Back (CSFB) technology to offer voice to their 4G subscribers. This means that they would need a robust 3G network to support 4G. CSFB is easier from 4G to 3G rather than from 4G to 2G. Besides, 3G would need to pitch in places with poor or no 4G service. So, there is little doubt that 3G would continue to remain relevant.
This is apparent from the telcos' focus on 3G network expansion and upgradation. For instance, Idea expanded 3G coverage from 2897 census towns at the end of Q2 FY15 to 3584 at the end of Q2FY16. The incumbents have also steadily added to the number of 3G cell sites. Airtel has increased 3G cell sites from 38,055 at the end of September 2014 to 62,447 at the end of September 2015 while Idea has increased the cell sites from 25,164 at the end of Q2 FY15 to 39,865 at the end of Q2 FY16. So, 3G expansion continues unabated even as the telcos get ready to launch 4G services in the country.
Though the telcos might stop marketing 3G in favor of 4G to appeal to the younger crowd, there is no doubt that 3G will be working in the background to make 4G tick.
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