3G in India to be a privilege for the rich

3G in India to be a privilege for the rich

Summary: While many developed nations are planning 4G roll out, India is yet to see full fledged 3G across the nation. When 3G comes it will be pricey.

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TOPICS: Mobility, Hardware, Wi-Fi
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While many developed nations are planning 4G roll out, India is yet to see full fledged 3G across the nation. After much delay the government finally pulled off what is widely regarded as an open and transparent auction for the 3G spectrum. The auction was a pricy affair, the government made a staggering Rs 67,718.95 crore which is close to $15 billion.

Given the amount of money involved it was evident that while the government will rake in quite a handsome amount for its various national activities, the telcos will be recovering this investment from the customers.

Sunil Mittal, head of Bharti Airtel, a company that spent Rs. 12,295 crores for spectrum in 13 circles which include Mumbai and Delhi, acknowledged this predicament. According to Mittal, to recover their investment (in Mumbai and Delhi) the company would have to charge somewhere close to Rs. 800 to 900 per month for a 3G connection, presumably with outrageous data caps much like GPRS, data cards and broadband. To put this in some perspective, an unlimited* broadband connection (from Airtel) with variable 512kbps-1Mbps speeds costs Rs. 1,250/- a month.

Other service providers will have a similar cost structure and the chances of a price war to the bottom is highly unlikely since any such move would result in huge losses for the companies. A cartel perhaps? That would be too strong a word since the economics of 3G are complex.

The Indian mobile market is probably one of the fastest growing and this is due to the competitive and aggressive pricing by the handset manufacturers and carriers. This however, wasn’t the case a few years ago where cell phones were affordable but people used give “missed calls”. (Unlike the United States, operators here don’t dictate terms, the consumer does. Of course this doesn’t mean we have great service.) The same is expected to be the case with 3G, initially the service will be for the rich till that one operator comes along and slashes prices for everyone to follow suit. I await that day.

Both, content creators and advertisers are hoping to provide a rich experience to the consumer. Given the widespread use of smart phones, a lot of hopes are riding on 3G services.

*Subject to Fair Use Policy

Topics: Mobility, Hardware, Wi-Fi

Manan Kakkar

About Manan Kakkar

Telecommunication engineer with a keen interest in end-user technology and a News junkie, I share my thoughts while preparing for my Master's in Information Management.

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9 comments
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  • I would pay

    Convert the money in Dollars and it doesn't seem off the mark. Govt should sincerely champion wired internet connection rebates. The wireless market should pay the premium to fuel the internet 'revolution' in India.

    Facebook has already opened up the market for mobile users, no dearth of premium users.
    gibreel
    • RE: 3G in India to be a privilege for the rich

      @gibreel I think it would be wrong to simply see it in terms of how many dollars you'd be paying without considering the purchasing power parity<br><br>However, seeing as that 3G handsets still haven't quite penetrated the Indian markets to a great extent, I think that the owners of 3G handsets can afford to pay the premium. I certainly would.
      s1m55r
  • RE: 3G in India to be a privilege for the rich

    I was crazy to buy a 3G ready handset! 3G service seems to be out of my budget :( The prices are much higher than I expected.
    rohstein
  • RE: 3G in India to be a privilege for the rich

    What the? Is there anything worthwhile to read in this article? Why ZDNet publishes such shit?
    Renker
    • RE: 3G in India to be a privilege for the rich

      @Renker ... Yes... If you live in India. Although the prices listed ($20-$30 USD/month) seem reasonable for someone in the US or Europe, that is a substantial portion of a month's wages for even upper-middle class Indians.
      Rick@...
  • RE: 3G in India to be a privilege for the rich

    My problem is that the Indian Govt. was never about its people. All sorts of vested interested dictated what Govt. policies should be. Example the spectrum auctions. Every one of these auctions were mired in all sort of unseemly controversies with accusations of corruption flying high and low. Also please note that the Govt. of India makes a killing on the auction without in the least bit considering the fact that this would result in keep the facility out of the hands of most Indians, due the high recovery costs of for the service provider. Is it right for a Govt. to profit?
    kmashraf
  • RE: 3G in India to be a privilege for the rich

    My problem is that the Indian Govt. was never about its people. All sorts of vested interested dictated what Govt. policies should be. Example the spectrum auctions. Every one of these auctions were mired in all sorts of unseemly controversies with accusations of corruption flying high and low. Also please note that the Govt. of India makes a killing on the auction without in the least bit considering the fact that this would result in keeping the facility out of the hands of most Indians, due the high recovery costs for the service provider. Is it right for a Govt. to profit?
    kmashraf
  • Its good to know that zdnet now has a blog dedicated to Indian IT

    :)
    samunplugged
    • Agreed

      @samunplugged

      My colleagues and superiors are mainly in India (some in Philippines), so it's nice to read some things about Indian IT for me also. :)
      Daniel Breslauer