4G may finally take off in India in 2014

Recent developments by India's telcos suggest they are beginning to focus more on bringing 4G wireless technology to the country, possibly by next year. However, the high upfront cost of deploying the next-generation wireless broadband tech and lack of cheap LTE-enabled mobile devices remain stumbling blocks.

Since the government allotted broadband wireless access (BWA) spectrum to telcos in mid-2010, only one operator--Bharti Airtel--had launched 4G services in the regions of Kolkata, Bengaluru and Pune.  

Over the last two months, though, there has been more traction in the 4G arena. Early April, for example, Mukesh Ambani's Reliance Jio Infocomm (RJI)--the telecom arm of Reliance Industries--inked a INR 120 billion (US$2.16 billion) deal with younger brother Anil Ambani's Reliance Communications (RCom) to deploy its 4G network using the latter's nationwide optical fiber network.

Since RJI was also awarded a pan-India BWA license, which means it has bandwidth in all 22 telecom circles in the country, the TD-LTE (time division long-term evolution) technology is expected to take off once RJI starts rolling out its 4G service.

Significantly, RJI officials have put a timeframe to the rollout of its 4G services. Tarun Jhunjhunwala, business head and state mentor (east) at RJI, said recently: "Our aim is to start 4G services in metros by the end of the first quarter of 2014."

In a phone interview with ZDNet, Rishi Tejpal, principal research analyst at Gartner, was more optimistic, saying: "4G will pick up this year."

Voice holds key to LTE adoption

In order to spur 4G adoption, voice services will play a key role in attracting consumer demand in India. Pratyush Dasgupta, vice president and wireless communications practice head at Aricent, told ZDNet in an e-mail: "Operators, especially the greenfield ones, will have to deploy VoLTE (voice over LTE) services to see mass adoption and proliferation of LTE."

According to K. G. Purushothaman, managing director at Protiviti Consulting, VoLTE will make international calls a lot cheaper too. "With VoLTE, triple play will become a reality in India," Purushothaman added.

Pradip Bhowmick, executive director at PricewaterhouseCoopers (PwC) India, said operators having a layered voice and data service model would benefit from incremental higher margin revenue. "Most of this revenue would accrue through value-added content services using hi-speed 4G kind of technologies," Bhowmick said in an e-mail.

For telcos to offer VoLTE, though, they will have to fork up even more licensing fees. On February 18, the Telecom Commission announced that holders of 4G LTE spectrum would be allowed to offer voice services if they pay an additional INR 16.6 billion (US$298.7 million) fee to the government for a universal services license.

Bharti Airtel is one telco committed to bring VoLTE services to Indian consumers. Jagbir Singh, CTO and director of network services group at the telco, said in February: "We have the advantage of a pan-India GSM and 3G networks. With the deployment of cutting-edge CSFB (circuit switched fallback) functionality, we will have the flexibility of using either or both the networks to support voice services on our TD-LTE standard platform."

Tejpal noted that offering VoLTE services will not be so easy for RJI though. The 2,300MHz spectrum obtained by 4G licensees is not suited for creating a large-area network, and to do so, RJI and other operators that do not have 2G or 3G networks to act as fallback will have to put an exponentially higher number of towers from the outset.

"Since voice is ubiquitous, you need continuous network," the analyst pointed out.

Reliance Jio is working around these challenges. According to an April report by The Hindu, the Department of Telecommunications (DoT) has allocated RJI 10,000 numbers to test its 4G services in Delhi, Mumbai and Jamnagar.  

RJI also informed the DoT it has developed a VoLTE technology that will allow users to get voice, messaging and video services with a single device. The technology allows RJI's 4G service to work seamlessly with existing 2G, 3G, national long distance and international long distance networks, it stated.

Need for cheaper LTE devices, innovative services

The Gartner analyst noted India will need at least 20 to 30 affordable devices for mass adoption of 4G LTE though. "The device ecosystem has to evolve. The percentage of people who can afford devices worth INR 25,000 to INR 30,000 (US$449 to US$539) is very low," he said.

Dasgupta did point out some device manufacturers have recently announced plans to launch moderately-priced LTE-enabled handsets. LG Electronics, for example, has said it will introduce its TD-LTE handset in India this year. "That's a good beginning," he stated.

The market readiness for 4G also depends on demand for bandwidth-intensive services, he said, adding India's mobile data growth trend is in line with other high-growth markets worldwide.

The recently-released Nokia Siemens Networks' MBit Index study, for instance, revealed a 92 percent increase in mobile data traffic generated by both 2G and 3G services in India between December 2011 and December 2012.

"Smartphones and tablets adoption in India is fast moving toward high-bandwidth-intensive applications and content," Dasgupta added. According to him, India will see quick uptake of LTE services in some areas such as metros, but slightly slower adoption in semi-urban and rural areas.

He also noted how 4G will solve bandwidth challenges required for offerings such as remote education and healthcare in rural and semi-urban areas.

Tejpal said 4G demand will depend on its use case too. "If 4G is seen as a supplementary technology for fixed broadband, then yes, that market is ready," he said.

Indian businesses are currently exploring adopting mobility services such as machine-to-machine (M2M) and mobile apps to improve workforce productivity and this will create demand for LTE, said Bhowmick.

"We see this theme playing out over the next few years in businesses having large mobile workforce. Adoption of next-generation technologies including LTE would come as a natural evolution based on respective business cases," he added.

Innovative schemes, affordable devices and consumer awareness hold key to faster uptake of 4G in India, Tejpal reiterated. "Operators need to launch innovative schemes for different set of consumers, such as students and farmers. You need innovative ideas, innovative business models and innovative applications for 4G to be the big game-changer in the Indian telecom industry," he said.

"4G will solve the bandwidth challenges required for offerings like remote education and remote healthcare in rural and semi urban areas," Dasgupta said.