The document discusses the role of 3G networks in India. It notes that 3G networks will provide high-speed internet connectivity and new multimedia services. This will help address capacity issues on 2G networks and facilitate the rollout of affordable mobile broadband, especially in rural areas of India. 3G can stimulate economic growth and productivity increases. However, for 3G to be successful in rural India, issues like high spectrum prices, ROW charges, and availability of regional content need to be addressed. The mobile industry and government should work together to promote policies that enable affordable access to networks and services for rural populations.

1. 16 September 2009
Role of 3G in India
T R Dua
Deputy Director General,
COAI
1

2. CONTENTS
 Indian Mobile Industry
 3G- Ideal Solution for India
- 3G Services
- Economic Benefits
- Market Drivers
 Mobile Broadband for Rural India
- Potential Applications
 Making 3G Successful in Rural India
- COAI Views
- Affordable Access to Rural Areas
 HSPA & WiMAX
- HSPA Advantages
- HSPA Specific Cases
- WiMAX Characteristics
 Conclusion 2

3. INDIAN MOBILE INDUSTRY
3

4. THE INDIAN MOBILE MAGIC
“The transformation in telecommunications has accomplished what
our socialist policies couldn't — empower the less fortunate”.
…… Shashi Tharoor
.
Mobile has permeated almost every segment of the
everyday life of citizens 4

5. INDIAN MOBILE – CURRENT STATUS
 157 operational networks
 Investments around Rs. 150,000 crores
 Mobile subscriber base of > 460 million,
- Growing @ 10-12 million + every month
 Lowest Mobile tariffs and one of the lowest ARPU (Average revenue Per
User) in the world.
 Highest MoU (Minutes of Use) globally
 Rural subscriber base served by private GSM operators > 95 million by
July 2009,
- Growing @ around 3-4 million every month, i.e. nearly 50% of the GSM
subscriber adds are from the rural areas
Indian Mobile : Sustained Stupendous Growth
5

6. WORLD’S 2nd LARGEST WIRELESS
MARKET
450
415
400
350
347
300
Subs in mn
250
234
200
150 150
100 76
48
50 28
11
0
2002 2003 2004 2005 2006 2007 2008 Jun'09
Year ended December
Highest subscriber additions globally !!
Records tumbling month after month…
6

7. THE IMPACT OF MOBILE PHONES IN INDIA
- ICRIER RESEARCH FINDINGS
 Telecommunications is a critical building block for the country’s
economic development.
 Access to communications needs to be seen as a foundation
on which other initiatives can be built.
 In under served areas, mobile phones can help to widen
markets, create better information flows, lower transaction
costs and substitute for costly physical transport
 Small and medium sized enterprises (SMEs) and urban slums
gain maximum benefits in enhancing their businesses
through the use of mobile services.
Amidst the spreading gloom of the economic downturn following the
global financial meltdown, the Indian telecom sector provides the
proverbial silver lining…………….”Dr. Rajiv Kumar, Director, ICRIER
7

8. THE IMPACT OF MOBILE PHONES IN INDIA
- ICRIER RESEARCH FINDINGS
 Information via mobile, such as weather reports and market
prices, has begun to have an impact on productivity for the
agricultural sector.
 Real benefits of telecommunications only start when a region
passes a threshold penetration rate of about 25%. Many
areas have still not attained that level, which indicates the
importance of increasing teledensity as soon as possible.
 Indian states with higher mobile penetration can be expected to
grow faster, and by 1.2% points for every 10% increase in
mobile penetration rate.
These benefits are from 2G, with 3G – expected to
increase several fold
8

9. 3G- THE IDEAL SOLUTION FOR INDIA
 Will serve as an ideal platform to deliver low cost voice telephony to
Indian consumers
 Extremely effective tool in driving penetration to the huge addressable
market in the rural areas.
 Increased economic opportunity through tele-education, tele-
medicine, e-governance, etc.
 Facilitate achievement of Government’s objectives on broadband
 Cater to the demand for Hi-Speed data services in the urban markets
 Will ease spectrum constraints on 2G networks & accommodate
subscriber growth.
9

10. BROADBAND STORY SO FAR
Growth in Broadband Subscribers (in mn)
8
6.8
7 6.22
6
5
3.9
4
3 2.34
2 1.31
1 0.2
0
Mar' 05 Mar' 06 Mar' 07 Mar' 08 Mar'09 July'09
Source - TRAI
FOR BROADBAND- MOBILE IS THE ANSWER
10

11. GLOBAL TOP TEN MOBILE BROADBAND MARKETS
Q3’08
The scenario to change
significantly in the
coming years.
India and China
combined share to reach
20% of the global mobile
broadband Subs by the
end of 2013.
THE FUTURE OF BROADBAND IS IN THE EMERGING
MARKETS
Source: Informa Telecom & media estimate,2009
11

12. MOBILE BROADBAND FOR RURAL INDIA
 In rural India, fixed line broadband connectivity is very low;
 Many will probably first experience broadband on mobile handsets
 3G will bring in much needed broadband connectivity for rural India.
Internet Broadband Wireless internet thru mobile
140
 Key success factors for Mobile 120
117.8
Broadband 101.1
Subs in Millions
100 88.3
 Wide spread reach of
80 76
mobile
60
 Affordable access to PCs
40
11.7
20 12.2 12.9 13.5
4.4 4.9 5.5 6.2
0
June'08 Sept'08 Dec'08 Mar'09
IN RURAL INDIA, WHEN YOU THINK BROADBAND,
THINK MOBILE BROADBAND
Source: TRAI 12

13. 3G SERVICES
 High speed internet connectivity
 Faster video/data downloads
 New services like video telephony, video on demand, mobile TV &
other entertainment related services
 Rich Multi-media services with streaming audio and video like video
conferencing
 Online Gaming with more bandwidth, security, and reliability
 Location based services
 Personalized services, where content can be pushed to users
VOICE was killer app on 2G
CHOICE would be killer app on 3G
13

14. 3G WILL THUS STIMULATE ECONOMIC ACTIVITY
 Immediate value creation - GDP contribution from direct network investments
 Multiplier effect - On suppliers of equipment, content, etc
 Foreign Direct investments - as a result of good ICT infrastructure
 Productivity increases - More efficient business processes
 Human capital formation - Increase in knowledge and skills as well as
improved health services
Productivity gains to multiply with increased delivery of
data services; upto 1.4% points for every 10% increase
in mobile broadband*
* Source - McKinsey
14

15. MARKET DRIVERS FOR 3G IN INDIA
 Address capacity problems in 2G networks
For voice services in Spectrum limited situation
Better end-user experience in terms of voice and data
 Cost efficient mechanism for Mobile Broadband
Optimized investment for affordable service
Broadband where ever there is mobile – reach
Would give significant impetus to overall internet penetration
 3G – The big technology leap for Rural India
Facilitate to meet USO services requirements
Future proof investment in rural India
Can be turned in to mass market service without wastage of investment
Development of Regional Content
 Augment GSM Infrastructure for WCDMA – low deployment cost
 Availability of WCDMA handsets at reasonable price
15

16. MOBILE BROADBAND FOR RURAL INDIA
16

17. GROWTH IN RURAL MOBILE CONNECTIVITY
120 Pvt GSM rural subs (in mn)
100 91 95
87
76 80
80 69 72
60
40
20
0
Jan'09 Feb'09 Mar'09 Apr'09 May'09 Jun'09 Jul'09
 > 50% of the new connections now outside urban areas…
 95 mn rural subscribers as of July’09 served by Pvt GSM
– Addition of >3 mn per month
In future, maximum growth to come from Rural areas
17

18. POTENTIAL APPLICATIONS
 Telemedicine
 Overcome the lack of doctors in rural areas.
 Remove language barriers through Multi-
lingual interfaces.
 Bridge lack of visual examination through
video capability.
 Enable prescription service through
document transfer.
 Connectivity to super specialty hospitals & Healthcare
medical institutions
 Education
 Provide high bandwidth access for e-
education courses.
 Provide video based Computer Based
Trainings (CBTs).
 Extensive use of web casting/ multi casting
to educational institutions
Education
18

19. POTENTIAL APPLICATIONS
 Governance
 Provide government information like policies,
forms, schemes.
 Enhanced public services efficiency in areas
like municipality, state electricity board,
railways etc.
 Better transparency
Governance
 Agriculture
 Dissemination of agricultural information to
the farmers; whether report, info on seeds
etc.
 Information on Market prices
 Easier transaction through direct relationship
with buyers.
 Commodity information portal
Agricultural News
& Information 19

20. POTENTIAL APPLICATIONS
 E-commerce
 E-Procurement for Wholesale (Mandi) and
Retail
 E-Banking
 E-transactions for supply chain & payment
 Entertainment E Commerce
 Regional content
- Audio & Video Downloads
 Mobile TV
- News etc.
Entertainment
With mobile broadband, these services will become richer
and even more effective
20

21. MOBILE BANKING FOR RURAL INDIA
 85% of rural India is unbanked
 Cost of funds – biggest deterrent for banks to move to rural areas
Current Scenario Banking Future
• Branch – $ 1.1- $ 1.3
BANK
• ATM – $ 0.4
• Call Centre – $ 0.3
• Cheque – $ 0.02 TELCO Infrastructure
• Internet – $ 0.08
+
Secure Mobile Matchbox
Technology Distribution
 Mobile to provide affordable
banking solution Low cost
Banking
Services
Mobile Banking essential for Financial Inclusion
21

22. MAKING 3G SUCCESSFUL IN RURAL INDIA
22

23. COAI VIEWS
 Subsidizing in rural areas
 power supply / diesel
 non-conventional energy sources
 Improved utilization of USO Funds through innovative new forms of
support for Rural connectivity.
 Nominal & Transparent Right of Way (ROW) charges
 Reduction of the burden of multiple levies and duties on the sector
 It consists of-
 Annual spectrum charges
 License fee
 USO levy
 Octroi etc.
 These charges needs to be rationalized.
The total of all the above levies on telecom industry works out to
approx. 30 percent of their total revenues
23

24. COAI VIEWS
Spectrum Requirement
 Already spectrum in 900 MHz, 1800 MHz is much fragmented.
 Limited spectrum available in 2.1 GHz for 3G.
 Issues still needs to be resolved in 2.5-2.6 GHz band.
India needs to consider new frequency bands (like 700 MHz)
for the future growth of mobile/ mobile broadband services.
24

25. COAI VIEWS
Spectrum Requirement
 700 MHz (698-806 MHz) band best suited for HSPA/ LTE
applications.
 This band especially relevant for India, as majority of future growth
expected from rural India.
 Because of its excellent signal propagation characteristics, less
infrastructure is required to provide wider coverage
 Communication services can be provided in rural areas at lower
cost (savings in Capex)
 Will help to bridge the ‘digital divide’ in India
 Provide affordable mobile broadband to help develop a
knowledge based economy.
India needs to take a lead position in allocating this band
to drive economies of scale
25

26. Why 698-862 MHz band critical?
 It is approximately 70% cheaper to provide mobile broadband coverage at
frequencies (approx. 800MHz) than over 2100MHz
 This means networks can be rolled out quickly, cost effectively, bringing cheaper
services to consumers
Number of base stations
14 X12
12 2 5 7 10 15 20
10
X7
8
X5
6
X3
4 X1.5
X1
2
0
700 850 2100 2600 3500 5800MHz
Capex Multiple
UHF Band
Source: SCF Associates Study
26

27. COAI VIEWS
Affordability of Mobile Broadband
 Reserve Price of 5MHz 3G spectrum set @ Rs. 3500 crores, 20MHz of
WiMAX (BWA) spectrum set @ Rs. 1750 crores
 Reserve Price of Rs. 3500 crores for 3G spectrum is very high– will
affect business case – resulting in lower participation & making for
less robust auction result
 3G best placed technology to deliver on the Government’s mobile
broadband objectives
 High auction prices will impact the affordability of 3G and could
completely derail the mobile broadband revolution for India
Reserve price should be set at a level,
to provide affordable broadband services
27

28. COAI VIEWS
Regional Content – A Priority
 70% of India resides in the rural areas – language used to
converse, transact & interact is the local language
 There are 22 official languages in India
 Applications useful to the local population will have to be developed to
revitalize the rural economy by creating rural micro enterprises
 These micro enterprises could be in the areas of agriculture, food processing
industry, animal husbandry, fisheries, sericulture, handicrafts, etc.
 With the availability of local language services and localized applications /
content, the rural consumers will be far better equipped to accept and
migrate to a mobile information society
Service providers have already taken major initiatives and
significant progress has been made in this direction.
28

29. AFFORDABLE ACCESS FOR RURAL AREAS
 Initiatives by industry to reach rural masses:
– Lifetime prepaid
– Micro prepaid cards
– Innovative tariff plans, especially for rural areas
– Low cost handsets
Rural connectivity highest priority for Government
as well as Operators
29
29

30. AFFORDABLE ACCESS FOR RURAL AREAS
 Initiatives by Government to reach rural masses:
– USO Support for towers
• 1st Phase: ~ 7,871 towers in 500 districts spread over 27
states for provision of mobile services in specified rural and
remote areas, where there was no existing fixed wireless or
mobile coverage
• 2nd phase of USO initiated, broadband services also included
– Guidelines on Infrastructure Sharing
30

31. GOING FORWARD
Mobile infrastructure has proved itself to be the most
effective medium to deliver benefits of CONNECTIVITY to
rural areas.
Need to deliver more Technology-based Solutions to the
Rural Masses while Overcoming many Inherent Constraints
through Innovative Solutions
Industry fully committed to work with Government to
deliver benefits of Connectivity & Mobile Broadband
to Rural India
31

32. THE RACE FOR WIRELESS BROADBAND
BEYOND
3G
32

33. HSPA
 HSPA is the set of technologies standardized by 3GPP3 that defines
the migration path for UMTS operators worldwide. HSPA includes
HSDPA (High Speed Downlink Packet Access), HSUPA (High Speed
Uplink Packet Access) and HSPA Evolved .
Wi MAX
 It is defined as Worldwide Interoperability
for Microwave Access (WiMAX) and is
based on the IEEE 802.16 family of
standards. Mobile WiMax could be a
complementary technology.
Both have been recognized by ITU as IMT Radio Interfaces
33

34. SOME QUICK FACTS- HSPA
 Commercial Deployments – 267 Operators in 114 Countries
 Speeds – users are enjoying speeds of 1 Mbps & above
 Performance improving rapidly – several networks now reaching peak rates
of 14 Mbps
 Huge range devices available – 1,470 HSPA devices from 171 vendors, with
device types including embedded notebooks, handsets, smart phones, USB
modems (dongles), datacards, wireless routers, wireless gateways
 Usage is rising rapidly – HSPA operators across the world are reporting a
surge in data traffic
 Cost effective broadband for rural areas and emerging markets – operators
are increasingly using HSPA to bring broadband services to communities
beyond the reach of fixed networks
34

35. SOME QUICK FACTS- HSPA
 Uptake is accelerating – the number of HSPA connections is set to reach
180 million by the end of 2009 from over 88 million in January 2009 and 24
million at the end of 2007. By the end of 2012, HSPA connections worldwide
are forecast to be over 900 million
 Leverages the GSM family – HSPA builds on the successful GSM technical
and commercial model, offering users secure network interoperability access
and global roaming
 Enjoys a high level of vendor support – the vast majority of the world’s
mobile equipment vendors support HSPA technology and there is no one
single dominant player, ensuring vigorous competition
 Increasing speed – 21 Mbps through HSPA+ Release 7, while Release 8 will
deliver peak bit rate of 42 Mbps
Source - GSMA
35

36. THE HSPA ADVANTAGE
 Backward Compatibility
 With Existing 3G/UMTS
 Consistent with 3GPP standards.
 Better Quality of Service assured
 Reduced Latency
 Short Transition time Interval
 Reduced Response Time
 Use of Harmonized Spectrum
 Economies of scale
 Seamless roaming
 Inter-operability
 Interference free operations
 Excellent System Capacity
 Doubles base station capacity of WCDMA.
 Fast Link adaptation.
 Fast hybrid Automatic Repeat Request.
36

37. The HSPA ADVANTAGE
 High Network Throughput Efficiency – Through fast Scheduling
 Integration of voice with Data
 Dynamic Allocation of bandwidth
 High Bite Rate Transmissions
 Ever-improving performance, with commercially-proven transmission
bit-rates of up to 14Mbps today and up to 42 Mbps in the near future
 LTE (Long Term Evolution) will deliver further enhancements in peak
rates (exceeding 100Mbps)
 Superior Coverage
 Fewer Number of sites required.
 Low Capex.
37

38. HSPA: SPECIFIC CASES
AT & T (formerly Cingular wireless) @ US
 Deployed world’s first large scale HSDPA
service.
 Resulted in rapid growth in data ARPU.
 Courtesy HSDPA
– To become most successful mobile TV
provider.
Most successful
– Launched live video share calling.
Mobile TV Provider
 Superior spectrum efficiency
– Competitive pricing of data services.
 Better coverage, especially in-building
HSPA has proved itself in the most competitive US market
38

39. HSPA: SPECIFIC CASES
Telstra @ Australia
 World’s largest national HSPA network.
– Rolled out in just 10 months.
– Reaching 98% of the population.
 Peak network download speed boosted to
3.6 Mbps from 384 Kbps – with low latency.
– Mobile TV.
– Video Conferencing.
 Even in the countryside, customers
experience data rates in > 1 Mbps, while
those closer to cell sites experience access
Telstra leveraging the assets
at over 2 Mbps.
of existing 2G Infrastructure
Brought broadband services to many remote
communities for the first time.
39

40. HSPA: SPECIFIC CASES
MTN @ South Africa
 MTN began testing HSDPA series in
November’05 and in March’06 it became first
operator in South Africa to launch commercial
service, and the eleventh worldwide.
 Courtesy HSDPA:
– Fast and reliable Internet access to remote
towns.
– Offers to very poor community access to:
• Voice Telephony services. Bringing Broadband
to the masses
• Cheap Internet services.
– Broadband and computing to low-income
townships.
– Boosting education and health care.
HSPA is delivering faster speeds to wider
geographical area.
40

41. HSPA: SPECIFIC CASES
MobilKom @ Austria
 Launched HSDPA in January 2006.
– Delivering download speed of 1.8
Mbps
 June 2006, 1st upgrade
– Boosting speed up to 3.6 Mbps.
 November 2006, presented first
lightening fast HSUPA
– Offers the highest currently
available upload speeds.
Austria’s HSDPA Network
– Real time mobile video streaming.
HSPA has provided a new way of working fast, reliably
and cost effectively to the people of Austria
41

42. HSPA offers a superior option due to:
- Availability
- Operationally proven superior coverage
- Spectrum Efficiency
- Economies of scale
All technologies have ample scope to play their role.
However, HSPA is expected to maintain & increase its major
share of this market
42

43. LONG TERM EVOLUTION
 LTE is an all IP network based upon TCP/IP, with higher level services
such as voice, video & messaging, built on top.
 LTE has considerable flexibility, supporting channel bandwidths from
1.4 MHz to 20 MHz.
- This optimises the use of radio spectrum by making use of new
spectrum and refarmed spectrum opportunities.
 Operators evolving to LTE from GSM/WCDMA/HSPA will maintain full
backward compatibility with legacy networks.
 LTE will have scalable channel bandwidths using OFDMA with both
TDD and FDD operation.
43

44. LTE BENEFITS
 All IP nature of LTE means converged services will become a reality
 It can deliver the massive capacity at a much reduced cost per bit.
 Applications like High Definition (HD) video streaming, mobile
gaming will be possible with LTE.
 Low latency (below 10 ms) & higher Data throughputs.
LTE is on track, attracting global industry support
- 39 LTE network commitments have been made by 19
countries.
44

45. COAI PROJECTIONS FOR THE FUTURE
1400
1200 1 bn
1000
800
Millions
600
400
200
0
2007 2008 2009 2010 2011 2012 2013 2014 2015
Even @ 10% broadband subs, by 2013, there would be >100 mn
broadband subs in the country.
45

46. CONCLUSION
GSM/3G/HSPA system with its established roadmap & proven
capabilities forms an appealing ecosystem & is well positioned
to succeed in mobile broadband.
3G is one of the most cost effective ways to deliver mobile
broadband to the masses.
Expectedly 3G can single-handedly achieve far more in terms of
bridging the digital divide than any other technology
46

47. trdua@coai.in
Visit us at: www.coai.in
47