Ericsson ConsumerLab findings call for significant 3G network investment in India

Telecom Lead India: The recently announced findings of the Ericsson
ConsumerLab study call for significant investment in 3G network infrastructure
in India. Airtel, Aircel, Vodafone, Reliance Communications, Idea Cellular,
BSNL and MTNL need to invest in 3G roll outs to improve revenue streams.

Around one third of 3G users faced network related issue at
least once daily. This has been one of the main apprehensions about 3G access.
The second big issue was lack of availability of enough content to subscribe to

According to Ovum, mobile capital expenditure has gone up to
$6.02 billion in 2011 from $4.67 billion in 2010, primarily due to 3G investments.

Indian telecom operator Capex up 20% in 2011 at $7.5 billion

The telecom capital expenditure of Indian service providers
has gone up by 20 percent in 2011 at $7.5 billion from $6.24 billion in 2010.
Telecom Capex in 2011 is significantly lower than their capital expenditure in
2009. In 2009, telecom operators spent $10.11 billion for adding

Teens are the major consumers of 3G, according to the
report. Poor speed, inadequate coverage and lack of good content are adding
fuel to the decline of the 3G market.

One third of 3G users face network issue daily in Indian
telecom market

If telecom operators cannot improve network quality, users
will continue to use GPRS service and the mobile broadband ARPU will further go
down. 3G consumers are facing issues due to network coverage, quality and lack
of a mechanism to monitor their usage.

The industry is cagey about significant 3G investments in
2012, mainly due to uncertainties over 2G spectrum and 4G / BWA plans.

Indian operators’ investment in mobile broadband is
significantly lower than several operators in developed telecom markets.

T-Mobile USA to invest $4 billion for network modernization and
launch LTE services

T-Mobile USA will invest $4 billion to modernize network and
launch LTE services. T-Mobile’s 4G HSPA+ network currently covers well over 200
million people. T-Mobile will continue to expand its HSPA+ 4G footprint and its
4G product and service offerings. More than 90 percent of T-Mobile device
sales in the fourth quarter were 3G and 4G smartphones. As data usage and
smartphone adoption accelerate, fewer customers are utilizing 2G

Verizon Wireless to invest over $22 billion in LTE CAPEX over
next 4 years

Mobile broadband has seen considerable growth with 3.5 G
HSPA subscriptions reaching 566 million, EV-DO subscriptions reaching 272
million, and 4G LTE subscriptions reaching 6.4 million. LTE subscriptions that
currently comprise only 0.1 percent of the market will significantly grow over
the next 5 years, eventually representing more than 8 percent of the market in

Indian operators are keen to increase their ARPU from mobile broadband.
Currently, it is one of the lowest among major telecom markets. ARPU from
mobile broadband of Airtel is lower than operators such as NTT DoCoMo Japan,
KDDI Japan, Telstra Australia, Rogers Canada, Verizon US, AT&T US, China
Mobile China, MTS Russia, Vodafone West Europe, SK Telecom South Korea and

Idea Cellular 3G data incremental ARPU at Rs 79

Idea Cellular as on 31st December has more than 2.25 million
active subscribers on 3G platform in the month of December with an average
usage of 235 MB per month and 3G Data incremental ARPU at Rs 79.

Vodafone India saw a huge surge in data revenues, which grew
by 29 percent to Rs 647 crore.

Due to 3G, Indian telecom operators profit to decline 85% in

Why 3G operators are going slow on investments. According to
India Government’s Economic Survey, 3G spectrum fee and Capex will affect the
financial health of the Indian mobile industry. Mobile operators paid
around 1 lakh crore for buying both 3G and BWA spectrum in 2010. Can they
afford to invest now?

3G subscribers to cross 200 million in India by 2016

According to Evalueserve, 3G subscription will increase
at a rapid pace of 30 percent CAGR between 2012 and 2016 to cross the 200
million mark.

Baburajan K

[email protected]