Telecom: 3G finally, 4G not too far

Business Today

On December 11, 2008, a rather momentous event took place when the Union Telecommunications Minister A. Raja placed a video call to Prime Minister Manmohan Singh over a third-generation (3G) mobile network. Don't celebrate just yet, because, while this call was made on a Mahanagar Telephone Nigam Limited (MTNL) network, the service is still a good two-three months away from a fullfledged commercial deployment.

However, despite the controversy that he has courted over the seemingly arbitrary allocation of additional second-generation (2G) spectrum, Raja has ploughed ahead with his plans for an auction of 3G spectrum for private players early in 2009. The UPA Government, which is facing mounting bills over their social programmes, is also keen on the auction to go through, as they expect to raise between Rs 20,000-40,000 crore.

The problem now is not one of Raja's making, but mired in history. 3G might be here, but there is barely any spectrum for it. The 2100 megahertz band, which will be used for 3G, is crowded by India's defence forces. Despite pleas to do so, the armed forces have held on to spectrum in India's most lucrative mobile market New Delhi. So, even if the auctions go through, the capital will have very few 3G service providers. But then again, the services have to come in the first place.

So, what really is 3G? In the hoopla surrounding the term, the question no one answers is: 'what is the big deal about 3G?' The short answer is that 3G will allow operators to offer voice facilities far more efficiently than today's networks. Thanks to the High Speed Packet Access (HSPA) standard that is most likely to be used to deliver 3G services, it might be possible to allow rather high speeds over-the-air broadband.

3G, of course, is not the only story unfolding as we move into 2009. The government is planning to auction spectrum in the 2300 and 2500 megahertz band for Intel's Wi-Max as well. However, the long and painful gestation period for Wi-Max might see it upstaged by something called Long Term Evolution (LTE) or fourth-generation (4G) mobile networks. This new standard has one inherent advantage coupled with new types of radio modules on handsets, it can operate over a range of frequencies.

The good news is that unlike other countries where terrestrial TV (signals you pick up with an aerial) has crammed the 700-megahertz spectrum with channels, India has a lot of free spectrum there. In the US, which is switching over to an all-digital TV broadcast regime, the 700-megahertz spectrum was auctioned for several billion dollars. LTE, which will provide lightning fast broadband and voice channels, can operate in this frequency. Better still, LTE is on the verge of its first commercial deployments globally.

India's delay in going mobile allowed the country to skip the trouble of legacy mobile systems, which plagued some other nations. The inordinate delay in launching 3G networks might just mean that Indian telecom can do another skip and enter the field of 4G.

To the uninitiated, 4G (also known as Beyond 3G), is a term used to describe the next complete evolution in wireless communications. A 4G system is able to provide a comprehensive IP solution, where voice, data and streamed multimedia can be given to users on an anytime, anywhere basis, and at higher data rates than previous generations.

The good news is that having delayed 3G implementation for so long, service providers in India could decide to skip the HSPA and Wi-Max standards and deploy LTE or 4G, which is more efficient than HSPA and better at data than Wi-Max. Don't be surprised if India signs up to the LTE bandwagon early on.

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