Whom will Enterprises Court?

Amidst all the fracas and excitement over 3G and its auction in India, there
have been heated debates on whether 3G will actually deliver on its long awaited
consumer promise of high speed Internet on the move and serve as a profitable
business option for telecom service providers. To begin with, there have been
inordinate delays in the launch of 3G services in India. While the auction
itself has been deferred twice, there seems to be unresolved spectrum issues
between the countrys telecom and defense ministries that have made the process
more complicated.

Moreover, only the two key public sector telecom providers, MTNL and BSNL
have been allowed to launch 3G services, leaving the other players wondering
whether it is worth the wait.

Manesh Patel, partner, telecom advisory services at Ernst & Young India says:
Its a highly politicized issue. Even after the spectrum is vacated, there are
various other issues pertaining to the formatting and execution of auctions that
need to be looked into. The new date for the auctions has been shifted to March
2009 and elections are due post May 2009. If the bidding is delayed further, 3G
may not remain a priority for the policymakers.

To 3G or Not to

With the Department of Telecommunications gearing up for the simultaneous
release of 3G and WiMax spectrum, analysts expect the two emerging wireless
technologies to battle it out for supremacy.

3G, or third generation, is the generic term used for the next generation of
mobile communications systems. 3G networks can send data up to forty times the
rates of earlier digital networks. With a 3G phone and access to the 3G network
users can send and receive video calls, watch live TV, access the Internet,
receive emails and download music tracks, as well as the usual voice call and
messaging services found on a mobile phone. As the 2G spectrum is getting
increasingly congested, 3G is being viewed as a medium to push some users up the
value chain and free some spectrum space at the bottom.

WiMax or Worldwide Interoperability for Microwave Access is a telecom
technology that enables wireless transmission of data. It offers downloads of up
to 70 Mbps as compared to the 15 Mbps that 3G provides. In India, companies like
Tata Communications Internet Services, Intel, Bharat Sanchar Nigam, Bharti
Airtel and Reliance Communications are the proponents of WiMax and have already
conducted beta-runs of the technology.

Upgrading to 3G and WiMax will be an expensive affair for all telcos.
However, they are willing to take the chance to enhance the diminishing ARPUs by
developing more VAS around these technologies.

Enterprise Adoption

While reviewing the benefits of 3G to the consumer and enterprise community
the consumer segment takes away a large chunk of the pie. According to Patel, 3G
is more focused on the consumer promise and not so much on the enterprise side.
I dont think enterprises would find value in migrating to 3G. Enterprises will
not junk their existing telecom platforms as in most cases these platforms are
serving their existing needs quite well. So any decision to migrate upwards
would be driven by cost benefits alone, Patel avers.

3G will improve transactional speeds and enable companies to respond faster to customer needs Ishwar Jha, senior VP, Zee Entertainment Enterprise	In a country like India 3G cannot be the ideal platform for the common user Ajay Meher, CIO, Sony TV

Patels opinion has been corroborated by the recent V&D-IDC Enterprise
Broadband Survey which reveals that amidst a hullabaloo about 3G technology,
only 13% of the enterprises seems to be excited about it. Of the 156 large
enterprises interviewed from across the country 87% gave a negative response
when asked if they were excited about 3G for broadband applications.

On the other hand, when Dataquest spoke to CIOs of some prominent enterprises
in India on their opinion about 3G, we received a very mixed set of responses.
While some were excited about the technology and its potential benefits, others
expressed their doubts on the applicability of 3G in their core business. Some
of the CIOs thought that WiMax scores over 3G. However, there was a certain
consensus that 3G holds the capability to transform the telecom industry in
India.

As enterprises are expanding their global footprint, the need for 3G is even higher as it can enable video conferencing though mobile Satish Pendse, CIO, Hindustan Construction Company	Any migration to 3G would mean upgrading our devices. The cost of service would be an important concern Shirish Gariba, CIO, Elbee Express

3G Suitors

Ajay Meher, CIO, Sony TV says 3G will definitely be a better technology
compared to GPRS and CDMA. However, when compared to WiMax the spectrum costs
will be a big challenge for 3G. So, probably in a country like India where cost
or ARPU is a major factor, 3G cannot be the ideal platform for the common user.

Expressing similar views, Dhiren Savla, CIO, Kuoni Travels says, Both
technologies have their own advantages and disadvantages. 3G may be more
expensive but still we should wait for the commercial launch. 3G is widely used
for voice and already has standard equipment whereas WiMax may take a little
while before standards evolve. However, in the present scenario, WiMax can
possibly offer more throughput than 3G.

Media companies are more enthused about building services around 3G and feel
it will revolutionise the way content is delivered to viewers going ahead.
Ishwar Jha says, Media would be one of the early adopters of 3G as it would be
able to provide live TV on mobiles to viewers who are on the move. We have
already launched a 3G ready mobile service called ISee, which delivers live TV
channels on the mobile phone. We are exploring 3G to provide anytime anywhere
entertainment to our viewers.

On the other hand Sony TV is more cautious about building services around 3G.
Ajay Meher is taking the cue from European countries that have deployed 3G and
are still struggling with the stability of their 3G networks.

Camp WiMax

Some CIOs are very optimistic about 3G and its benefits to enterprises.
Ishwar Jha, CIO, Zee Network feels that enterprises would not face any
challenges in migrating to 3G. According to him, 3G will benefit businesses in a
big way as it will improve transactional speeds and enable companies to respond
faster to customer needs.

Giving a very different perspective on the long term benefits on 3G, is
Satish Pendse, CIO, HCC. He says that enterprises are excited about 3G as it
holds the potential to reduce travel costs and improve the productivity of the
workforce. Today, as enterprises are expanding their global footprint, the need
for technologies such as 3G is even higher as it can enable video conferencing
though mobile and reduce the cost of travel. Better connectivity will boost the
use of mobile applications and significantly improve the accessibility of a
person. This will in turn improve human resource productivity which is turning
out to be a bottleneck in many industries, Pendse explains.

It is said that 3G and WiMax will see high uptake in bandwidth hungry
industries with real time connectivity requirements such as media, cargo and
logistics, retail, pharma (telemedicine), infrastructure, etc.

For example, Shirish Gariba, CIO, Elbee Express believes that 3G is taking a
lot of time to be rolled out and operators are betting more on WiMax. We at
Elbee use GPRS, as of now, for our mobility application and the devices deployed
are not 3G enabled. Any migration to 3G would mean upgrading our devices. And
also the cost of service would be an important concern, he adds. Gariba is also
of the opinion that the low cost of WiMax spectrum will clearly be the driver
for the service providers to enter the field and come up with host of
applications for the business users.

Subbarao Hegde, CIO, GMR Group too has plans to deploy WiMax as he believes
that it will add value to the companys network, in comparison to 3G. GMRs
operations are more data intensive and the company presently works on a MPLS
network, has VPN tunnel across all locations and has provided all its off-site
employees with handheld devices. For the volume of data that we share on a
daily basis, 3G will prove to be too expensive. Hence, we will upgrade to WiMax
as it is easily compatible with our existing infrastructure, says Hegde.

On the other hand, another infrastructure company with operations spread even
in the remotest corners of India, HCC, is keen on adopting 3G to reduce
operational costs on its present VSAT platforms. However, it has serious doubts
on the availability of 3G service in the geographies that they operate in.

Divided Polity

It is evident that there is a lot of divided opinion and multiple
preferences even among enterprises within the same industry. Globally, there is
a general feeling that 3G is slowly winning over WiMax, particularly because 3G
still has a long evolutionary path ahead of it. So after 3G one can look forward
to 4G and LTE and a host of newer technologies. On the other hand, WiMax is
already stagnant in terms of technological enhancements.

According to Manesh Patel, in the long run, WiMax will focus on providing
last mile connectivity to broadband providers whereas 3G will shape into a
direct-to-consumer model through handsets and data cards.

3G and WiMax will co-exist for a long time to come, concludes Patel.

Priya Kekre

priyak@cybermedia.co.in