Indian 3G: the road so far

Bruce Einhorn
Bloomberg Businessweek
In 2007, Varun Nand Chahal, a young entrepreneur in Bangalore, bought a 3G-ready mobile phone. It was his first handset capable of high-speed Internet access, and he was looking forward to using it to surf the Web.
 
The only problem was that India didn't have 3G. The launch of the service in the country was repeatedly delayed. Just recently, Chahal, 25, got his wish. After three and a half years of waiting—and just in time for the rest of Asia to move on to 4G— Indian wireless carriers are rolling out 3G.
 
Tata Teleservices began offering 3G in November, and Bharti Airtel, India's largest operator, launched service in the southern states of Karnataka and Tamil Nadu in January. Aircel launched this week in one circle, while Vodafone Essar and other carriers plan to introduce 3G, too. How's the quality? "Sometimes I get a signal," says Chahal, a Bharti Airtel customer. "Sometimes I don't."
 
Japan and South Korea got 3G early last decade, and China has had it since 2009. In India, bureaucracy stalled the process. The government didn't auction off licenses for the segments of electromagnetic spectrum that 3G uses until last year.
 
Then, companies that spent a combined $14.9 billion in those auctions had difficulty building up their networks: Regulators banned operators from buying equipment from low-cost Chinese suppliers such as Huawei and ZTE for nine months until the vendors agreed to satisfy security concerns by providing access to their source code.
 
Another hurdle: The country is divided by telecom authorities into several dozen areas, with five or six operators getting permission to work in each - and none getting the go-ahead to operate nationwide. Since no one company has a nationwide 3G network, wireless carriers need to form alliances with rivals and provide roaming services domestically.
 
For all the hiccups, though, the new 3G networks offer the potential to transform India. Less than 1 percent of the population has access to broadband connections, says Aditya Kaul, an analyst with ABI Research in London, because the quality of fixed-line networks is so poor.
 

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