Norwegian-based Telenor announced recently that its Indian operations are working on technology to offer 4G mobile service on a much more limited amount of spectrum than usual—a change that would allow the company to jump from offering 2G services directly to offering 4G, without ever having invested in 3G. “We are not there yet, but in the future we believe that this might be possible,” stated Telenor executive vice president Hilde Tonne. Besides developing the technology needed to launch 4G on a narrow band of spectrum, to put this plan into action Telenor will also need to convert its current spectrum license to a unified license that would allow it to carry any type of traffic over the frequency, as opposed to only 2G. This approval is far from certain, given the Indian regulatory climate. As an inspiration for the move Tonne cited Telenor’s experience in neighboring Bangladesh, where it “had started investing in 3G, but after three quarters of the year, saw it coming much faster; so we decided to stop 3G and phase in 4G.”
In addition to its experiences in Bangladesh, Telenor’s strategy was likely also encouraged by a recent J.P. Morgan report that stated that after a slow and incomplete adoption of 3G, many Indian consumers might be in a position to jump directly from 2G to 4G. While it is too soon to tell if Telenor will be able to launch a 4G network without ever having offering 3G services, what is clear is that this will be the path for many Indians. They have largely avoided 3G plans because of the increased device costs and the unreliability of service. These factors appear poised for change. India is now the world’s fastest growing smartphone market, with most of these phones being 4G-enabled, and, as the percentage of its 1.2 billion people who have smartphone increases, so too do the rewards for connecting them with mobile broadband.
Given that only 9 percent of India’s population is currently connected to the internet, MNOs will likely serve as the nexus of the browsing experience with the potential to take a share of all e-commerce—as they have done in many African markets. With stakes this high, it is not surprising to see a relatively small operator like Telenor pushing an aggressive strategy that would put it ahead of the curve. Telenor’s larger competitors have already begun working on their 4G networks and are likely now evaluating their own strategies to speed up wide-scale deployment. All the market players appear well aware that early leaders will have substantial advantages as the rate of adoption accelerates.
The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues:
No comments:
Post a Comment