Why we need 3G ?

At times, we as a nation tend to get ahead of ourselves. Or at least many of us do. Look at 3G, the new mobile phone technology that has transformed the lives of people in many other nations, starting with Japan nearly a decade ago. For about six months now, many of us have been buying 3G handsets including the iconic iPhone — the latter at prices exceeding Rs 31,000 — for a feature that is not even available, and may not be available very soon. Think of it as buying a car before a road has been built. Without the new technology and zippy downloads that allow even television to be watched on a mobile phone, such gadgets remain mere toys.

India has squandered several years of tearaway growth of its mobile market and now finds itself a laggard in the rollout of 3G, or third generation, technology. It might seem like poor consolation, but India is not the only major nation that has stood still while the rest of the world marched along. China, too. This, ironically, means the world’s two largest cellphone markets don’t have access to the newest technology. China is paying the price for a critical mis-step — choosing a home-grown technology. India rolled out 3G in Delhi at the turn of this year but it is only symbolic. Only small pockets of the Indian capital enjoy the ser-vice, minus the bells and whistles that would accompany a total rollout. Meanwhile, it is not just the advanced economies that lead India. Several smaller countries, and emerging markets, have. In fact, the shining star in the Asian region is Indonesia, which has eclipsed front-runners such as Korea. Why do we really need 3G? We need it not only to satisfy our craving for instant gratification, whether to download the latest music, watch videos or live cricket, or Internet surfing. “There is a pent-up demand for richer (mobile) experience, even for voice, spectrum is choc-a-block” resulting in poor quality services, says Nareshchandra Singh, an analyst at IT research group Gartner.

We need the new technology also to fulfil, and create new, business. A remarkable finding in recent years is the positive correlation between GDP growth and penetration of mobile phones. According to research by the consulting firm McKinsey, developing countries can raise their gross domestic product by 0.5% if they can increase mobile use by 10 percentage points. The gains each year for India, already a trillion-dollar economy, could be as high as $50 billion — the equivalent of creating two Infosys.

The benefits to India have been demonstrated in recent years. Rapid use of the mobile phone helped India overcome decades of negligible telecom growth. As Singh points out, “India took 50 years to achieve two per cent teledensity” with landline phones, but in only five years, cellular growth pushed teledensity to 20 per cent.

“Cellphone technology is cost-effective and can make things happen faster,” Singh says, whereas “wiring the country takes a long time”.

The rapid adoption of 3G can make up for reverses India has suffered in its bid to expand wired broadband and in its historical inability to quickly raise PC penetration. India has miserably failed in meeting its broadband targets, notably because of the so-called last-mile problem — stretching that cable into homes and offices. India has about 4.1 million broadband lines, compared with China’s 75 million. Similarly, PC penetration has been slow. Consequently, we have only three PCs and one broadband line for every 200 people. Compare this with a cellphone in the hands of every fourth person in the country. New 3G technology has the potential to put a virtual PC with a broadband connection in the hands of over 300 million, the current mobile user base, at one stroke resolving the inadequacies of PC and broadband penetration. Aman Kapoor, who heads a US-based telecom think tank Packetology and has studied the markets in India and other emerging nations, believes it is still not too late for India to seize the opportunity. “I believe if 3G service is priced at Rs. 400 per month — India could have 50 million 3G subscribers,” he says. Most providers have 3G plans in place and could roll out services in six months, Kapoor adds.

For years, progress on 3G has been stalled by political machinations and policy para­lysis, not to mention controversy over the way spectrum was given away to 2G, or second generation, service providers. Unless the spectrum auction takes place, it is hard to tell when 3G will become reality in India. With Lok Sabha elections around the corner, things don't look good and delays may be inevitable. The bottom line: many of us might be left twiddling with that expensive 3G phone we may have bought and might even need to upgrade before 3G rolls out.