The Economic Times
26 February 2016
Barcelona: India has all the ingredients to become a 1 GB society - where every data connection has a minimum speed of 1 Gbps - but high prices of spectrum make it difficult to achieve, said Idea Cellular managing director Himanshu Kapania.
"Technologically, it's possible for us to be on par with the world (broadband speeds) as the materials required for a 1 GB society are available in India with the newly proposed auction, but at current spectrum prices, no telco will have the appetite to invest in a GB network," Kapania told ET at the Mobile World Congress in Barcelona.
Spectrum costs have to be nominal to achieve such internet speeds, he said."We can talk about 40 Mbps with all the intent and investment, and at best, take it to 100-200 Mbps, but a 1 Gbps network needs radically higher investment... We need a paradigm shift where spectrum comes at a nominal cost for the operator," Kapania said. Experts participating in the Mobile World Congress this year believe that an individual will need a minimum 1 Gbps network for future communication, especially since the likes of Facebook CEO Mark Zuckerberg are talking about sharing 3D scenes.
Kapania said China has spent a sizeable 18-20% of its telecom revenue on network expansion, investing $45 billion in replacing 1.8 million base stations. This led to a large chunk of 3G consumers in the country shifting to 4G in merely two years. While China has 1.2 billion cell phone users, compared with India's 1billion, "its average revenue (per user) is $15, while ours is $3", said Kapania.
In India, he said, telecom operators spend almost 60% of revenue on capital expenses, but no one counts spectrum expenses as material investment. He said, according to their calculations, Indian operators have spent about Rs.30,000 crore in capital expenditure, Rs.1,70,000 crore in spectrum fees and another Rs.50,000 crore in fees from earlier years. This means, "we spent $33-34 billion in a market of $60 billion revenue in two years".
Not ready for RCS
As for Google's Rich Communications Services (RCS) universal messaging initiative, Kapania said Idea is not very keen on participating in it since unlike its global peers it cannot bundle voice and data.
If Idea opts out, it will be the only Indian GSM player among the top three to skip the initiative, which already has on board Bharti Airtel and Vodafone, and other global telecom majors like Orange, Deutsche Telekom, Sprint and Etisalat.
The RCS is a new standard for carrier-based messaging that will enable group chats and high-resolution photo-sharing on Android devices. Since mobile messaging has reportedly been falling behind modern messaging apps such as WhatsApp, Hike, WeChat, Viber and Telegram globally, the RCS is aimed at recovering lost ground. GSMA, which has been promoting RCS since 2008, said telecom operators in general have agreed to move towards a single universal profile based on the RCS standard, which is essentially an improved version of the existing SMS and MMS standards. "We see that our global peers bundle voice and data such that if you were to buy the service without one of the two, the price wouldn't be very different. But in India, we have to sell voice, then data, and then content. This is the reason we don't want to participate," said Kapania.
However, Kapania said, Indian operators should also start bundling, because "if we bundle, then we too can cross subsidise services; overall they will all get cheaper".
Globally, telecom companies are buying content, or rights, or getting into partnerships, to increase consumption, and they are all sold together." That is why they are not afraid of 5G or Internet of Things," he said.
At the MWC, Indian operators were awarded for putting up 800 million connections for Mobile Connect, a service that proposes to create a registration ID based on the mobile number.
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