Archive for June 2011

 
 

Only the best will win

Is competition good for business? More specifically, is the excessive competition good for telecom businesses in India? On the one hand, customer is truly king at the moment, with aggressive pricing and interesting schemes wooing him. On the other hand, this cut-throat competition is still volume based and not value based.

The truth is that in this overly competitive environment, making profits is tough. And if no money is being made, there is none to invest in ramping up the infrastructure, which is a critical need in Indian telecom at this stage. For instance, the teledensity in rural India is just a little over 30 percent. We are also not using the best infrastructure technologies—most towers base stations are old and therefore more fuel-guzzling, adding to the costs for the company. Telecom infrastructure, therefore, needs a lot of investment—something that none of the telecom companies can spare.

If we miss the bus on infrastructure and innovation, we will get left behind. While India is one of the most exciting markets for telecom companies to be in, their growth here will be a painful process. Some may even be unable to sustain themselves in this volatile market and have to pull down their shutters.

This flux is a natural part of growth and maturity, and a healthy development for the long run. For the short term—it’s a jungle out there and only the mighty will survive.

Who will reinvent 3G for India?

Aggressive plans propped by even more aggressive promotions—3G has really arrived in India. Or has it? Is 3G the panacea that everyone thought it was? It of course provides more bandwidth, but can it make connectivity ubiquitous? Can it take the Information Age to the remote parts of the country? Can it, even in urban settings, replace the dependence on DSL connections or even the USB wireless connectivity dongles?

The numbers game in India can be a dangerous one. And yet, that’s the game everyone plays, and that’s the game operators are playing with 3G. You may get the numbers, but is there a vision for 3G. If there had been a vision, 3G would have been used to take broadband connectivity to the places in India where even power hasn’t reached. For a long time it could be the only access to internet that would reach them. But the way 3G is in India, it is not designed for such wide-scale adoption.

There is, of course, talk of 4G coming in soon. But what is the guarantee that 4G will address this problem either—it will, in all probability, be the internet of the rich. So for now, we have to think 3G.

For 3G to be effective in anyway, bandwidth efficiency will be critical. The services that get offered should be bespoke to Indian market, not just copies from other markets. Many of the imported services have been created in and for an environment of practically unlimited bandwidth. They are not viable for India at all. We need truly new, unique and efficient solutions.

But I’m not sure anybody is thinking along those lines.