3G technology to bolster business of B2B companies in India

For years, 3G licensing in India had been postponed; sometimes due to unpredictable government policy and sometimes due to conflict in parliament over the issue of spectrum allocation. However, the issues haven’t stopped 3G services from embarking in India. India entered into the world of 3G with the soft launch of services by MTNL and BSNL in selected cities.

3G auctions in India were held in May 2010. Seven out of the nine bidders gained the spectrum. Bharti Airtel, Reliance Communications and Aircel each won 13 circles, while other operators including Vodafone Essar, Idea Cellular, Tata and S Tel received licenses for nine, eleven, nine and three circles, respectively. On the other hand, companies like Videocon and Etisalat were unsuccessful to acquire licenses.

Scope of 3G networks in India 

Recently, the Federation of Indian Chambers of Commerce and Industry forecasted that the 3G subscriber base is expected to reach 90 million by 2013, accounting for 12% of the overall wireless user base. 3G service revenues are expected to generate USD 15.8 billion by 2013, accounting for a share of 46% in overall wireless service revenue. Due to the 52% contribution made by the replacement market, annual sales of 3G devices are projected to reach USD 81.3 million by 2013. Correspondingly, the annual 3G device revenues are expected to increase to USD 11.2 billion, with 59% coming from high-end handsets.

Impact of 3G rollout on B2B Companies 

For B2B companies like Oracle, 3G brings lot of business opportunities. Firstly, existing 2G or 2.5G operators will have to upgrade their system and processes for 3G deployment. Secondly, the IMT—2000 (International Mobile Telecommunications-2000, usually called as 3G or 3rd Generation) arrival will attract new operators and some foreign players towards the Indian market. These factors will emphatically bolster demand for new and more compatible business software and hardware systems.

For instance: 

Many of the operators have already given contracts worth millions for 3G equipment to various international telecom equipment vendors including Nokia Siemens Networks, Huawei, Ericsson and ZTE. 

• Ericsson has already received 3G orders for a total of ten circles - seven from Bharti Airtel and three from Vodafone. In addition, the company is expected to get another order for five circles from Aircel. It is been also speculated that Idea Cellular is in discussion with Ericsson over 3G infrastructure. 
• Till now, Nokia Siemens Network has been awarded 3G equipment orders for nine circles - three from Airtel and six from Vodafone. Further, the company is expected to get an order for four circles from Aircel. The company has also been chosen by Tata Docomo for its 3G network. 
• Huawei has won 3G contracts for three circles from Airtel. It has also received orders from Reliance Communications and Tata Docomo. 
• ZTE has also received 3G contracts from Aircel and Reliance Communications. 

In addition, other B2B companies such as semiconductor OEMs also stand to gain from the rollout. Companies including Broadcom (BRCM) and QUALCOMM (QCOM), which manufacturer 3G-compliant chipsets, will gain new business opportunities since demand for their products will soar with increased 3G handset penetration.

The success of 3G in India, would however delay the onset of 4G technology, which is more advanced than 3G. This delay will affect some B2B companies like Nortel, which has been aggressively working on 4G technologies.

Since huge number of mobile users and subscribers are expected to enroll and enjoy the high-speed 3G services, 3G services are definitely going to have a huge impact on India companies. However, lets wait and watch what future scenario will bring in...