3G Was Not Successful, What Will Be Fate Of 4G Launched By Airtel?

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While launching Airtel’s 4G services in Kolkata yesterday, Telecom Minister Kapil Sibal admitted that 3G services have not been as popular as 2G due to lack of liquidity in the market to invest in the infrastructure and the devices required.

“We will give the environment to the industry to manufacture low cost quality smart phones. But it is the industry which has to deliver. This is the biggest challenge for the industry,” he told reporters. “3G has not delivered because they paid such huge prices for the spectrum and there is no liquidity in the market for them to invest in the infrastructure and the devices to deliver 3G, for which 2G was successful and 3G was not successful.”

Telecom major Bharti Airtel  became the first telecom operator to launch broadband wireless access (BWA)  services based on 4G technology in the country. The high speed service was inaugurated by Sibal.

A successor to the 3G and 2G families, 4G is expected to be five times quicker than 3G services. It would offer services such as high-definition mobile TV and video conferencing.

Airtel, which had bagged BWA spectrum in four telecom circles – Kolkata, Maharashtra, Punjab and Karnataka – for Rs.3,314.36 crore in 2010, selected Chinese telecom equipment maker ZTE  to manage its services in Kolkata. Airtel will rollout 4G in Bangalore within 30 days followed by Pune and Chandigarh.

It is good development from the perspective of arrival of latest technology in the country. But the moot question is how far it will be successful considering that Airtel has invested huge amount to purchase the BWA spectrum. Unfortunately, its predecessor technologies – 2G and 3G were not successful and this has been admitted by telecom minister. For 4G service to be successful, economical 4G complaint handsets and tablets should be available in the country, which is not the case so far. Currently, worldwide, very expensive devices are 4G compliant and we wonder how many people can afford such devices in India.

Another roadblock for the success of this service could be tariff for utilising the 4G services. Since the telecom companies have to empty their pockets to bag the BWA spectrum from the government, their return on investments should be commensurate with their investments for creating the infrastructure for 4G. Going by the logic, we believe that this will not be everybody’s game to subscribe to this service initially and may be when more players roll out 4G in India then tariff may come down a little bit.

Let us see in the coming months how 4G makes its marks on the consumers!

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