Ronnie05's Blog

Why 3G would be non-starter in Enterprise segment?

Posted in Industry updates, New Technologies by Manas Ganguly on May 17, 2010

The Great Indian 3G auction was worth Rs. 15814.15 crore (for a pan India License) till the last round of billing (172 rounds of bidding over 31 days). This exceeded revenue expectation of Rs. 3500 crore by 352%. The revenues to the government at this price would be Rs 62254 crore against an estimated Rs.35000 crore in the budget 2010-11. However, the question that now comes up is that with spectrum coming dear, will the Telcos be able to provide 3G bandwidth at decent prices to consumers and enterprises.There is already a growing thought that enterprises will not opt for 3G at all.

The initial assumption thats been in the fore front was that 3G will be a solution to all and sundry. It would benefit the dual customer segments: Enterprises as well as Individual Consumers. Amongst the keys apps Social networking is one of the hot favourites for Consumers where as eMail, Connectivity, Video Conferencing and Web Sharing are the bigger enterprise apps. Enteprise adoption of 3G services would also help them to provide large bandwidths across a moving workforce to enable them to work from anywhere and secure access the company internet in lesser time with greater convenience and speed.Financial Inclusion of the masses across the geography and a unified communication service is the community extension of 3G services.

A recent survey by Voice & Data – IDC amongst enterprises found that only 13% of the enterprises seem to be excited about 3G and 87% enterprises were not very enthusiastic about the 3G roll outs. The reason being the better Return on Investement from competing technologies. What enterprises need today is predictability and a clear value proposition which helps them save costs, improve existing customer services and utilize their current investmenets in infrastructure the most.

The concern in adoption of 3G by enterprises is the availability of services uniformly across large areas and cities with consistent quality of service along with cheap tarriff plans. Here the cost factor is important. Too many different frequencies in the 3G spectrum would also drive down the scale and increase the cost of terminals. 3G is mostly about mobility and mobility as an application is not used much by enterprises. They mostly use email and voice which is also supported by the existing 2G networks in the country at very reasonable tarriffs. 3G would make the experience better but a lot of the adoption would depend upon the prevalent tarriffs. The higher order enterprise applications would possibly have to wait for 4G before they become mainstream.

However, the case for WIMAX entreprise led solutions is particularly strong. As against mobile services, WIMAX offfers fixed services within a geography unit with data speeds upto 70MBPS (versus 3G data speed of 15MBPS). The low cost of the WIMAX spectrum and its enhanced features such as security will drive service providers towards enterprise apps and enterprise adoption. The enterprises will also find WIMAX to be more suitable for their needs.

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  1. […] post examines the views in the industry and otherwise debating viabilities. In an earlier post, I had written about how and why 3G would not be a viable alternative for […]


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