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Indian Telecom Story (Part XXXb): The case for Telco viabilities

Posted in Industry updates by Manas Ganguly on May 21, 2010

Continued from earlier post: Indian Telecom Story (Part XXXa): 3G a near Reality

The 3G spectrum winning bids are under the microscope because of the huge drains on the Telco P&Ls and there is a lot of debate about how and why the costs that the Telcos have brown to get a 20 year stake in 3G Spectrum are unjustifed. This post tries looking at the costs and the accruals from a long horizon perspective.

High Tariffs and Low Returns
Doubts exist whether 3G services will prove to be a big money-spinner and ease the pressure on the sector, and some experts cite the experience of developed western markets where 3G services are only now starting to gain traction despite being around for at least five years.
The fear of higher prices is misplaced. The higher spectrum charges are sunk costs. Economists remind us that in a competitive market, such costs cannot be passed on to customers. A mobile company cannot attract customers if its tariff is not competitive. In India’s telecom market, raising prices will require a level of concerted action difficult even in simpler markets with fewer players.

Accrual of Benefits
The benefits of 3G spectrum will become even more pronounced once mobile number portability (MNP) is implemented. The presence of 3G offerings will allow operators to retain their premium subscribers and attract subscribers from competing networks; ARPUs for these subscribers are nearly four times the industry ARPUs, resulting in significantly higher profitability.

The Road ahead
The winners will be awarded spectrum in September, which means rollout of 3G services will be possible only by the end of 2010 or early 2011.For at least the first year, the main focus is expected to be on improving call quality. 3G uptake in India is expected to be slow in the initial stages as 3G handsets are costlier than 2G handsets.
Initially, the 3G spectrum to be primarily used for voice services, enabling operators to address the spectrum shortage that characterises the sector today. 3G technology, which is at least twice as spectrally efficient as 2G, will enable operators to service more subscribers with the available spectrum, without compromising on quality of service. This is critical given the lack of clarity on further allocation and pricing of 2G spectrum. However, the commoditised nature of voice services provides little scope for operators to differentiate in this arena. Therefore, to gain an edge, players will gradually leverage 3G technology and provide differentiated value-added services such mobile TV, videoconferencing and high-speed internet browsing. This will enable them not only to improve their ARPUs, but also to ease the pricing pressure that they face on account of intense competition in 2G services. 3G will also help operators reduce network congestion, and thereby cater to more 2G subscribers as well.

A new dimension to TVs: Google TV

Posted in New Technologies by Manas Ganguly on May 21, 2010

TV meets Web. Web meets TV.

This is a successor to the first post on Active TV and Android.

4 billion people across the world watch TV and it was time before TV became a more active medium than the passive one way medium that it is presently. Not only does this give a new dimension to TV but also helps it counter the fight from the entertainment experience from phones and computers. The main reason why TV lags Phones and Computers is because of the lack of the Web. With the web, finding and accessing interesting content is fast and often as easy as a search. But the web still lacks many of the great features and the high-quality viewing experience that the TV offers.

Google now strides into this green space fusing the experience of Live TV and the best of Web in one seamless experience. Thus the TV invades the Personal computing and laptop computing space and provides a two way experience including favorite video, music and photo sites.

Google TV is a new experience for television that combines the TV that you already know with the freedom and power of the Internet. The Google TV will be powered by the Google Chrome which will allow access to user’s favorite websites and easily move between television and the web. This opens up TV from a few hundred channels to millions of channels of entertainment across TV and the web. The television is also no longer confined to showing just video. With the entire Internet in the living room, the TV becomes more than a TV — it can be a photo slideshow viewer, a gaming console, a music player and much more. Google TV uses search to provide an easy and fast way to navigate to television channels, websites, apps, shows and movies.

This possibly is just scratching the surface in Active TV viewing. Basis the Android and Chrome Open Platforms, Web Developers may have to re-define the internet experience altogether and design content and apps especially for TV viewing. Google is making available the Google TV SDK and web APIs for TV so that developers can build even richer applications and distribute them through Android Market. It is also in strategic alliance with and Rovi at the leading edge of innovation in TV technology for providing semantic search, personalized recommendation, guide applications and social features for Google TV across all sources of premium content available to the user.

Google has also commented that they are in talks with Logitech and Sony to put Google TV inside their Televisions, Blue Ray players and companion boxes and is aiming to hit the market by Spring 2010.

This is an incredibly exciting time — for TV watchers, for developers and for the entire TV ecosystem. By giving people the power to experience what they love on TV and on the web on a single screen, Google TV turns the living room into a new platform for innovation.

Watch this You Tube Tutorial on Google TV

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