Ronnie05's Blog

Is there a Business case for LTE in India? (Part I)

Posted in Industry updates by Manas Ganguly on October 20, 2011

This post is the first of a two part series on the scenario around LTE network deployments in India.

Ten years of trailblazing performances and more, the Indian Telecom story needs a new super hero. This is necessitated by the demands of the bandwidth starved data hungry customers are placing an inordinate amount of pressure on the spectrum. The Indian government has been instrumental and forward planning to meet the challenges of increased data bandwidths. That is where 4G LTE services hold out a promise to provide super speed technology on high bandwidth spectrum.

Despite the initial success in field trials, a key question facing the operators is the financial viability and the unclear business models surrounding this emerging technology. Though the industry remains gung-ho about the potential of LTE TDD, it is imperative that the industry evaluates certain critical factors to decide on the business case of the technology. Of the 160 million broadband connections expected by the end of 2014, a good percentage is to come from LTE services which is expected to drive 60 per cent of next level mobile broadband growth.

However, post the lukewarm response to 3G, experts believe that operators need to have a viable business model, clear go-to-market strategy and a marketing campaign designed to target specific segments, niches and user segments of the society to make a business case from the soon-to-be launched Long Term Evolution Time Division Duplex (LTE TDD) technology. There has to be a proper strategy in place to make sure that all investment-related decisions (for LTE TDD) are being taken after due consideration. Operators are yet to make 3G a true business case in India, and if proper targets are not set, many operators may find it challenging to survive.

Contrarian to the earlier view, analysts also believe, what works in favor of operators in India is the relative lukewarm response to 3G, which leaves a lot of scope for LTE to make headway. However, on the flip-side, discouraging numbers for 3G uptake is likely to have some impact on LTE roll-out as well. If 3G has been unable to set the mobile broadband segment on fire in the country, what is it that LTE would offer which will make customers embrace it.

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