Dec 03, 2012

Around the World in Nine Blog Posts – Post 7 – India

When it comes to LTE, there may be no market as fascinating to observe as India.

First, it’s a huge market, and anyone who is going to be involved there will be involved in a BIG way.

Second, pricing is a major issue. The pressure to keep costs/prices low is based on necessity. Simply put, if LTE is priced too high, the Indian people will not go for it.

Third, there’s even  a mega-billionaire involved.

Gotta love that …

Today, India has more than 600 million unique mobile users of more than 900 million mobile accounts (Some people have multiple mobile accounts.). In addition, 600 million people in India are below the age of 25, so technology is not a scary thing to a very large percentage of the population.

At the same time, ARPU (average revenue per user) is very much on the low side, at just $3 per month. Compare that with $46.50 per month in the United States, and you start to get an idea for how much pricing pressure there is/needs to be in India.

In short, India is a tremendous market with tremendous opportunity … but pricing must be low to get anywhere.

With that as our backdrop, let’s take a look at the key players that are trying to make an impact in India.

The two large LTE operators in the Indian market today

There are two large LTE operators in the Indian market today, airtel (The company prefers the lower-case “a.”) and Reliance Industries (RIL). airtel owns a 2G network, and has also built out a small 3G network, but is now focusing its energies on overlaying an LTE network. 3G has not been a major success in India, due to the cost, so airtel has decided to basically bypass it and puts its broadband wireless hopes in LTE.

Of course, there is still a lot of market education that is necessary, so uptake of services may not happen so quickly.

RIL is a much more fascinating story, mostly due to the aggressive plans of multi-gazillionaire Mukesh Ambani, the company’s chairman and CEO. He has decided that – even though RIL is not a telecom operator – he is going to build out his own nationwide LTE network. And he’s entitled to do so, since RIL is the sole winner of the nationwide LTE license.

What is so amazing is that this is really the only major “greenfield” LTE implementation in the world. Clearwire tried to do it, and we all know what happened there. So this certainly bears watching. Of course, from a chipset vendor perspective, this is a very exciting opportunity, since whoever is selected will see its chips in literally hundreds of millions of devices almost overnight.

RIL is implementing a TD LTE network, but their devices will, of course, need to be dual-mode TD/FD, since users will need the ability to roam.

We’ve been on the ground in India since 2010, and we disagree with the cynics who talk about the delays in LTE’s rollout there. We actually see some positive signs, and are looking forward to supporting India’s ecosystem however we can.

And oh, what an ecosystem it will be …

-Eran Eshed