RIL to start 4G trials in Jamnagar soon

Mukesh Ambani’s next big idea — rollout of commoditised fourth-generation 4G telecom services across the country — is taking concrete shape.

After announcing last month that Nagpur would be a hub for its 4G operations, trials are set to begin for services at Reliance Industries’ (RIL) massive complex in Jamnagar next month, in a pilot before the project is escalated nationwide.

An RIL spokesperson refused to comment.

The megacorp is expected to begin rolling out services using the ultra-fast Long Term Evolution or LTE technology.

The company is roping in equipment vendors such as Huawei (which holds 50% of the world’s market share for LTE equipment), ZTE and Alcatel Lucent for network rollout and consumer devices.

Meanwhile, experts said the government may find it difficult to pull off 4G auctions in the next fiscal.

NK Goyal, president, Communications Multimedia And Infrastructure Association of India (CMAI) said 2G auctions are expected to be announced by December and completed by March 2013.

“So 4G auctions are expected to be announced in January and completed in another six months.”

Other industry experts also believe that the upcoming 2G auctions would see 4G auctions getting pushed to mid-next year. Which means the earlier plans of Broadband Wireless operators’ plan to roll out 4G services by mid-2012 will be postponed yet again.

According to comments filed by the company on the Telecom Regulatory Authority of India’s recent spectrum auction consultation paper, RIL has also asked for the reserve price of spectrum to be  about 7-8 times higher than the base price for 3G auctions — at around Rs25,000 crore, which would take the actual price to a whopping Rs50,000 crore. This would make it very difficult for other operators to compete in these auctions, having already burnt their fingers with 3G.

With minimal competition, RIL can take its time to decide on the 4G ecosystem, business model, pricing and services, without having to worry about meeting rollout obligations.

Explains an industry expert, requesting anonymity, “Although it is illegal for RIL to seek roaming arrangements for voice-calling with any 2G operator, global standards for FDD-LTE are to be frozen by July 2012, after which RIL can seek to offer voice services on its own network. Anyway, considering the fact that they have obtained 5 years to roll out broadband services, they have ample time to decide on their 4G game plan.”

4G is expected to provide high-speed internet browsing, high-definition video streaming, voice over LTE, location-based services and data downloads at speeds of up to 100GB per second.

However, mass-market devices for 4G are still a good 2-3 years away, said experts.

Besides, pricing for 4G is expected to be around Rs1,000-2,000 for 5-10 GB per month, making this a niche service open only to large enterprises and very few high-end data customers.

“4G will mostly be marketed as a fixed wireless broadband service, and not as mobile broadband, initially. Cable operators may tie-up with 4G players only if they can offer Wi-Fi access. However, this partnership has not worked in the US,” revealed another industry expert, closely tracking 4G.

Also, considering that 3G has managed to capture only 3% of the total wireless subscriber base according to Trai estimates, 4G is expected to have even fewer takers.

So would 4G then present a viable business case?

Amitabh Singhal, director, Vcon Services, a telecom consultant, said before launching 4G, operators need to be clear about the business model - in terms of network rollout, tariff, services and the kind of customers they are catering to.

“Looking at the global scenario, in India, it will take at least another 3 years to build out a viable 4G ecosystem,” he said.

So is RIL counting its chickens before they hatch? Or does the fact that 3G growth is slowly improving provide some hope of pent-up demand for higher-speed services?

These are perhaps questions that only time - and greater clarity from Trai -will answer.