Is it okay to pay for iPhone 3G, which will not be 3G for at least a year or so?
Bharti Airtel and Vodafone, both are bringing in the iPhone 3G to India and have started bookings as well. But what no one is talking about right now is that there is actually no 3G in India. And if we look at the promises the telecom department has been making for the past few years, there is no deadline for when 3G will be available in India. So, in a situation like that is it fair for users to pay heavy amount to buy 3G iPhone which will not be able to use the power of the next generation network?
A Non 3G, iPhone 3G How justifiable are the claims of Vodafone or Bharti Airtel of bringing in the iPhone 3G to India? Should consumers fall for that and buy iPhone 3G, which will not be a 3G device? There was a dialogue in Matrix movie where Neo, when arrested by agents, asks for a phone call. Agent Smith says, "How good is a phone call, when you can't speak?'' As he had sealed his lips. So, here one can say, "How good is the iPhone 3G when there is no 3G network in the country?" Nathan Burley, an Australia-based analyst with research firm, Ovum, explains,"There is no other iPhone model to sell so that is the only model available. Apple is pushing the 3G model very aggressively. I think there are a lot of un-locked or cracked iPhone already available in India. But through this Apple will get the Indian market. Well, the iPhone 3G will run on 2G network as well, so you will be able to do a lot of things like the Internet access and other stuff, but the experience will not be that good as compared to running these on a 3G network. Still since iPhone is more about a style statement and the rich interface so at least people will be able to use it and flaunt that."When Will It Be 3G?So, iPhone it is, on papers and technologically. But it is going to take quite a while for Indians to reap the benefits of 3G that the device offers? Looking back at history, there has been more promises made than met. As we are aware that the frequency that 3G networks use was assigned to defence forces in India and it took quite a time to release that frequency as defence forces needed to build the infrastructure to migrate from that frequency. That was followed by the expulsion of the much adored minister Dayanidhi Maran due to some political issues. The change of minister further delayed the arrival of 3G in India. A. Raja, took over as the minister of communications and information technology and after taking his time to settle has started the 3G drive. The government is trying to put things in place by announcing 3G guidelines and policy. There will soon be an auction of 3G spectrum in India, as late as the end of September.Just few days ago Indian government approved the release of one block of 3G Spectrum each to BSNL and MTNL, the two Public Sector telephone service providers. The spectrum blocks released for the two companies have the size of 2x5 MHz in 2.1 GHz Band. “Besides this special consideration for BSNL and MTNL, 3G / BWA Spectrum would be allocated through an auction process to be conducted by a specialised agency. For the Spectrum blocks released to them, BSNL and MTNL will pay a price equal to the highest bid in the respective service areas,” a press statement says.If Your Operator Doesn't Get 3G SpectrumSo, the PSUs already get the 3G spectrum, which leaves the two major GSM players Airtel and Vodafone who have already have deals with Apple to bring the iPhones to India. Then there are CDMA players like Reliance and Tata, so there is going to be a tight fight for getting the 3G spectrum. Though, there are estimates that the two major players Bharti Airtel and Vodafone may get the desired spectrum. Still what if one of the two players, who already announced plans for iPhones don't get the 3G spectrum, how would they meet the promises they have made?"3G will do a lot more than just offering services on the iPhone and other 3G phones available in the market, so definitely there will be limited spectrum for the operators, and as you ask, if someone any of the operators don't get the 3G spectrum, then they will either go for some deals or acquisitions to acquire the 3G spectrum," says Nathan.But the guidelines and policy released by the government clearly discourages such deals or mergers. The press statement says, ”Mergers will not be allowed during the initial five years. No trading/ reselling of spectrum is allowed."The government also wants to ensure no hoarding or under usage of the spectrum, “There will be roll out obligations to avoid spectrum hoarding. If licensee does not achieve its roll out obligations, it shall be given one year to do so on payment of 2.5 percent of its successful auction bid (i.e. spectrum acquisition price) per quarter or part thereof. If licensee does not complete its roll out obligations even within this one-year, the spectrum assignment shall stand withdrawn. The roll out requirements, including rural roll-out, as well as stiff penalties for non compliance of the same has been stipulated,” further says the press statement.So, its going to be a tough time for players in not only getting the spectrum, but also rolling it out efficiently. We approached both Bharti Airtel and Vodafone, but they are tight lipped on the issue.Too Early To Be Too HappyBut don't think that the moment they get the spectrum, you will start using 3G services. It is going to take a long time to roll out 3G services in India. The infrastructure for 3G has to be suild. Ironically, the two PSUs who got 3G spectrum in advance have no prior experience of 3G services. On the other hand Vodafone and Bharti Airtel have good experience of 3G servies as they are already offering services in other countries, so that experience is going to help them build the needed business in India. And closer to home and before India, Airtel will be rolling out 3G in Sri Lanka later this year. So that will work as a testing bed for Airtel to roll out 3G in India. The sad think is if there will be iPhone in Sri Lanka, they will be ahead of Indians in teams of using iPhone 3G's full features. According to leaked reports in media, iPhones in India are going to be manifold costlier – between Rs 30,000 to Rs 36,000 -- than those available in US or UK. In some of the countries iPhones have been subsidised by operators which makes it cheaper. But Indian Indian telecom players are not known for giving subsidies on high-end phones. Now, the question is while international operators cover that cost through services, in India since these are not subsidised so will the services be cheaper? An expert who refused to give out his name says that Indian operators will keep prices higher as compared to international counterparts, even if the phones are not sold at subsidised rates so that will simply mean stealing away from the customer. Nathan feels, “But looking at the popularity of pre-paid services in India, I think there will be more pre-paid services and there can be subsidised iPhones as well in India. ”It took India quite a while to match the International calling rates, which were expensive compared to rest of the world, so it may not be a good idea to think that iPhone services will be cheaper in India, especially when the device is not being subsidised. These are the things we will keep an eye on. International Players Not InterestedThe bad news for auction is the government may not get the expected revenue from the auction as the international players are not interested in bidding for the spectrum, which would have raised the bid. “The worst think is currently no international player in interested in 3G auction of India, reason being the market structure. 2G is very strong in India and it will take up a lot of resources to build up the 3G infrastructure also the business model is not tested, so right now it will be interesting to see how current players take leverage of the infrastructure and presence and build the business. So, in the current situation it is easier for local players to build on top of that. Pricing and presence of many small players in various reasons is another reason for that," says Nathan. To reach to those areas, you need to tie-up with those small players and that can be a tricky business for international players. So many hurdles in the road to 3G. So, when you line up to get your iPhone, don't expect much except the cool device and interface “Yes, that will be a disappointment for users as there is no 3G in India and they will not be able to get the best out of iPhone 3G. They will have to settle with the current network which is of course slower than 3G. However the iPhone has been very very successful every where, owing to the interface and style so same is going to happen in India as well. Even if things will be slower on 2G, still people will be able to use some of the functionality of iPhone. ”Can we say iPhone for India will not be 3G, actually? Nathan laughs at that, “Well until there is 3G network in India, you won't be able to reap benefits of 3G, so in a way you are right. ”Despite the 3G machinery sitting inside iPhone will continue in the state of hibernation like the Indian mythological character Kumbhkaran did unless awakened by some drumbeats and trumpets of the arrival of 3G services in India. But looking at the record, 3G in India seems to be on the track of making and breaking promises -- keeping up that promise is still everyone is waiting for. So, those who do want to line up in front of exclusive stores to get iPhone, don't start feeling yourself part of the elite group of iPhone 3G owners. In India your iPhone will be 3G minus. The D-day, 22 August, is not far. It's just the coming Friday. So will you be going for first day first show or will wait unless prices fall further or the Kumbhkaran of 3G wakes up?