Growing appetite for mobile data and suggested approach for India

Growing appetite for mobile data globally

Juniper has published it’s latest report on Mobile data traffic forecasts. As per them, the total mobile data traffic will exceed 90,000 Petabytes by 2017. What is more interesting is that 60% of this data will be offloaded to Wi-Fi networks and only 40% of the data generated by mobile devices will be carried through the cellular network by 2017. The report also emphasizes the roll that the small cells are going to play going forward.

Mobile data growth – Indian scenario

India today is on the verge of data revolution and in the current decade, data will transform the Indian telecom industry the way voice did in the previous decade. Indications are that data contribution from 2G will continue to rise, and 3G and LTE adaption will augment this growth. while the telecom industry in the rest of the world obtains 35-50% revenues from non-voice services, India derives only ~15% of sales from non-voice/ data services. Projections by UBS for major telecom players in India indicate that the non-voice revenues are going to be ~30% of total revenues for these players by 2020. These projections may well be surpassed if India is able to achieve a good broadband penetration backed by the recent policy pronouncement on National Broadband Plan.  As against the current broadband subscriber base of 14.68 million, the National Broadband Plan envisages provision of 160 million broadband connections (22 million DSL, 78 million cable and 60 million wireless broadband) by the year 2014. It is likely that the share of wireless broadband may be much more than the expectations as, like other countries, in India also; the data revolutions will piggy back on wireless broadband. 3G and Broadband Wireless Access (BWA) are expected to aid the growth of economy by boosting broadband growth.

Nokia Siemens Networks (NSN) M-Bit report indicates that mobile data usage in India has grown at 54% growth in 7 months and is likely to double every 12-14 months. This report can be accessed at http://www.nokiasiemensnetworks.com/sites/default/files/document/india_mobile_data_-_mbit_index.pdf . Evolution of data services in China provides some insight for the potential for the data segment growth for India. Data service revenue constitutes 30.6% of total service revenue in China as compared with 12.6% in India in FY11, giving an indication for strong data services growth trajectory in India in coming years. Credit Suisse estimates that over the next three years, data could more than double in size to a US$14 bn industry in India, contributing over half the incremental industry revenue and add 500 bp CAGR to an otherwise slowing voice industry. They estimate 3G’s contribution to mobile EBITDA to rise to 9-13% (from less than 5%) by FY3/14

Wi-Fi offload – a solution to handle growing data volumes and speeds

No doubt more and more carriers are adapting to Wi-Fi. Recently AT&T had inked a pact with Boingo - one of the leading Wi-Fi service provider having more than 600000 Wi-Fi Spots around the globe. Going forward the carrier-Wi-Fi adoption will be gather speed mainly because of two developments –

a)   NGH (Next Generation Hotspot) and Hotspot 2.0 specifications along with 5GHz enabled devices.

b)   Carrier-grade small cells along with Wi-Fi will enable high levels of capacity and along with the macro network will provide commercial and financial success to the operator.

Now what’s there for India in all this? Ironically, there are not many Wi-Fi hotspots in India currently. Given that almost one-sixth of the world's mobile subscribers are in India and that the country is already spectrum starved, in future offloading the mobile traffic on Wi-Fi is the only feasible and practical solution to cater to the growing hunger for data services.

ITU studies and other major research firms have already pointed out that the data requirements of future can never be met by increased availability of spectrum even if spectrum efficiency improve considerably. India cannot rely on vacation of frequencies by Defense ministry as the chances of this happening are remote. And even if this happens it will be a slow process. Thus demand and supply of spectrum in India will always have wider gaps than in other countries.

India specific approach – A Public Wi-Fi hotspot network

In such a scenario, it becomes important for the India to have a large number of Wi-Fi hotspots in almost all major cities and towns. There are two ways of doing this. The first way of approaching the problem is that the market is left to itself and the telecom operators or third parties like Boingo creates a Wi-Fi hotspot network. However the problem in this solutions can be  -

·         - The commercial criteria and not the country/public good at large will drive the hotspot creation

·         - All operators will target the same places for hotspot creation like Airports, bus and railway stations, big malls etc. They will end up creating duplicate infrastructure and in process may not get the return on investment. India missed the bus while the mobile towers were being erected and this resulted in sheer waste of resources by way of creating redundant infrastructure. All operators invested in mobile towers at same time and at same spots.

·         - Such approach slows down the rural penetration as all operators are busy spending their money in big cities. At least for Wi-Fi, we can eliminate this approach.

This leads us to the second and more practical approach of policy intervention to ensure that a common Wi-Fi network is created across major cities that can be shared on payment basis by all operators. This will help in savings on one hand and better ROIs on other. An added advantage can be faster rollout even in tier II and tier III cities. The Bharat Broadband Nigam Limited (BBNL) had been created by Government of India to roll out a common optical fiber network that can be shared across telecom service providers. On similar lines, BBNL can also be entrusted to create a common Wi-Fi network funded through USO. However, the entity will be able to make money once the Wi-Fi network is used by telecom operators. A Wi-Fi hotspot requires back-end connectivity, preferably on fiber so as to ensure that large numbers of users are supported by the hotspot at higher speeds. Suggested approach will ensure that BBNL will identify Point of Presence (POPs) for optical fiber as per the hotspot requirements. If implemented, such a solution can not only help in solving the spectrum crunch, but will also help Indian citizens to get higher broadband speeds at affordable prices – an objective that the NTP 2012 envisages to meet.

Wi-Fi market will reach US $ 5.6 billion in revenues by 2012 ?

If market research report released by Telecom Trends International is to be believed then Wi-Fi is poised for widespread adoption in both consumer and enterprise market segments over the next six years. The report says the overall Wi-Fi market will reach US$5.6 billion in revenue in 2012.


Report anticipates - The industry adoption of 802.11n Draft Specification 2.0 will be a major factor in the growth of Wi-Fi. The specification will allow equipment vendors to transition to the final 802.11n standard next year through software upgrades. Offering end-user data rates of well over 100 Mb/s, 802.11n more than quadruples the speeds of Wi-Fi networks. With increasing Wi-Fi adoption in the enterprise market, revenue in the enterprise space will surpass that in the consumer market over the next six years. 802.11n will herald a networked home where multimedia networking will be the norm.

The implementation of Unlicensed Mobile Access represents the first step in fixed mobile convergence and the adoption of IP Multimedia Subsystem will give impetus to this convergence. According to the report, end-user devices are increasingly both voice and data enabled, and are becoming dual-mode, supporting both Wi-Fi and cellular networks. During the forecast period of this report, voice and data roaming between cellular and Wi-Fi networks will become seamless.

International Roamers can avail VSNL's wireless broadband services in India

Prateek Pashine, vice president (marketing and technology) has reported to media that Tata Group company VSNL is all set to provide roaming wireless broadband services to international travellers during their stay in India. The service will allow seamless roaming and usage within the VSNL wireless broadband network in India wherein visitors can access high-speed wireless broadband using their home country account and identity. As part of the rollout, VSNL has partnered with StarHub, Singapore's second largest info-communication company. This will allow all StarHub customers - whether mobile, broadband or cable - to use wireless broadband service at over 200 Tata Indicom Wi-Fi Hotspots across India. Other global Wi-Fi operators will soon be added to the list of roaming partners. VSNL, a global communications services provider, is the only Indian member in the Wireless Broadband Alliance (WBA) - a global consortium of the world's leading wireless operators.

Hot spot market getting hotter - McDonalds working on turning its 4,000 locations into hot spots

According to ABI Research, the global hot-spot marketplace is set to grow by nearly 25 percent in 2007. By the end of this year, there could be nearly 180,000 hot spots situated around the world, with the Asia-Pacific marketplace going from simmer to boil.
While some 72 percent will be located in North America and Europe, the Asia Pacific region is growing rapidly. Despite China being slow on the uptake, Asia Pac as a whole will come close to matching the number of North American hotspots by 2012.

Europe continues to be the market leader, boasting more than 70,000 hot spots.
ABI points out that one major driver of Wi-Fi hot spots is retail establishments, with McDonalds working on turning its 4,000 locations into hot spots. The growing Wi-Fi hot- spot market is fueling a demand for Wi-Fi access points. More than 900,000 access points will be shipped this year specifically for use in hot spots. Not only are hot-spot and subscriber numbers growing, we have observed a dramatic increase in the number of Wi-Fi sessions per subscriber. This means subscribers are connecting more often to check their e-mail and surf the Internet.

With almost 46,000 hotspots world wide, the hospitality industry continues to embrace Wi-Fi, and ABI Research believes voice-over-Wi-Fi will become an attractive choice for many major hotel chains, both for guests and for staff. Boingo and Wayport reportedly are working with handset manufacturers to help ensure Wi-Fi-enabled phones will function at these two operators' hot spots, even though they might not have the Web browsers normally required for authentication.
In addition, many hospitality operators are using their Wi-Fi networks for internal communications as well as for public hot spots for guests; for example, some hotels are using "Star Trek"-type communicator devices made by Vocera to keep in contact with employees. Carriers will have to adjust their business models to deal with consumers who will trade expensive cellphone minutes for free voice-over-Wi-Fi calls via hot spots.

Ericsson all set to dominate the wireless broadband market

Ericsson has launched close to a hundred HSPA networks across the world. HSPA has been established as the preferred technology for mobility and wireless broadband.
With some 125 HSPA enabled devices, including some 50 HSPA mobile phone models, Ericsson is today managing networks with more than 100 million subscribers.

5 Gbps transmission rate tested in 4G by DoCoMo

NTT DoCoMo announced Friday (9th Feb 07) that it achieved a maximum packet transmission rate of approximately 5Gbps in the downlink using 100MHz frequency bandwidth to a mobile station. .The field experiment of fourth-generation (4G) radio access took place in Yokosuka, Kanagawa Prefecture on December 25, 2006.
DoCoMo has already tested a maximum speed of 2.5Gbps on December 14, 2005.
The 5 Gbps speed was achieved by increasing the number of MIMO transmitting and receiving antennas from six to 12 each, and by using proprietary received signal processing technology.As compared with the December 14, 2005 test, the frequency spectrum efficiency, or the ratio of data transmission rate to channel bandwidth, was also doubled from 25bps/Hz to 50bps/Hz (5Gbps/100MHz).
The caveate as of now is that the test was done for mobile station moving only at speed fo 10km/h

Does WiMAX has a big future?

I have been writing on this blog about the growth of WiMax and have given lot of latest figures on no. of WiMAX users. But a recent major analytical study has concluded that, despite all the hype, the technology being marketed as WiMAX is going to be just a niche player in the mobile wireless market over the next half decade. I would like to hear your comments on this -
The latest study, by Arthur D. Little, compares High Speed Packet Access (HSPA) and WiMAX, and concludes WiMax will capture "at most 15 percent of this network equipment market and perhaps 10 percent of mobile broadband wireless subscribers by 2011-2012."
Other research houses including Strategy Analytics, which recently estimated that WiMAX would win at best 6 percent of the world market by 2010, also have similiar opinions. The findings of study are based on interviews with 31 HSPA and WiMax equipment vendors, operators running the networks, government regulators and financial investors around the globe.
"The momentum in HSDPA deployments has been stimulated by competition from other broadband wireless technologies and by the prospect of competition from mobile WiMax," says Michael Natusch, head of Arthur D. Little's UK TIME (Telecoms, IT, Media and Electronics) practice. "However, there is as yet no convincing real-world evidence of the actual relative performances of these technologies in large scale deployments. Nevertheless, it is likely that these two technologies will achieve comparable levels of performance in typical real-world situations, contrary to the notion that mobile WiMax should be regarded as a 'killer' technology."
In mobile WiMAX's favor, Little in its study does note that "WiMax systems are expected to achieve significantly greater theoretical peak data transfer rates when deployed than today's commercial HSPA networks deliver now." It cites thoretical speeds of 16.8 Mb/s in urban areas compared to 2-3 Mb/s for HSPA. A bigger issue, though, it says is that "the coverage a WiMax base station can achieve, is substantially lower than HSPA, hence HSPA operators will be able to deploy a smaller number of base stations and sites to cover the same geography." The result is that "radio access network Capex for current WiMax technology can significantly exceed HSDPA capex."
That issue may be a WiMAX-killer, because "an HSPA operator will be able to match its growing investment more clearly to the development of demand than mobile WiMax operators who will have to install more cell sites at the beginning to ensure coverage."
Looking further out into the future, and the battle between Mobile WiMAX advocates the HSPA community and its 3G LTE, Little isn't making any solid predictions. "The long term future relative roles of 3G LTE and mobile WiMax, both of which face major development hurdles before they achieve the full promise of new, so-called 4G systems, is uncertain and will be influenced by continuing expected shifts in the priorities and competitive alignments of major players in the wireless industry which has undergone a number of consolidations in recent months," Little concludes.

Source - Telecomweb

265 million wireless users in India by 2010

India's adoption of wireless communications is moving faster than anticipated, with predictions spiking to more than 265 million users by 2010 from more than 100 million today.
According to research firm In-Stat, the subcontinent's wireless carriers will continue to rake in profits, even though Average Revenue Per User (ARPU) levels have declined significantly and that downward trend is expected to continue, due to intense competition. The list of rivals includes Bharti Airtel, BSNL, Reliance, Hutchison and Idea Cellular (which is shopping its IPO around . Combined, these players accounted for about 84 percent of the subscriber base in 2005. The company says ARPU in India is one of the lowest in the world and could fall to $5.60 by 2010.

Source - Telecomweb

Future of Wi-Fi in India

The Wi-Fi Alliance, in partnership with Tonse Telecom, released a 60-page report "The Future for Wi-Fi in India: Opportunities and Challenges," outlining the emerging Wi-Fi ecosystem in India. The group predicts that as laptop adoption and broadband penetration increase, Wi-Fi will experience the wide adoption already seen in other markets.
Key findings in the paper include:
>>As broadband wireless access grows, the WLAN network gear sector will exceed $275 million by 2012 (not including embedded chips), up from the current $23.1 million.
>>The combined Wi-Fi market (described as consisting of WLAN networking gear, systems integration and professional services but not including embedded devices and laptops) is expected to exceed $744 million by 2012 (CAGR of more than 61 percent).
>>Hybrid Wi-Fi and WiMAX deployments are bringing broadband connectivity to previously unconnected rural and urban areas alike.
>>Dual-mode Wi-Fi /cellular handsets show promise for bringing higher-throughput Internet connectivity to numerous Indian citizens who don't own computers.

New frontiers - Broadband over Power-lines

Broadband over Power Lines, also known as the "third wire" for delivering broadband communications to users, has been gaining traction on a global basis. Since, more than 100 trials in 40 different countries worldwide have confirmed the viability of BPL technology, and visiongain sees the technology building momentum. Find out what market impact BPL will have by buying this latest visiongain report, "Broadband over Power line: Challenging existing broadband dynamics".
One of the advantages offered by BPL is that the technology will help stimulate new competitive market dynamics by introducing a new means of broadband access that does not require the building of an entirely new infrastructure.

BPL has been hampered by concerns over interference and the lack of standards necessary to drive it forward. But recent developments point to these problems being resolved. Visiongain believes the questions of BPL-caused RF interference have recently begun to be answered satisfactorily. Further, movements by various global standards bodies promises to boost the market.

The ubiquity of electric power lines as the means of providing access to the Internet is of particular benefit in rural areas, where the biggest promise lies for BPL. But visiongain warns that unless governments are willing to subsidise the substantial infrastructure costs required to enable a BPL system, the technology of providing broadband access over power lines may not be economically viable in these areas.
In urban areas, BPL's timing is critical, because it must compete in a very competitive marketplace, one in which legacy players have not only established a firm foothold, but are beginning to offer triple-play services, giving them differentiation and a competitive advantage. For BPL to succeed, it needs either a significant difference in service or price between BPL and existing broadband methods.

Source electronics.ca publications

WiMAX market picking-up

WiMAX has captured significant attention in the marketplace. Investors, service providers and regulators show interest in the opportunities that the technology creates for offering fixed, nomadic, and ultimately mobile broadband services. WiMAX is emerging from a legacy broadband wireless market that consisted of proprietary and, more recently, standardized fixed services (IEEE 802.16.2004) into one that offers a standardized mobile-capable technology based on the IEEE 802.16e or equivalently the 802.16.2005 standard. Companies such as Intel promote WiMAX, aiming to couple it with Wi-Fi and embed the technology in consumer electronics devices.Globally, there is significant WiMAX licensing activity, with the lion’s share of spectrum being allocated in the 3.5-GHz bands. Much of the activity is occurring in Europe, the Middle East, Africa and part of Asia-Pacific. Debate continues regarding WiMAX licensing in markets such as China and India, but mature markets such as Korea are focused on the early adoption of mobile WiMAX technology under Wireless Broadband (WiBro), which is touted as a early market profile of 802.16e technology. In North America, Sprint’s announcement to aggressively roll out mobile WiMAX (802.16e) has bolstered overall industry confidence in the future of WiMAX in mature markets. As with Korea Telecom, Sprint plans to capitalize on mobile WiMAX technology with the goal of proliferating broadband services on consumer electronic devices.WiMAX subscribers will increase worldwide from 3.40 million to 27 million between 2006 and 2011. This forecast includes both 802.16e, and pre-802.16e subscribers, which use proprietary broadband and wireless access and 802.16.2004 technologies. By 2011, of the total number of WiMAX subscribers, 25.10 million will be using 802.16e.International network infrastructure investments for WiMAX will increase from $550 million in 2006 to $3.90 billion in 2010 as service provider deployments accelerate. The network implementations of WiMAX will differ from those of traditional telecom networks, with the differences being low-cost, IP-centric transport architectures and a design emphasis on the delivery of media and applications as opposed to traditional communications

Source - Marketresearch.com

Multi-billion-dollar investment plans in Indian booming telecom market

Indian phone giant Bharti and Swedish telecoms equipment maker Ericsson announced investments totalling 2.5 billion dollars in India's "phenomenally" fast-growing telephone market.
Bharti Airtel, India's largest private phone company, invested two billion dollars in the financial year 2006-07 and "plans a similar investment in 2007-2008," mostly targeting rural areas, a Bharti spokesman said.
Ericsson, meanwhile, said it would invest 500 million dollars over the next five years in India -- and possibly more -- to exploit growth in the sector.
top.

"We will be investing 100 million dollars annually for the next five years," Mats Granryd, managing director of Ericsson India, said on the sidelines of a conference in New Delhi.
"The figure could go up depending upon the growth in the sector," he said. "This (market) is growing phenomenally and I do not see an end to it."
The investment announcements came days after the Telecom Regulatory Authority of India said the total number of telephone subscribers in India had hit 189.9 million, of which 149.5 million were mobile customers.
Teledensity -- the number of telephones per 100 people -- rose to 17.16 in December 2006, from 11.43 in the same month in 2005, the agency said.
"There was a steep growth of 50 percent in teledensity in 2006" and "an almost 100 percent increase in teledensity since 2004,"
India added 6.48 million new mobile subscribers in December, making it one of the world's fastest-growing mobile markets.
"India's mobile subscriber base is increasing phenomenally every year -- one customer is added every second"By 2010, India will have more than 500 million mobile subscribers from the current base,"

Indian Telecom Market - Status as on Dec 2006

The Indian telecom market growth is accelarating. please look at the following figures
- 6.48 million Wirless Subscribers added in December 2006.
- Yearly subscribers growth reaches new milestone.
- More than 65 million telephony subscribers added in 2006
The wireless segment added 6.48 million subscribers during
December 2006 as compared to 6.80 million in Nov. 2006. At the end of
December 2006 total wireless (GSM, CDMA and WLL-F) subscribers were
149.50 million.
The wireline subscriber registered a negative growth of 0.08 million
in December 2006 resulting in net addition of 6.40 million subscribers as
compared to 6.75 million during December 2006. The wireline subscriber
base reached 40.43 million at the end of December 2006.
The gross telephony subscribers in country reached 189.93 million
at December 2006 as compared to 183.53 million in November 2006. The
overall tele-density reached 17.16% in December 2006 as compared to
16.60 at the end of November 2006. The tele-density in December 2005
was 11.43 and thus there is steep growth of 50% in tele-density during the
year 2006.
The net addition of wireless and fixed line subscribers in the first
nine months of FY 2006-07 is 49.61 million, which is almost twice as
compared to addition of 26.37 million in the corresponding period of FY
2005-06.


Subscriber Growth in 2006
A comparison of annual additions of subscribers for the previous
two years shows that total additions of subscribers during 2006 is almost
twice the additions in the year 2005 and about thrice that of 2004. There
is an increase of almost 100% in teledensity in two years from 8.62 at the
end of December 2004 to 17.16 at the end of December 2006.



Broadband (> 256 Kbps download) Growth:
Broadband connections have continued growth since beginning of 2006. At
the end of December 2006 total Broadband connections in the country have
reached 2.10 million having addition of 0.1 million during December 2006.
The additions during first nine months of current financial year is 0.75
million as compared to 0.72 millions during the corresponding period in the
previous financial year. The total increase in Broadband subscribers from
January to December 2006 is 1.20 million as compared to addition of 0.85
million during 2005.