Tuesday 25 January 2011

What will drive 3G in a third world market?

I got inspired to put an analysis after reading the recent article on ET on possible factors affecting the growth of 3G in India. According to ET (Ref: http://bit.ly/dMg79X), the major factors are cheap handsets, content/applications/services, affordability, innovation and network rollouts.

Not sure if its just me, i failed to find anything innovative about the findings from ET. :-) The above reasons ET found have been very much what has driven 3G in the western markets or the rest of the world. Cheap handsets sounds the most convincing among them and is probably the only one which were not so detrimental in the deployment of 3G in the western markets, but application rich handsets were. Most mobile market experts would agree with me that most phone releases during this decade would be smartphones; and the increased competition will ensure an attractive pricing too. So, that is certainly relevant.

Content/application/services, IMHO, wouldnt matter much in the initial roll out once the handsets are cheap. The market psyche is to get the best AFFORDABLE handsets possible, irrespective of the content/services it really support. However, a well packaged mobile broadband delivery mode will certainly be a detrimental factor.

Affordability of services, surely is a factor; again nothing specific to a developing economy; Its just business-as-usual.

Similarly, Network rollouts is inevitable as the operators who has spent billions on 3G license would want to recover the cost as early as possible; or at least make a big attempt to do so.

Last, I quite like the analysis on Innovation. I do think that a growth economy like India will see huge development in the innovation space. However, i do think the innovation would happen over-the-top (OTT) and will be over the mobile broadband services over 3G.

So, to summarise, I think the biggest factor that will drive 3G in India or a developing economy will be mobile broadband. What do you think?