Telenor skips 3G, bets on 'disruptive' 4G technology

MUMBAI: Norway's Telenor is working on technology that will allow it to offer high-speed 4G mobile broadband services with less spectrum than currently needed, skipping 3G altogether in India -a move that some say may disrupt the plans of bigger rivals.
"We are not there yet, but in the future we believe that this might be possible," Hilde Tonne, executive vice president and head of Group Industrial Development at Telenor, told ET. Once the technology is ready and its permit is converted into a unified licence, Telenor's Indian unit Uninor can offer 4G services without buying more spectrum than what it already has in the 1800 MHz band. A unified licence allows airwaves to be used to offer any technology -2G, 3G or 4G.

According to analysts, the ecosystem for offering 4G over the 1800 MHz band (FDD-LTE), which Uninor has, is far more developed globally than the 2300 MHz band held by Bharti Airtel and Mukesh Ambani-owned Reliance Jio Infocomm. While both companies recently also won 1800 MHz spectrum, Airtel has started 4G services in some cities using the 2300 MHz band and Jio is expected to begin next year.

Uninor, which is known for its 'sabse sasta' offerings, may well start a price war for the service since it has the advantage of using its existing bandwidth while rivals have to use airwaves acquired through auctions, say experts.

"This may weaken the business case for bigger players who have 4G plans and airwaves for the next spurt in internet users," said a senior industry official, who asked not to be identified.However, skeptics say the quality of service through such technology is usually very poor. "It is called narrow band LTE, which is a reasonable solution for 4G in India at the moment, but the less spectrum you use, the lower throughput you get," said Sandeep Girotra, head of Nokia Solutions and Networks in In Uninor, which has 32.5 million 2G mobile subscribers in six circles, needs to make a decisive move on data growth in India, given that it doesn't have 3G spectrum and 4G is still some way from broad adoption. The decision to skip 3G is based on its experience in Bangladesh."

In Bangladesh, we had started investing in 3G, but after three quarters of the year, saw it (data revolution) coming much faster; so we decided to stop 3G and phase in 4G," said Tonne.In Myanmar, Tonne said vendors were already asking about wireless data speeds and video downloads."This is a country where there has been no mobile service at all."

Users, she adds, are ready to skip a generation in India and around Asia.In terms of cost, it is better to buy additional spectrum than to set up increased infrastructure to deploy 4G using less airwaves, according to the Cellular Operators Association of India, a lobby group of GSM companies such as Airtel, Vodafone India, Idea Cellular, Reliance Jio and Uninor."These technologies are still in the lab. By the time they will come and be deployed, who knows (the market position)," said Rajan Mathews, director general of COAI.Telenor has more than the technical aspect to contend with. The company cannot offer any service it wants on its airwaves until the Department of Telecom frees them for use, the way it was done for airwaves auctioned after February .

"Now, we have 2G and spec trum is challenging (in India). Technology neutrality is cru cial for enabling new efficient technology choices that delivers devel opment and what the cus tomers want," Tonne said.

The other trig ger for adop tion would be devices. While 3G devices are likely to fall to the $25 (Rs 1,500) mark by 2015, according to Tonne, the 4G ecosys tem may still be some time away .

Telenor has a co-branded phone with Firefox for the Bangladesh market in which it may integrate a 4G chip. The instru ment currently costs $49 (Rs 3,000) and may be sourced for the Indian market if Uninor wishes, Tonne said.