How many 3G service providers does India need?

If one has to believe the communications ministry then we could have 12 providers of 3G services. Each of them will have 5 MHz of spectrum. Nowhere in the world are there so many 3G operators. While Australia has six, the UK has five. If this happens then all the big 2G operators will be in a position to get spectrum . Add to that international service providers who are looking to get a slice of the India action.

But in most other countries, operators get a minimum of 15 MHz at one go. It does not augur too well for 3G services. What is likely to happen is that once the global players get 3G spectrum, they will look to acquire operators who have 2G spectrum already. That way, they become full-scale operators. It is also a great way for some of the new licencees to exit. But for that to happen, the government must go ahead and amend the M&A guidelines that insist on a three-year moratorium. If that gets reduced, we could see a re-alignment of the Indian telecom space.

For now, it is still in the realm of speculation. But do not be too surprised if things change rapidly. After all the Left is out of contention. This is just the right time to push through a load of reforms in the sector.

Mobile growth to taper off after 2010

Well, the June subscriber numbers are in--all of 8.94 million new mobile users. So in the first half of 2008, India has added 53.24 million new mobile subscribers. That leads to 286.86 million mobile subscribers. At this rate there should be 300 million mobile subscribers at the end of August.

Can we sustain this kind of growth? As things stand, we can do this through 2009 and into 2010. That is when things should start to slowdown. By then there will be 500 million plus mobile subscribers. It would mean a mobile penetration level of 45-50%. That's almost double of the current 24.94%. I do not think that India will overtake China in mobile subscribers.

China has three people per family as opposed to India's five. At two phone per family (for both parents) that works to a penetration level of 66.67%. India will settle at a penetration of 50%. Unless there is a sea change in the people's income it is unlikely to go much beyond that number.

But telecom industry officials argue that it is possible to touch a 75% penetration. For that to happen, we need income levels to rise sharply in the low income and poor India. That remains to be seen. But a 600 million subscriber base is quite achievable. Anything after that will be a bonus.

ASUS is already in India

The iPhone is now round the corner in India. Both Bharti and Vodafone will be marketing the phone. That's a clear difference from the United States where only AT&T subscribers can have an iphone. But, hey at Rs 8,000 for a phone, it comes much below the Nokia N series. So expect all and sundry to be carrying an iphone soon. So much for exclusivity.

But, while the iphone comes with a lot of big bang and advertising, Taiwan's ASUS has made a quiet entry with some print advertising to support it. The ASUS PDA phones have been around for a few months. According to Edward Wang, head, mobile communications ASUS Technology: "The Indian PDA market is huge and growing very fast." This year, India will purchase an estimated 350,000 PDA phones. that is expected to hit 600,000 in 2009.

While the current set of PDAs in India are targeted for the male user, ASUS will soon launch PDAs in pink and white for the women users. ASUS is estimated to invest close to Rs 20 crore in India over the next couple of years.

ASUS has seven models and five service centres in India. Wang points out that the real competition for ASUS comes from HTC and iMate. According to him, iphone is a threat but not a huge threat.

But, the real business for ASUS is motherboards. Soon once should hear more of ASUS in India.

The MTN saga

It's been a while since i have been around. In the meanwhile, there has been a lot of action over South African telecom operator MTN. First it was Bharti, who then decided against it. The we had Anil Ambani-led Reliance Communications trying to woo MTN. After almost two months, when it seemed to be happening, elder brother Mukesh Ambani threw in a googly.

But what i simply cannot fathom is why is MTN such a hot property? It is ironical that both Bharti and Reliance would have ended up being subsidiaries of MTN. Agreed it is present in 21 countries. But that also includes places like Sudan and Afghanistan.

But be prepared for more news on Indian operators looking to expand their footprint globally.