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Old July 14th, 2008, 10:07 AM
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Exclamation 3G iPhone in India: TRAI gives jolt to iPhone fans in India!

So you want a iPhone in India. Yes, Apple is releasing the 3G iPhone in India and couple of service providers are supporting it with internet service, et al. But before you can flash your iPhone, read on -->

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TRAI gives jolt to iPhone fans in India!


Bangalore: Though iPhone mania is on its peak, across the globe, Telecom regulatory Authority of India (TRAI) has given another jolt to iPhone fans in India. As TRAI has increased base price of 3G auctions for participating companies, industry experts feel that this would make 3G services in the country costlier, which will affect prospectus of iPhone 3G in India. To experience the 'real iPhone 3G features' to the maximum, it needs 3G networks, which is currently not available in India. But as of now, AirTel and Vodafone who will be launching iPhone 3G here will offer iPhone 3G services through their existing 2G networks. So, when India will see the 3G networks materialized sometime in the future, service providers for the iPhone will switch to the 3G networks. According to an industry source, at that time 3G tariffs will be much higher than anticipated, which will be inevitable for service providers as TRAI has made them to cough up more money for 3G spectrum.

Last Friday, TRAI proposed to raise the base price for operators participating in the auction of 3G spectrum. The base price for 3G services has been revised up wards from Rs.1400 crore to Rs. 2200 crore for a Pan-India license. "Which will certainly affect 3G tariffs in the future," said an Analyst while talking to SiliconIndia.


Because of its higher voice capacity, 3G services will facilitate the delivery of far more cost-effective voice; the Internet and data transport services with much lesser cost than 2G. However, this will happen only if operators do not have to pay exorbitant prices for 3G spectrum. But now the operators who need 3G spectrum need to pay higher base price, which could lead to high costs and tariffs, which in turn completely negate the tremendous capacity advantage that 3G has to offer.

The key to the success of 3G will lie in its price, that is, if it has to become a mass service. It can be recalled that 3G did not take off in the west because of the exorbitant prices attached to its spectrum, which made the service unaffordable and restricted to a niche market.

The Indian consumer is highly price sensitive, as has been amply demonstrated in the case of 2G services, where exponential growth took place as competition increased and tariffs dropped. The same principles will hold good for 3G as well. Affordability of 3G services will be a critical factor in the success of 3G in India.

Airtel and Vodafone announced a tie-up with Apple recently to bring the iPhone 3G to India. The companies already started pre-registering customers for the iPhone 3G, and ever since, offices and blogs have been abuzz with discussions on how Apple's new iPhone 3G will be bundled with two year contract with the service provider, like in the U.S., will fare in the India's mass mobile market.

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