India will have private sector 3G mobile services in the country starting in November, but analysts doubt that the service will be initially more than a niche service targeted at high-end subscribers.
Operators will be targeting initially about 5 percent to 7 percent of existing mobile subscribers, said Kamlesh Bhatia, a principal research analyst at Gartner.
Most customers will be looking primarily for data access, and in this regard 3G operators may soon face competition from broadband wireless access services that will get rolled out in the country, Bhatia added.
Some operators have set up application stores but they will have to compete with other application providers, including application stores set up by handset vendors like Apple and Nokia. Operators will try to figure out how to make money beyond providing data access, by possibly trying to get a share of revenue on transactions by people using these applications, Bhatia said.
Operators are looking at 3G services to boost revenue even as average revenue per user on voice calls on their current 2G services are falling because of fierce tariff competition.
Tata Teleservices will roll out 3G services around Nov. 5 during the Diwali festival in India, a company spokesman said. Japan's NTT DoCoMo is a key shareholder in the company with 26 percent equity. The new 3G service will be offered under Tata Teleservices's GSM (Global System for Mobile Communications) brand called Tata DoCoMo.
Vodafone Essar, the Indian joint venture of Vodafone Group, plans to roll out 3G services by the first quarter of next year.
India's largest mobile operators, Bharti Airtel, said on Monday that it will launch its 3G services before the end of 2010 in the 13 service areas in which it has won spectrum from the government in an auction in May.
Other winning bidders in the 3G auction have still to announce detailed plans.
Government companies, Bharat Sanchar Nigam and Mahanagar Telephone Nigam, were allotted 3G spectrum by the government ahead of the auction for private operators. Their services launched last year were not a success.
Bharti Airtel, which offers 2G services in 22 service areas, said it will tie-up with other 3G operators to be able to offer 3G services to customers in all service areas.
The 13 telecom service areas for which it has 3G licenses constitute 68 percent of Bharti Airtel's revenue market share, it added.
Tata Teleservices won 3G spectrum for nine service areas in an auction in May. It will roll out 3G services in all service areas at the November launch, the company spokesman said.
Tata Teleservices recently awarded equipment and service contracts to Nokia Siemens Networks and Huawei Technologies. Bharti Airtel has given the contracts for 3G in the country to Ericsson, Huawei and Nokia Siemens.
Most of the 3G rollouts will focus initially on denser urban markets, and move out to semi-urban and rural markets, Bhatia said. This was also the pattern followed by operators while rolling out 2G services.
Private operators paid 509.6 billion rupees (US$11 billion) for spectrum in the auction for 3G services. The highest bid for a service area was in Delhi where a license cost 33 billion rupees.