Players going slow on 3G ventures

The much hyped third generation (3G) mobile service is unlikely to hit the Indian market this year.

The Centre is understood to have decided to go slow with the plan as leading mobile companies are not keen to invest heavily in new projects.

Several cellular operators have explained to the ministry of telecommunications about their inability to take up projects like 3G at huge costs due to dismal performance of their mobile operations.

Mobile firms feel that they may not be able to take up spectrum frequencies in all circles, excluding metros.

"There has been a delay in offering the licences. The ministry of telecom does not want to create any uncertainties in the market by beginning the auction of 3G licences this year," a top official with Department of Telecommunication said.

Recently, Telecom Commission chairman Shyamal Ghosh told Business Standard: "As of now, our main focus is to complete the offering of fourth cellular licences in the country. Apart from this, the committee on 3G is yet to come out with its recommendations." However, he declined to comment further.

Interestingly, companies like BPL Mobile and VSNL have already announced their intention to enter the 3G services in a big way as and when the Centre offers the spectrum frequencies.

Going by the cost of the spectrum sold in the European Union, many domestic companies will not be able fund 3G.

Worldwide, mobile operators are bidding to corner 3G frequencies that will allow them to deliver high speed access.

The 3G licence lets users access the web at 40 times the existing speeds using wireless devices. By 2005, more users are expected to connect the web using their mobile phones than by conventional methods.

The delay in the 3G services in India also comes in the wake of European firms facing the debt crunch as they injected huge funds to bag 3G licences.

Although firms including Japan's NTT DoCoMo have grabbed licences, several companies are still facing troubles in obtaining 3G handsets.

This will create more delay in 3G services launch in overseas countries, an analyst with Salomon Smith Barney said.