In the aftermath of the 3G auctions, India’s telecom sector went into a tailspin that was partly self-made. After all, telcos had made logic-defying high bids for 3G airwaves on borrowed money—hadn’t they—only to realize later that the users were just not willing to pay for their follies. Moreover, there were not enough potential 3G users.
Thankfully, the course corrections by telcos came in not too late. They not only rushed to make the pricing attractive enough for the potential 3G users sitting on the fence, but have also seemed willing to exercise patience and wait for the 3G ecosystem to develop closer to an inflexion point, which is yet to truly arrive.
Essentially, it was like getting back to the basics! Isn’t that’s how the 2G success story had been charted in the first place?
So in the months that followed May 2012, i.e. when telcos had slashed 3G data tariffs in the range of 70 percent to 80 percent, 3G data traffic jumped as high as by 196 percent when measured in December 2012 against the corresponded year-ago period by a Nokia Siemens Networks’ MBit Index study published in May 2013.
Obviously, the 3G data pricing had finally got aligned to demand-side expectations, and the surging uptakes in data usage bore a testimony to that.
That seems to have emboldened telcos,  and they proceeded to slash 2G data tariffs as well, seemingly under the hypothesis that the move could help boost the 2G data usage too.
It is unlikely that the market would disappoint them. In fact, lower 2G data tariffs could bring more users to the mobile Internet fold than 3G could for the coming few years, for the simple reason that the 3G ecosystem would take more time to mature to the point from where the market could take off on its own. And later, it would be about migrating the 2G data users to 3G!
According to estimates, while around 75 percent of all phones shipped in 2012 were GPRS or EDGE enabled, only about 7 percent of the overall shipments were 3G enabled.
The data growth that has happened must have pleasantly surprised the telcos, even if they were expecting it. But then, should they wait for the traffic to first fill their existing networks and maybe even clog it? Well, that wouldn’t be a pleasant surprise for sure.
Indeed, the data growth may be seen as a signal to beef up their data networks, sooner than later.
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