Recently, 3G auctions have started about in India. After x1000 crores, or several billion USD investment by providers, my concern is whether providers would have any money remaining to roll out 3G services. From my rule of the thumb calculations, if a provider spends 750 million dollars in getting the licence, roughly, he would need another 2x or 1.5 billion in network wide investment to create the infrastructure. Even if the provider were to leverage the existing 2G or lower infrastructure and in addition just add 3G equipment only on a grow as you earn basis, it would still mean about a billion or so in investment for the equipment alone. The sad part is that most of this billion dollars of equipment investment would have to come in play within the first 1-2 years of deployment to make some business sense and lead to a market share of proportional value. Given the current situation that private players in India are in, it will hence be unlikely that we will see quality 3G services being rolled out in the short future. It is of course a different matter, that 3G itself will not be useful due to the high price points and the high population density.
What this means is that the ROI on 3G is likely to be minimal, and if anything, would be a deterrent for the introduction of new technologies.
In such a situation the money spent in procuring licences will go waste - the only way to recover some of it, would be to continue the phenomenal growth of voice services and roll those over in the 3G part of the spectrum as well!!
