Article Dreaming of A 4G World

[Xen]

The memo, which has been reviewed by The Wall Street Journal, described a fourth-generation, or 4G, wireless service with "99.999%" network availability; "integration with an app store, ours or others" to help smartphone users order fast food or buy movie tickets; sourcing of mobile devices from China and Taiwan; content delivery to "3 screens," cellphones, laptops and TVs; and two 300,000-square-foot data centers.

Reliance's plans cover a large swath of India. It identified 700 cities to target, including 100 high-priority markets, according to a person briefed on the matter. Delhi and Mumbai would be the first big launches, the person said. The effort could cost more than $10 billion, according to estimates by analysts, and it could require setting up tens of thousands of new cell towers. Already, Reliance has spent more than $3 billion to acquire radio spectrum covering all of India. Mr. Ambani also aims to make Reliance a TV provider by building a superfast fiber-optic network stretching into homes in urban areas, according to people familiar with the project.

A large field trial of 4G services is under way in the western town of Jamnagar, site of Reliance's own oil refinery, people familiar with the matter say. And Reliance has started laying down underground fiber-optic cables in parts of India that will connect cell towers to the core network, the people say. Samsung Electronics Co.has emerged as the front-runner in the global sweepstakes to provide 4G gear for Reliance's build-out, the people add, though other equipment companies may get some deals, too.

Reliance's 4G network would be the largest of any outside the U.S. and Japan. India is expected to have more 4G wireless subscribers in four years—37 million—than Brazil, Russia or Indonesia, according to consulting firm Ovum. China is on the 4G path, too, and it is expected to have a much larger user base than India eventually, but it has yet to commence any commercial 4G rollouts.

Reliance 4G Timeline

Dec. 27, 2002: Reliance Group launches a cellphone company, Reliance Infocomm, on the birthday of company founder Dhirubhai Ambani, who had died earlier that year.

June 18, 2005: After a protracted feud, Mukesh and Anil Ambani announce they are splitting Reliance into two. The younger Anil takes the telecom assets. The brothers sign an agreement vowing not to compete on each other's turf.

April 3, 2010: India's Department of Telecommunications releases the list of bidders for the broadband wireless 4G auction. Infotel Broadband Services is one of 11 companies vying for the airwaves.

May 23, 2010: The Ambani brothers agree to scrap their noncompete pact emanating from the 2005 split, allowing Mukesh to enter telecommunications if he chooses. The 4G auction begins the next day.

June 11, 2010: The auction ends and Infotel wins 20 megahertz slices of spectrum in each of India's 22 market areas. The same day, Mukesh's Reliance Industries announces the purchase of a 95% stake in Infotel for $870 million. Reliance Industries goes on to pay $2.3 billion for the spectrum Infotel won.

Dec. 10, 2010: Mukesh circulates a memo to executives detailing Reliance's vision for a near-nationwide 4G wireless network involving state-of-the-art smartphones, an app store, huge data centers, and video content delivery to cellphones, TVs and PCs.

Dec. 13, 2010: Anil's cellphone company, Reliance Communications, by now one of the largest wireless carriers in India, launches 3G broadband service in four cities.

Jan. 3, 2012: Independent Media Trust, of which Mukesh's Reliance Industries is sole beneficiary, announces an investment in Network18, a media company that runs India's versions of CNBC, MTV, Nickelodeon and CNN. As part of the deal, Reliance's Infotel subsidiary gets preferential access to Network18 content.

June 7, 2012: At Reliance Industries' annual meeting, Mukesh tells investors the firm is finalizing plans to offer nationwide wireless broadband services, but provides no details.


Mukesh Ambani Plans Huge 4G Wireless Network in India - WSJ.com

 

[Xen]

Reliance and Airtel face a few common challenges in rolling out 4G, such as putting fiber optic lines in cities to ferry data from cell towers into the core network. Ordinary (2G) cell networks can get away with microwave radio transmissions to handle this task, known in telecom parlance as “backhaul,” but fiber is necessary to process the huge amount of data 4G users will be downloading to stream videos and play high-bandwidth games, analysts say.

One reason that the technology is so expensive is that the frequencies India is using for 4G – the 2.3 gigahertz band – has a limited reach of a mere 300 meters, Rajiv Sharma, an analyst at HSBC Holdings Plc. says in a report. For a company to offer decent pan-India coverage it would have to put up easily 100,000 cell towers, a multi-billion-dollar endeavor.

Another problem is that currently the LTE handsets don’t offer the most basic cell phone use—voice (or the ability to make phone calls), an “essential” function in India Mr. Sharma says in his report.

Also, it could take a few years to develop 4G smart-phones that consumers can afford. Lava International Ltd., a maker of 3G smart-phones, is planning to release a 4G-LTE phone next year. But company director Vishal Sehgal says he expects early 4G handset prices to be around $400 and to take at least two years to fall into the $150 range. “Scale won’t develop for those first two years so prices will remain high,” he said. “We believe it’s important to have a stake planted in the ground.”

Headwinds for 4G - India Real Time - WSJ