Business Today

Helping hand for 3G

Helping Hand for 3G NTT DoCoMo-Tata Tele tie-up promises to bring many innovative services to India.

Suman Layak | Print Edition: December 14, 2008

Ratan Tata (2nd from L) & Ryuji Yamada (3rd from L): Partners, at last
Three days after Ryuji Yamada, President and CEO, NTT DoCoMo Inc., met the media in Mumbai on November 14, he announced the launch of 3.9G services in 2010 from Macau in China. It’s something that NTT DoCoMo has been testing in Japan since 2006 and is now ready to roll out. Yamada was in India after the November 12 announcement of NTT DoCoMo’s investment in Tata Teleservices, in which the former has agreed to pick up a 26 per cent stake for Rs 13,070 crore. The Macau announcement shows why Tata Tele can look forward to the tie-up with NTT DoCoMo.

While in India, Yamada said that value-added services would be the main basis of his company’s relationship with Tata Teleservices. He made it clear where the future of the mobile telephony market lay when he said that 40 per cent of the revenues of NTT DoCoMo come from data services, that almost 90 per cent its subscribers use the Internet, and that in Macau, by March 2009, 90 per cent of NTT DoCoMo’s subscribers will use 3G services.

Says Prashant Singhal, National Leader (Telecom Practice) at Ernst & Young: “When the lifetime free incoming plans were started in India some years ago, it began as a twoyear plan that was first offered by Tata Teleservices. The company was led by an American, Darryl Green, at the time. So new ideas, even in fast-growing but low-end markets, can come from people who come from a developed market.”

So, what’s the USP of 3.9G services? Already, NTT DoCoMo offers download speeds of 3.6-7.2 mega bits per second to its subscribers and is now looking at speeds of 100 megabits per second by 2009. The launch of 3.9G services or Long Term Evolution (LTE) is targeted at customers seeking even higher download speeds. Yamada said in Macau that the company needs to offer speedier downloads to keep up with the demands of video services by Japanese consumers.

NTT docomo’s promise
• We may see the following services and products in India soon.
• Handsets for kids that can be tracked by parents through GPS
• Waterproof handsets so you can talk even while you shower or swim
• E-credit card, mobile wallet (6.4 million members already)
• E-credit card accepted in 3.4 lakh outlets in Guam and China
• GPS enabled handset with maps and localised search (find a hotel near you)
• Handsets with wellness applications to monitor health and fitness

LTE takes mobile Internet telephony a step ahead of Enhanced Data rates for GSM Evolution (EDGE) and the high-speed packet access (HSPA) technologies that are used today to provide 3G services globally. NTT DoCoMo was among the first companies to launch 3G services in 2001. Tata Teleservices operates on CDMA in India, but it now has a licence to launch GSM services in 20 circles in India. The tie-up with NTT DoCoMo dovetails into the strategy as the latter uses Wideband CDMA, which was developed from GSM.

NTT DoCoMo is also a pioneer in handsets. Yamada said in Mumbai that his company is looking at developing a range of handsets, including those that people can keep with them 24 hours, those that are waterproof and handsets for kids that allow GPS tracking by parents. The company is also working on creating more support for open software platforms like Linux and Symbian.

According to Yamada, the biggest challenge in a developed market is to provide a better and better experience to the consumer, and this entails a lot of investment in network and connectivity. He said the company will be keen to share its experience with Tata Teleservices—especially its experience of technology roll out—and provide the technology for 3G roll out in India. It would also help introduce high-end handsets in India. Anil Sardana, MD, Tata Teleservices, said his company will ask NTT DoCoMo to depute executives to work in India with the company.

Jaideep Ghosh, Director, KPMG Advisory Services, said: “The objective for NTT DoCoMo was surely to get a toe-hold in the Indian market. If you look at the valuation of the company (Tata Tele) per subscriber, it works out to Rs 17,000. It is on the higher side compared to, say, Reliance Communications or the Idea-Spice deal. However, I feel NTT paid a premium for the upcoming GSM venture by Tata Teleservices.”

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