OnMobile, CanvasM, Comviva are some of the firms gearing up with offerings for the increased spectrum

With the Union government promising to auction high-speed third generation (3G) air waves to private cellphone operators by the end of the year, mobile value-added services (VAS) firms are gearing up with offerings tailor-made for the increased spectrum.

OnMobile Global Ltd is planning a citizen journalism portal, CanvasM Technologies Ltd will offer a video portal and video calling services, Comviva Technologies Ltd will introduce video ring back tones and video mail, and California-based Qualcomm Inc. is set to launch a low-cost computer that will use 3G spectrum to connect to the Internet.

High-speed access: 3G services, promised before year-end in India, will allow cellphone users high-speed access to the Internet so they can download data-heavy files faster than on current networks. Lluis Gene / AFP

The 3G services will allow cellphone users high-speed access to the Internet so they can download data heavy files such as music and videos faster than in current networks, as well as use their mobile phones for applications such as video conferencing.

Though state-run telecom operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) started rolling out their 3G services in New Delhi and Mumbai in May, the much-anticipated auction of the spectrum to private players has been delayed several times over differences on the reserve price.

A. Raja, Union minister of communications and information technology, said soon after taking charge earlier in June that 3G auction will definitely take place by the end of this year. Once available, the high-speed spectrum will throw open various new business options.

Bangalore-based OnMobile Global, for instance, has developed a technology that will allow subscribers to shoot a video or a photograph and upload these on a citizen journalism website with a voiceover, in minutes rather than in hours.
The firm is in talks with some media houses, which would regulate the content, to launch the portal. The same technology will give users options to share the photographs and videos with friends or upload these on social networking websites."Today a person takes a photo or a video and it just lies idle on the phone". 3G will see more visual-enabled data gaining traction", said Pratapa Bernard, head of marketing and product management at OnMobile. It will create a market for video-based services that does not exist today.

Some 30% of the cellphones in use in India have camera and video capability, Bernard said. OnMobile is also planning a video portal and another technology that will allow users to backup their photos, music, contacts and other content.
As 3G rolls out in India, there will be a shift in television viewing to the even smaller screen of a mobile phone, says P. Balaji, vice-president, Ericsson India Pvt. Ltd, the local arm of Swedish telecom equipment maker Telefonaktiebolaget LM Ericsson. Ericsson is providing the network infrastructure for BSNL to launch mobile TV.

California-headquartered wireless technology provider Qualcomm has grander ambitions. It plans to launch its low-cost Kayak PC in India, which uses 3G to connect to the Internet, as well as smartbooks�much like smartphones but with larger, high-resolution screens.

Wireless may be the lynchpin to help close the digital divide, where many users first experiences with the Internet will be on a mobile device. Sandeep Sibal, vice-president and country manager of technology at Qualcomm India and South Asia, said by email.

Mumbai-based research house IMRB International estimates the mobile value added services market in India at Rs9,760 crore as at end-June, and sees this growing by nearly 70% to Rs16,520 crore in 12 months as private players starting rolling out their 3G services.

However, though India is the fastest growing cellphone market and has some 400 million mobile phone users, only 13% of the handsets are 3G-enabled, said Deepak Halan, group business director, eTech group, IMRB. He expects mostly the 9-10 million urban cellphone users who regularly access the Internet on their handsets to start using 3G services as the rates are likely to be high and awareness low, to start with.

The other hitch for mobile value added services firms is the revenue sharing model currently in use in India that leans heavily in favour of the network operators.

Under this model, cellular operators take a 60-80% cut of the revenues earned by mobile value added services firms in return for hosting their products, much higher than the 20-30% share operators earn in markets such as Japan and Korea. The 3G technology is unlikely to change this model, said OnMobile's Bernard.

Bharti Airtel Ltd, India's largest cellphone operator, declined to comment on its plans for 3G.

New Delhi-based Comviva Technologie's chief technology officer Anil Gajwani still sees the firm's revenues growing "close to 50% in the first year of 3G being deployed as against (the) current growth rate of 35-40%�. Comviva's platter of video ring back tones in place of today's ad ring back tones, a music download portal and a video portal will be ready in the next quarter, he added, without giving the firm's current revenues.

"With the advent of 3G (in India) we will see VAS companies migrate from text and pictures to video, said Singapore-based Rohit Dadwal, managing director of Mobile Marketing Association Asia Pacific, a global industry forum. Around 18 months ago, when 3G was launched in Singapore, VAS firms jumped on to the increased spectrum to provide live video, video calling and video portals, he said.

Indian firms are already offering 3G services in other Asian nations. CanvasM Technologies, promoted by software services provider Tech Mahindra Ltd and handset maker Motorola Inc., offers its video avatar application-which allows a user to take on the voice of a movie or sports star and send a video message in China, through China Telecom Corp. Ltd.

In India, the firm plans to offer the video avatar application as well as video mail and video calling services, said Jagdish Mitra, chief executive at CanvasM.