As 2010 ends, all of India’s cellular operators that won 3G spectrum have selected their 3G vendors and have either launched or are looking at launching 3G services. The exception is S-Tel, which has won spectrum in 3 circles, and has not yet announced its vendors.
The following table lists the operators, vendors, number of circles and salient circles awarded to each vendor.
| Operators | 3G Circles Won | Number of 3G Circles Awarded To | |||
| Ericsson | NSN | Huawei | ZTE | ||
| Airtel | 13 | 7 | 3 | 3 | |
| RComm | 13 | | | 5 | 8 |
| Vodafone Essar | 9 | 3 (Mum, ND, Kol) | 6 (TN, GJ, MH) | 0 | |
| Aircel | 13 | 6 (TN) | 3 (Punjab, Kol) | 3 | 1 |
| TTSL | 9 | | 4 | 5 | |
| Idea | 11 | 5 | 4 | 2 | |
| Total | 68 | 21 | 20 | 18 | 9 |
| Abbreviations: Mum=>Mumbai, ND=> New Delhi, Kol=>Kolkata, TN: TamilNadu, GJ=>Gujarat, MH=>Maharashtra | |||||
Observations:
1. The 3G technology selected by all the operators is HSPA/HSPA+ with an upgrade path to 4G. So all the operators are looking to make their 3G investments 4G ready.
2. The share of 3G circles have been split almost equally between Ericsson (21), NSN (20) and Huawei (18) with ZTE (9) lagging somewhat. Alcatel-Lucent has been completely left out; I wonder why. Most of the mature operators seem to have chosen Ericsson or NSN for their primary circles while giving out the relatively smaller circles to Huawei. However Huawei has definitely gained market share in the 3G market. If it can prove its case in these initial rollouts then it may well become the largest wireless infrastructure vendor in the future 3G and 4G upgrades in India.
3. There are reports that the 3G contracts were won at very thin profit margins and that the European vendors (Ericsson/NSN) bid at a matching or lower price than the Chinese vendors (Huawei/ZTE). This marks a turning point in the nature of competition. Cost competiveness also points to the fact that the European vendors may look to support a major part of the 3G operation out of their captive centers in India.
4. The price point of the bids is only one facet of a deal. Vendors seem to have also played a part in facilitating loans for the respective operators. For example RComm has received a loan of USD 1.3 billion from the China Development Bank of which it would spend USD 600 million for the 3G contracts to Huawei and ZTE. Facilitating loans on favorable terms for cash-strapped operators (especially in emerging economies) is becoming a significant differentiator for Huawei and ZTE.
5. The 3G contracts have been completely outsourced with the operators delegating the network infrastructure, planning, optimization and maintenance to the selected vendors. This is a culmination of an outsourcing trend that has been observed in the Indian wireless industry. This is in contrast to the much tighter network control exercised by the Japanese (NTT-Docomo, KDDI) and US (Verizon, AT&T) operators.
