As Bharti Airtel races ahead of Reliance Jio to announce the commercial launch of its 4G services nationally, we try to decode the technology, and understand the challenges and opportunities it holds for advertisers, publishers and content creators.
The fourth generation mobile technology or 4G, which is making headlines these days in India, promises faster-than-ever-before speeds while downloading files, video chatting, multiplayer gaming, and viewing high-definition videos online. This FAQ-based essay tries to cut through the jargon and helps you understand what 4G is and how it will impact the media and advertising business.
4G stands for fourth-generation radio communication access technology that provides the fastest communication network for accessing the internet at present. It is the successor to 3G and promises 7-10 times faster speed. If implemented across India properly, 4G will reduce vast distances between cities and hinterlands and, thus, will revolutionise communication and has tremendous potential to boost business growth that can help solve the 'last mile' (connecting customers to a network) issue of operators, that is preventing them from getting rural consumers.
How does one access a 4G network?
One needs a USIM (Universal Subscriber Identification Module) which is just like a normal SIM in terms of design, but, instead of the normal 64 KB memory, USIM can accommodate 128 KB through CPE (customer-premises equipment) or WiFi routers, dongles, mobiles and tablets.
In India, 4G access is possible through data cards, dongles and smartphones or tablets.
What is the difference between 3G and 4G?
To begin with, 3G or 2G technologies were designed keeping voice and data in mind, while 4G has been designed keeping data as the main element. To put it in context, if you are downloading a full-length movie (on an average 500 MB) on 2G, you will have to wait for more than five hours, while on 3G networks you will need to spend around 25-30 minutes (if the download speed is 2 Mbps). 4G can cut down this time to five minutes (at a download speed of 10 Mbps).
Are there various kinds of 4G technologies?
There are two types of 4G technology - LTE (Long Term Evolution) and Wi-Max (Worldwide Interoperability for Microwave Access), which can theoretically offer wireless broadband access at speeds of up to 100 Mbps, though the actual speeds will be around 10 Mbps.
In India, all the telecos who have won 4G licenses will offer 4G using LTE technology and the best part is that LTE is backward-compatible, which gives it the ability to switch between 4G LTE and GSM/CDMA networks, depending on the availability.
Who offers 4G services in India?
Bharti Airtel was the first telecom operator to roll out 4G services in India; in April 2012, the country's first ever 4G services were rolled out by Airtel in Kolkata. Airtel has since expanded its 4G coverage and is now offering it in 296 towns of its 14 telecom circles. The company has tied up with Samsung and also with Flipkart to provide an Airtel 4G SIM with the purchase of a 4G phone.
Reliance Jio Infocomm, Aircel, Qualcomm, Videocon Telecommunications and Tikona Digital are among the others who bagged 4G spectrum licenses in India. Ironically, the government-owned companies, BSNL and MTNL, which got the licences by default, have still not made any headway in rolling out the services.
Reliance Jio Infocomm, the only player to have bagged a pan-India 4G spectrum, is likely to start services by December.
Are LTE devices and tariffs expensive?
As in the case of other technology, prices of 4G enabled devices (dongles, WiFi routers and smartphones) have started falling. At present, standalone dongles and WiFi routers without bundled data plans from Airtel are priced between Rs. 1,500 - 2,500. Smartphones with 4G connectivity, which used to be on the higher side, is now available for as low as Rs. 5,000.
As far as tariff is concerned, Airtel is offering its 4G services at the cost of 3G, with 1 GB data for Rs. 300 in Delhi. The most expensive plan in Delhi is Rs. 3350 for 20 GB (postpaid) and Rs. 1857 for 10 GB (prepaid). The 4G plans or the 'Airtel infinity' postpaid plan begin at Rs. 999 for 3 GB data and Rs. 2,999 for 15 GB, while the prepaid plan cost Rs. 1,749 for 5 GB and Rs. 3, 249 for 15 GB in Delhi. The tariff differs across cities.
3G adoption has been slower than anticipated. Will 4G go the same way?
Probably. High tariffs, lack of seamless and pan-India coverage and dearth of affordable devices ruined 3G services in India. Even reduction in 3G tariffs in the last one year was not effective to lure Indian users to the 3G fold. In case of 4G, tariffs are already on 3G level and with players like Reliance Jio and others coming into the fray, hopefully keep it there, if not reduce 4G tariffs below 3G level. Also 4G devices are available even in the budget segment.
What can jumpstart the widespread acceptance of 4G?
Since Airtel is the first to have launched the service, whatever it does in terms of tariffs, services and device prices will be a trendsetter and other 4G players will be forced to match it.
However, Reliance Jio Infocomm, being the only operator to bag a pan-India 4G licence, can provide seamless connectivity across the country. Reliance is also capable of coming up with market-disruptive strategies and large-scale operations that can change the overall landscape of 4G in India. This is not the first time that Reliance is foraying into the telecom space. Way back in 2003, it had, through Reliance Infocomm (now Reliance Communications), practically transformed the country's telecom landscape by introducing a mobile handset along with voice and data services for less than Rs. 500.
The buzz is that Reliance Jio will offer LTE tablets for Rs. 3,500, along with data plans as low as Rs. 10 for one GB of data. The company is also getting ready to tap the TV and cable space after Mukesh Ambani funded the merger of Network 18 and ETV. That development gives Reliance Jio preferential access to content from 25 channels (of ETV and Network 18) for its Live TV service.
How will 4G impact publishers and advertisers?
It is expected that 4G will boost mobile browsing and its users will consume at least twice as much data as their non-4G counterparts. This means publishers and advertisers can look forward to more unique visits, mobile impressions and page views from devices like mobiles and tablets, which currently don't offer much traction.
As users spend more time on mobile web, generating more mobile impressions, page views and unique visitors, advertisers are encouraged to use elaborate, innovative and interactive content on the mobile platform, to ensure greater engagement with the target audience. However, this might hasten the movement away from the print medium.
What are the challenges that mobile advertising faces?
Mobile advertising has the potential to feature among the fastest growing industries, riding on the back of the 4G wave. But, most marketers admit that they don't have a mobile advertising strategy in place, to take full advantage of the medium.
Currently, mobile banner ads are the main form of advertising on mobiles, but they lack originality and the concept has been borrowed from online strategies. Though 3G has improved data speeds considerably (even if it is in patches), it has not tempted marketers to experiment with rich media ads on mobile which can help them engage with consumers and improve click-through rates.
The key to mobile advertising is personalisation of the messages. The provider knows everything from the target's location (via GPS) to what they browse and download. How best marketers can engage with users is in their hands.
How will 4G help content creators and advertisers?
High speed internet on mobiles will create new opportunities for content creators. Mobile websites will essentially become primary touch points for brands and users.
Video content will play a pivotal role, since buffering and downloading will become faster and hence, campaigns on YouTube, Facebook and other video platforms will gain popularity. Display advertising will also be supported by richer formats, with greater scope for innovation in terms of content. On the entertainment side - live TV and regular soap operas - 4G will reduce constraints on mobile bandwidth, which will lead to increased usage.