Speaking with Anil Mascarenhas of India Infoline
Kanwalinder Singh, President, Qualcomm India and South Asia, is responsible for Qualcomm’s business in the region and drives strategy for technology adoption and ecosystem partnerships. He has been instrumental in collaborating with service providers, handset and infrastructure OEMs, venture partners, software developers and content providers to promote adoption of wireless technologies, devices and services.
Qualcomm Incorporated is a leader in developing and delivering innovative digital wireless communications products and services based on CDMA and other advanced technologies. Headquartered in San Diego, Calif., Qualcomm is included in the S&P 100 Index, the S&P 500 Index and is a 2008 FORTUNE 500 company. Qualcomm’s focus areas for India and South Asia include 3G technologies and devices (both CDMA2000/EVDO and WCDMA/HSPA), connected computing, and services including mobile VAS, LBS, mobile gaming and mobile TV, etc.
Speaking with Anil Mascarenhas of India Infoline, Kanwalinder Singh says, "We are looking at a very fundamental change in the telecom landscape."
Update us on your plans to bid in India’s BWA Auction
Qualcomm has a history of participating in spectrum auctions to expedite the commercialization of new wireless technologies. By participating in India’s BWA (Broadband Wireless Access) spectrum auction, Qualcomm can foster the accelerated deployment of TD-LTE.
We have filed an application with the Indian Government to bid in India’s upcoming auction for BWA spectrum in the 2.3 GHz band to facilitate the deployment of TD-LTE, which is compatible with 3G WCDMA/HSPA and EV-DO.
This will enable a seamless broadband experience for consumers within India and while roaming globally.
Why TD-LTE?
In India’s unpaired 2.3 GHz spectrum band, TD-LTE is the technology best suited to complement current and upcoming 3G deployments and address India’s rapidly growing demand for high bandwidth broadband services.
Through the use of integrated multimode devices that support TD-LTE as well as 3G and 2G technologies, TD-LTE will take advantage of the 3G and 2G ecosystems, thereby creating economies of scale to enable a broad choice of wireless broadband devices at affordable price points for Indian consumers. TD-LTE enhances 3G networks and offers an attractive value proposition to end-users as well as the wireless ecosystem.
We, along with our partners intend to demonstrate TD-LTE technology with the goal of creating a TD-LTE infrastructure and device ecosystem that, in concert with 3G networks and devices, will support India’s broadband goals.
With 3G auctions almost here, how are you reading the situation?
India would be a unique place with so many 3G players. There are four players already and another couple of them will join in; and with networks competing, it creates a unique situation.
Our focus is clearly on how to make these technologies (3G) operational and successful. There are few dimensions to this. In the current environment, Evolution Data Optimized (EVDO) is already launched in four networks viz. Tata, Reliance, MTS and BSNL. There is already a product in the market, which comes in the form of EVDO USB DONGLE.
We are now working to create high quality offering; providing the best consumer experience in data and voice is very important. In India, there is some amount of tolerance levels in voice. However, when it comes to data, the quality needs to be extremely good.
What about the data service?
On the data side, operators have launched post-paid and pre-paid services; not only with dongles but also through smart phones. The PC penetration isn’t very high in India but internet is being used through dongles in PCs and also through smartphones.
On the network side, there are the EVDO players growing from 50 cities to around 100 cities. I think everything is in place for a large scale deployment as well as optimization.
How do you see prices of devices moving?
On the device side, we have been very clear about certain affordability factors, which impact the depth of deployment. Operators need to retain their top customers. They have to offer a compelling voice experience, which 3G brings. They also have to offer a compelling 3G experience on the customers’ handheld device. And then they have to address different affordability points. We are clear that we want these features at three different price points:
- We are aiming at a Rs10,000 price point with our BrewMP platform for a smart phone with all the available features.
- The second is the regular mobile phones with good 3G voice experience, internet applications and value added services. This should be available at Rs5,000 and above and would expand the market.
- The third is the dongle, where we are looking at a lowest price point of Rs2,500.
With this, the competition will have not just enough networks but more and more devices; not just from the regular players but private brands too.
To what extent do the Chinese phones impact the market?
The Chinese original equipment manufacturers (OEMs) and original design manufacturers (ODMs), bring a value proposition, which is, more features at a lower cost. At the same time, companies like RIM, Apple and Nokia also bring a compelling value. Some will set aggressive price points and the rest just follows. To that extent the Chinese players have a lot to contribute.
How do you see 3G impacting the topline of companies?
The topline of the existing operators is certainly under attack in a big way. Data and 3G will be the key drivers for growth in topline. Data would bring growth in topline as well as bottomline.
Voice will be increasingly be a factor of scale; in this regard 3G brings high quality voice. Operators will be able to retain top clients as well as bring in clients from other operators who are not offering 3G.
What has been the experience of 3G in other countries?
The contribution of data revenues is in the range of 10-12% in India. Data revenues, in a large market like US, trends between 25-45%. Other markets are a replica with time shifted by four to five years. In India we see growth from the existing 10-15% to the 25-40% in the next four to five years.
Some talk about a possibility of leapfrog in telecom…
Leapfrogging is the strategy of the lazy. It doesn’t really work this way in telecom. You have to grow your networks and grow your organization to the next generation in a methodical way. In fact, shifting an organisation, which is voice-focused to data, by itself, is an experience.
If you have a base technology, you have to put the next technology above that. You have to have the cost dynamics to cover the city and then all the cities, then maybe the whole country. By that time, the next generation technology starts on top of that. Leapfrogging is a very fashionable word; what is needed is basic hard work.
Would incumbent players be at a significant advantage?
I would address this from a frequency point of view. In general, operators who have the lowest frequency deployed, have been the successful ones so far; and 3G will layer on top of the existing frequency. Operators with 800MHz CDMA or 900MHz GSM will benefit as their base level network would be well in place.
The competition will create more value for the customers. We have seen competition work in the voice space; hopefully it won’t be a repeat of value erosion. In fact, I hope we see some enhanced value in the services.
The incumbents are always at an advantage. The key for the incumbents is to shift the mindset; from voice to data. I think most of the incumbents recognise that. It’s not just the top leaders of the organisation who have to change the mindset but they should be able to steer the entire organisation towards this move.
Besides mindset change, what are the other significant challenges?
I think the other challenge would be the quality of the network, which especially in India has a lot to be desired. Leveraging 3G to make high quality voice and data available and getting this optimized is the key thing operators have to do. That is sufficient to attract customers.
Then there is the issue of affordability of devices. If it’s a smart phone, the browser has to be top-notch; the email and TV experience has to be the best. Next, provide the customer a compelling experience other than voice, which is anyways now down to a paisa per second etc.
What are the additional revenue streams possible?
The networks would allow operators to retain the top customers, especially in the Mobile Number Portability (MNP) context with voice and data. Then there is a newer segment like dongle. Finally, they have to do alternative devices like smartbooks.
What is Qualcomm doing in terms of alternate devices?
We are working on Kayak, which is a desktop version of a smartbook. Today, netbooks and PCs are not selling as well in India as mobile technology. We need to expand the computing market. Secondly, the PC is complicated for most Indians - hard to take care of, viruses, software issues etc.
The device has to be affordable; simple and power efficient. In India, especially rural India, power deficiency is a major issue.
From Qualcomm, Kayak would be like the evolution of a fixed wireless phone. It would remain on your desk and become your computer to access internet. Smartbooks are the mobile versions of computing devices based on our Snapdragon platform. We think these devices are necessary to open up another revenue stream for operators.
What is your view on WiMax?
We are not involved in terms of creating WiMax infrastructure but we do have some intellectual property rights in Orthogonal frequency-division multiplexing access(OFDMA), and this technology goes into LTE (Long Term Evolution) and Wimax. We are not into this because WiMax is not large enough to be worth our while. We support LTE in a large way. If the government comes in with a lot more spectrum, things may change in future. People will be trying to compete with Wimax but that ecosystem has weakened; because it doesn’t interoperate with current networks.
When you look back, what do you think took so long for 3G auctions?
Since it’s almost here, let’s look ahead rather than look behind. It clearly took a while and I think India is a unique market. It is not a market of one or two operators who will agree with each other on the path forward. It is a vibrant competitive market where regulation could take its fair share of time as everybody has to be comfortable; it’s in their business interest to move forward.
We are looking forward to supporting the players who have already invested in 3G. We will enable them have high quality networks; help them address affordability so that they can reach all over India.
Do you have any difference of opinion in certain areas?
We differ with many voices in India. There are some voices which say that 3G will be only an elite service; we are sure it will be a nationwide service and we are working on the applications, utility and value to make it a mass market.
Healthcare, mobile banking and computing are among the key areas which 3G will benefit at a national level. Before things start, it is easy to be pessimistic. Over the next five years (after the spectrum auctions end), we are looking at a very fundamental change in the telecom landscape.
The other area where we have a different viewpoint is the area of leapfrogging. There is no leapfrog in the wireless world. We have to layer on top of the technology that is already there, which we are enabling.
Finally, it is just a matter of the right players coming into the market and making it successful.
So do you see a bloodbath?
The number of slots is certainly less than the number of players; to that extent there will be vigorous competition. That’s part of an open market. Once done, it will be a huge milestone for India. The day the auctions end, a market discovered price for spectrum will be established forever. That is a fundamental regulatory goal that we have fought for. Tomorrow, if there is more auction or spectrum, this will be a price point to refer to. It’s the breadth of deployment, quality of deployment, affordability and the applications. It is good for the operators; it will grow their revenue and retain customers.
From the Indian point of view, do you see any advantage?
It is good for customers; we do not have enough PCs in India. If there is a leapfrogging story to be written in the coming years, it is the computing story because we are starting from scratch where we may create a brand new thing which takes advantage of the internet.
The PCs were adopted before the internet. We (India), for whatever reasons did not adopt PCs the way we took on internet. Sometimes delay does help. We could fundamentally come up with devices which connect Indians. The internet is a big part of what tomorrow’s computer is. People used to say network is the computer, we think cloud is the computer. The computing story of India is going to be very unique. It may be on smartphones, Kayak smartbooks, the combination…We are absolutely focussed on this and are doing all it takes to enable future technologies.