Indonesian operators are expecting their 3G (WCDMA) traffic to take over 2G (GSM). At stake is their investment in 3G network. However, revenues generated by co-located 2G and 3G BTS currently still in favour of 2G BTS as traffic in 2G is in all time high, although the trend is decreasing.
Also at stake is technology evolution. The world cellular technology roadmap is heading toward all-IP networks, carrying higher data throughput.
But Indonesian operators must wait for the 3G to take over 2G, both in terms of traffic and revenues.
Some of the culprits why it takes longer for 3G in Indonesia to dominate the legacy networks are as follows:
- Operating frequency
- Handset penetration
- Data usage and the absence of killer data application
- Battery life and subscriber behaviour
By virtue of operating frequency, GSM using 900 MHz will have better coverage than 3G using 2100 MHz spectrum. Physics dictates that lower frequencies propagate better than higher frequencies, and they travel farther and penetrate better in an indoor environment. It means that 2G will reach more subscribers, and thus increase its share of traffic accordingly. This disadvantage for 3G may be reversed if operators switch to UMTS900, by way of frequency re-farming, as Indosat did last year.
Worse, 3G handset penetration does not help either, as the numbers of 3G handsets are still fewer than 2G, thanks to higher production cost and shorter technology existence. Subscribers create traffic hence it is impossible to increase traffic without the availability of supporting handsets. Further, the association of 3G handset with power-hungry battery that sucks battery life faster, making less and less subscribers want to access 3G networks. Some subscribers even manually switching to 2G network only. Operators can lure subscribers back into 3G network by offering cheaper tariff scheme for 3G subscribers.
The plus side for 3G compared to 2G is data speed. Data traffic generated by 3G network may be higher than 2G, by default, but the network needs yet to be optimised to absorb and generate more data traffic. Creating applications to sustain promoted digital lifestyle beyond youtube and social networking is a must for operators to increase revenues from data usage.
Until then it will get more difficult to make case for the expansion of 3G network.
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