3G Underperformance - Reasons & Learning’s for Successful 4G Implementation

Acknowledgement

• I am highly indebted to Prof. R.A.Dakshina Murthy• Gratitude towards my Parents• Thankful to Prof. R.Sreedhar, Prof. Venkatesha Bhagavath &

other members of CUIM• My special gratitude to the Mr. Mohan Sharma, Mr.Anand

Khanduri.• My thanks also go to “Indian Telecom Brief” group, in which

specially to Mr.Sreekumar, Mr.Akhil Rane, Mr.Zunzar Patil for giving me such attention and time.

1 - Introduction

• The increasing demands and requirements for wireless communication

• The 3G spectrum auction in India began on 9 April 2010.• At the time when the world is moving towards 4G

implementation, India is still crippling to implement 3G• 3rd Generations Mobile Telecommunications could not be such

a success story

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No -8

1.1 Problem Statement

• Background –

The adoption of 3G in India on the customers’ front is facing some issues

Expensive plans, costly handsets and most importantly failure in demand establishment are the factors causing drawbacks in 3G adoption in India

• Statement-

“Whether India can learn anything from 3G issues, and can it ultimately lead to a successful 4G implementation”.

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No -10

2 - Literature Review

• There are not many studies available in the parlance of 4G as well as the drawbacks of 3G

• Hiren j Patel, Jigar Makwana, Shailesh Desai, titled “Marketing Mastermind” An IUP Publication Vol. XI No-7 July 2011

• Mr. Parvin patil finds out in the report “3G Wonderland: The World is not enough”

• Total Article Reviewed - 20

Indian telecommunication industry depends on five major factors-• Availability of Low Cost Handset• Relevant services, application and content• Affordability of tariffs• Innovation in service & offers• Network rollout in term of reach & Connectivity

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No -9 & 12 - 24

3 - Research Methodology

The study requires quantitative data collection and analysis

of the same to come out with fruitful conclusions

Data Sample

current 2G and 3G users

9million in April & 14 Million In November 2011 users of 3G services in India

852 million 2G users in which 650 are active connections

141+ , 2G and 3G users and a few licensed service providers will be the sample for the study

Sampling

Judgemental Sampling

ensure equal probability of every potential user to be part of the study

Mode of Enquiry

A questionnaire method

The questions will include the identification of both the users and non users

of 3G servicesSource - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No - 25 - 27

3 - Research Methodology Cont.

Ingredients of Questionnaires

Two questionnaires are circulated specific for• Who are not using 3G - Question to customers who are not using 3G • The existing 3G user - Question to customers who are using 3G

Data Analysis

Factor Analysis and T Test

Limitation

Geographic Location, Time

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No - 25 - 27

4 - Data Analysis

For the purpose of study the service users were

divided into two segments-• Those who are not using- “I am not using 3G”• Those who are using – “I am using 3G” Tool - SPSS & MS Excel are used for the analysis Reference –• Marketing Research (K.Malhotra, 2010)• Operation Management (Frazier, 2004)• Operation Research (A.M. Natrajan, 2006)

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No - 29

4.1 - Data Analysis“I am not using 3G”

• While 3G has been positioned as a 'faster' and 'superior' service, most customers feel that telcos have failed to demonstrate the relevance for this platform. There are various reasons which the customers have identified for the failure in implementation of 3G services.

• Total Sample Size 113• Factor Analysis• T Test

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No - 30

4.1.1Factor Analysis

“I am not using 3G” The 4 main variables for the study are:• Un-usefulness• High Tariff• Poor Speed• High price of Smart Phones

DETERMINE THE NUMBER OF FACTOR• Only those factors which have eigne value greater then 1.0• The factors extracted should account for at least 60 percent of the variaton

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .509

Bartlett's Test of Sphericity Approx. Chi-Square 19.987

df 6

Sig. .003

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No – 31 -34


“I am not using 3G” cont.

INTERPRETING THE FACTORS

Variables - Poor Speed &Un-Usefulness are at the end of horizontal axis, hence form Factor1Variables – High Tariff & Smart Phone are at the end of vertical axis, hence form Factor 2

It could be summarized that the individual decision “I am Not Using 3G” is based on two major kinds of elements-Factor 1- Resulting BenefitsFactor 2- Total Investment

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No – 34 -35



Factor 1 (Resulting Benefits) = (.557) x Poor Speed + (.668) x Un-UsefulnessFactor 2 (Total Investment) = (.686) x High Tariff + (.580) x Cost of Smart Phone Note – Higher value shows disapproval of individual

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No – 36



I AM NOT USING 3G BUT WILL USE 4G

Following variables have been identified for the 4G use purpose-• Internet Browsing• Video Call• Business Application• Office Application• e Application• Online Gaming• Factor 1 (Fundamental Application) = (.319) x Internet Browsing + (.448) x

Business Application + (.371) x Office Application• Factor 2 (Supplementary Application) = (.510) x e-Shopping + (.663) x Video

Call + (.172) x Online Gaming• Note – Higher value shows approval of individual

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No – 37-41

4.1.2Hypothesis Testing

“I am not using 3G” I am not using 3G Factors

As per data analysis 3 variable are playing critical role to take decision “Not using 3G” are •High Tariff•High Price of Smart phoneUn- usefulness




Hypothesis• Ha01: = Variable “High Tariff “is not significant for not using 3G services

Ha11: = Variable “High Tariff “significant for not using 3G services

• Ha02: = Variable “High Price of Smart phone” is not significant for not using 3G services

Ha12: = Variable “High Price of Smart phone” is significant for not using 3G services

• Ha03: = Variable “un- usefulness” is not significant for not using 3G services

Ha13: = Variable “un- usefulness” is significant for not using 3G services

Outcome• Significant level is less than .05 Rejecting the Null Hypothesis Ha01:

It means “High Tariff” (Mean = 3.6726) is significant for not using 3G services.

• Significant level is less than .05 Rejecting the Null Hypothesis Ha02:

It means “High Price of Smart phone” (Mean = 3.2566) is significant for not using 3G services.

• Significant level is greater than .05 Accepting the Null Hypothesis Ha03:

It means Variable “un- usefulness” (Mean = 3.0265) is not significant for not using 3G services.




I AM NOT USING 3G BUT WILL USE 4G

Internet Browsing, Video Call , Business Application, Office Application, e-Shopping, Online Gaming

• Significant level is less than .05 so Rejecting the Null Hypothesis Hb01:

It means “Internet Browsing” (Mean = 4.4312) will be significant for using 4G services

• Significant level is less than .05 so Rejecting the Null Hypothesis Hb02:

It means “Video Call” (Mean = 4.0917) will be significant parameter or using 4G services

• Significant level is less than .05 Rejecting the Null Hypothesis Hb03:

It means “Business Application” (Mean = 4.1651) will be significant parameter or using 4G services


It means “Office Application” (Mean = 4.0642) will be significant parameter or using 4G services


It means “e-Shopping” (Mean = 3.5185) will be significant parameter or using 4G services

• Significant level is greater than .05 Accepting the Null Hypothesis Hb06:

It means Variable “Online Gaming” (Mean = 3.0093) will not be significant for using 4G services


4.2.1Factor Analysis“I am using 3G”

The respondents mainly used the 3G services mainly for the following purposes.Internet Browsing, Video Call, Business Application, Office Application, e Application, Online Gaming

• KMO = .601• Factor Identified – 2 (Based on EIGENVALUES, >1, 69.847%)• Factor 1 (Fundamental Application) = (.216) x Internet Browsing +

(.402) x Video Call + (.382) x Business Application + (.291) x Office Application

• Factor 2 (Supplementary Application) = (.433) x e-Shopping + (.709) x Online Gaming

• Note – Higher value shows approval of individual



“I am using 3G” cont.

I AM USING 3G, WILL ALSO USE 4G• High Internet Speed, Reasonable Tariff , High Quality Video Service • KMO = .739• Factor Identified – 2 (Based on EIGENVALUES, >1, 69.847%)• Factor 1 (Conventional Applications) = (.403) x Internet Browsing +

(.531) x Video Call + (.266) Business Application• Factor 2 (Advanced Applications) = (.217) x Office Application + (.531)

x e- Shopping + (.468) Online Gaming • Note – Higher value shows approval of individual



“I am using 3G”

The respondents mainly used the 3G services mainly for the following purposes.Internet Browsing, Video Call, Business Application, Office Application, e Application, Online Gaming




• Significant level is less than .05 so Rejecting the Null Hypothesis Hd01:

It means “Internet Browsing” (Mean = 3.7692) is significant when using 3G services

• Significant level is greater than .05 Accepting the Null Hypothesis Hd02:

It means Variable “Business Application” (Mean = 3.1154) is not significant when using 3G services


It means Variable “Office Application” (Mean = 3.1923) is not significant when using 3G services


It means Variable “e-Shopping” (Mean = 3.1538) is not significant when using 3G services


5Findings

• Findings “I am not using 3G”• Findings “I am using 3G”

If the growth of technology Is faster

thanThe growth of market

Demand “Technology fails”

From - The Innovator’s Dilemma – by – Clayton M. Christensen

5.1 Findings

“I am not using 3G”

Customers are not using 3G services mainly because of following reasons-

• There are not much of the resulting benefits• The investment for the service is quite high• It is better to wait for the 4G services From the hypothesis testing it is proven that the “investment”

criteria (the tariff of the service and the cost of the smart phones) are a major obstacle in the successful implementation of the 3G.


5.2Findings

“I am using 3G

“Early Adopters” Like Tech savvy of the technology, sales force, Traders etc • The current 3G customers are focusing on two main factors-• Fundamental Applications = Internet Browsing, Video Cal, Business

Application, Office Application• Supplementary Applications= e-Shopping, Online Gaming• Even though 3G customers have a lot of expectations from services but it

is identified & proven through hypothesis testing that the main advantage of 3G only comes in Internet Browsing & other applications do not hold much good for the customer

• Video calling & On Line Gaming still do not have significant impact.


6Conclusion

• Lack of proper strategy can also be seen as a major contributor in the failure of 3G technology.

• The loopholes in the Indian regulations and strategic performances are the main reasons for the poor performance of 3G

• Learning’s for 4G• The service providers to make sure that there is an established demand

for the technology service and the resulting benefits• Factors such as cost of technology for the user, cost of implementation for

the service provider as well as the speed of the data flow should be duly considered


7

Recommendations For 3G service providers-• need to start penetrating the rural market as soon as possible, because it

will give them first mover advantage & help them reaching out for sustainability

• Develop & provide the support platform for business, offices & e- commerce applications

For 4G service providers-• Bandwidth License & Roll out plan• Channel Partner selection• Interface Device• Data Demand Creation• Voice on data Platform• Rural Market penetration• E-Commerce synchronization

Source - “3G Underperformance - Reasons & Learning’s for Successful 4G Implementation” page No – 82 - 85

3G Underperformance - Reasons & Learning’s for Successful 4G Implementation

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