Google searches 3G prospects in India

Google, the world's largest search engine and one of the biggest Internet brands, is understood to be eyeing opportunities in the third generation of mobile telephony, or 3G, in India.

Sources in the telecom industry say Google is looking at broadband wireless access, or BWA, in the country and may participate in the auction with an Indian partner. BWA is also known as Worldwide Interoperability for Microwave Access, or WiMAX.

As an alternative, Google could be just a technology partner to a telecom service provider. Foreign companies can buy up to 74 per cent equity in such a venture.

A spokesperson for Google in India, when contacted, said the company would not comment on speculation.

The Department of Telecommunications, or DoT, is offering spectrum both for 3G services as well as BWA and hopes to auction spectrum by the middle of January next year. It finalised the information memorandum last week.

Google is not new to mobile telephony. It shook the world two years ago by announcing that it would bid for the US government's auction of radio frequencies that could be used to deliver the next generation of internet and mobile phone services.

The company's plan was to provide a nationwide wireless broadband service that would take on digital subscriber line services and cable internet access. However, it lost out in the auction as incumbent telecom behemoths like AT&T and Verizon stole a march.

Analysts say there are many reasons for Google to look at 3G. "With the wave of consumers adopting BWA as the likely scenario in India, it is expected to bring about a shift in the focus of advertisement revenue from fixed line internet to mobile internet. Search-led advertisement is the biggest of all in the online business, and Google is the natural stakeholder in the Indian BWA space," says Alok Shende, principal analyst, Ascentius Consulting.

Others cite other reasons. "Google wants to create a global space in wireless internet, since mobile subscribers outnumber internet users. In India, 3G subscribers will outdo WiMAX users. Given these estimates, it makes sense for Google to bid for 3G spectrum," says a telecom analyst who did not wish to be named.

Google has also submitted a proposal to regulators in the US for clearance to use unused channels, which the company calls Wi-Fi 2.0 and on which it is possible to offer wireless broadband services at very high speeds.

The BWA spectrum to be put up for auction by DoT will be in the frequency of 2.3 GHz, with a base price of Rs 1,750 crore for a pan-India licence. The government will auction two blocks in BWA spectrum and reserve one for state-owned Mahanagar Telephone Nigam Ltd in Mumbai and Delhi and Bharat Sanchar Nigam Ltd elsewhere.

Spectrum in the 2.5 GHz for BWA will also be auctioned after the outstanding issues of interference with the mobile system of department of space are resolved.

Additional inputs by Leslie D'Monte and Mansi Taneja