We have not yet seen a robust ecosystem/handset that would be able to support the launch of TD and FD together. While China is seeing some progress on 4G we do not expect low-cost 4G handsets to become available on the market any time soon.
That said, we do note that QCOM Snapdragon 210 represents clear progress, but a commercial rollout is unlikely before the first half of
2015; it will most likely begin with China and it could be early 2016 before it is available in India. Furthermore, by that time, we expect low-cost branded 3G smartphones to be available in the USD50 price level, which we think would be sufficiently affordable to drive mass market adoption in 3G
4G operators have 20MHz of spectrum in the poor 2.3GHz band. Given this, pure-play 4G operators need to deploy a very large number of towers and a pan- India operator will need to start a tower population of c150k. Moreover, 4G requires towers located
at short distances apart. Even existing tower companies may find it tricky to meet demands as new tower deployment in urban centres is a big challenge
While network sharing could allow new entrants to benefit in terms of capex savings and shorter rollout times, it comes with a near- to medium-term challenge. Most of these towers do not have fibre backhaul, which may limit the capacity advantage of the 2.3GHz spectrum
Although we are of the view that TD-LTE will work, we believe that TD-LTE VoLTE is still a couple of years away from mass market adoption. Consequently, we believe it is difficult to see how a pure-play 4G operator can achieve viable commercial scale with this expensive, complex, early-stage technology; however, we expect VoLTE to work in the medium term in low-income markets such as India.
