India: Impact of 3G Auctions on Franchising

18th May 2011, By

20th May 2010:( Exclusive) Finally, after years of waiting, the Indian Cell Phone Consumer will finally be able to enjoy high speed internet access and various other allied services. One would definitely want to consider what would be the impact of 3G services for franchisors, franchisees and the community alike. A quick peek into 3G Auctions:

- Generated a whopping Rs. 67,000 Crore (USD 14.5 Billion) for the Govt. of India, will be most likely used to bridge the fiscal deficit, strengthening the economy

- No PAN India Player

- First 3G Network Upgrade was in Japan, way back in 2001, hence India is about 9 years behind. Most countries around the world now offer 3G services and are considering 4G. Indian Telecom Operators will definitely not bid for 4G as the current 3G auctions have required them to make heavy investments. The 3G auctions has been closely tracked by almost all policy makers, business houses, entrepreneurs not just in India, but globally.

Positively Impacted: Financial Services and Stock Broking Brands:

Most of the larger PAN India Financial Services and Stock Broking Companies, rely heavily on strong IT systems and networks, especially in smaller cities, where internet connectivity is limited, it affects service quality. Now along with 3G, these franchisees, will open up the market for new customers, which would mean greater competition once the market gets saturated. The IT savvy customers will look for direct online trading and investing.


There will be a fall in the costs of IT services. Retail franchisees, will see a slight drop in their IT and software cost. Most of the telecom providers have a Business Solutions division, this division provides internet applications, along with third party service providers, to increase their market penetration. Telecom sector in India, is already the most competitive one, with probably the lowest rates, globally. Smaller Retail Companies will effectively compete with larger ones.

India already large franchising market with over 2000 Plus Franchisors and 120,000 Franchisees will get even more competitive, more international players will enter India, They would have entered India, even otherwise, after all not many can ignore the rising star. Its just that 3G will make it more attractive for them, thanks to the drop in costs as explained below.

Overall benefit for the Indian economy, currently only 9% of India is online and connected to the internet, 3G will usher a revolution, bringing internet browsing costs down. One of the reasons, the web penetration is low in India, is due to its high cost. In the US, you can get a T1 Line for as little as USD 20 a month for unlimited browsing, in India, for a high speed internet line, even if you paid twice as much, you would not be able to get it.

Smart Phone Sales:

There will be a sharp increase in Smart Phone Sales in India. This includes, Apple's iPhone, Google and HTCs Nexus One, Sony Ericsson and other cell phone cos.

Rise in Demand of IT services, will cause the price to fall. 3G will encourage a lot of IT companies to provide services at the phone level. This will bring the price of expensive Point of Sale systems, down and probably make them redundant. 3G will encourage people to go for iPad, which is a lot more application rich than the current non modifiable Point of Sale systems.

For web entrepreneurs like us that run franchise portals in India, this would mean higher number of users, more traffic and definitely more revenue, so cheers to that. Lets wait and enjoy instead of simply watching and explore the new business and franchise opportunities that unfold for entrepreneurs.

About the Author

Dhawal Shah is an entrepreneur and franchise expert with many years of experience. He publishes the fastest growing franchises for sale search engine, helping buyers and sellers of franchise opportunities . has many resources to help you on your journey to start your own business, sell your existing business or open a franchise. has hundreds of franchises for sale in India, Bangladesh, Nepal, Bhutan and Sri Lanka.