The New Generation of Indian Telecom

India's mobile-telecommunication industry has long been credited for championing the low-cost wireless revolution. Its next challenge is to persuade Indian consumers to start paying up.

Nine of India's 15 telecom companies are rolling out third-generation services. One early mover, Tata Teleservices is already running television advertisements boasting merits of the new technology, including faster Internet access and video calling. Tata and the other eight paid a staggering $15 billion to buy the 3G airwaves from New Delhi, making the networks significantly more expensive than the second-generation technology currently in use. The trick now will be to charge enough to make that investment profitable. Consider that the telecom industry's approach to India so far has been to offer dirt-cheap services to capture as many subscribers as possible. Call rates in India are as low as two U.S. cents a minute.