The Indian WiMax story is turning out to be a study in contrasts. Amidst the uncertainty over spectrum allocation and prohibitively high cost of equipment, the Indian market is emerging as the hotbed for aggressive investment by carriers. Among the leading carriers that have announced definitive plans are BSNL, Tata Communications, Reliance Communications, and Bharti Airtel.

BSNL plans to spend around Rs 3,000 crore on a nationwide WiMax network that is expected to cover close to a sixth of Indias population in three years. Tata Communications is also investing Rs 2,000 crore on its WiMax network. The other Tata Group company, Tata Teleservices has announced a major WiMax deployment, including a $500 mn investment over the next five years.

Reliance Communications has already launched commercial WiMax services in Bangalore and Pune. Bharti Airtel has reportedly deployed WiMax nets to 300 towns. Among vendors, Intel, Alcatel-Lucent, etc, are pushing WiMax in a big way. Gartner though indicates only a gradual growth for WiMax in India, in the near future. Gartner cautions that India would remain a niche and not a very promising market for the technology until 2009.

Key Drivers
Inspite of the not-so-rosy near-term picture, the enthusiasm among carriers can be attributed to the growth potential they foresee in the long term. Heres why WiMax makes sense for the Indian marketWiMax can be effectively used to bring low cost broadband to rural areas in India. Over 70% of households in India have no access to wired lines and the number of mobile phone users far outnumbers PC owners. Such a scenario presents a very good opportunity for wireless broadband services.

Almost 85% of present deployments are on DSL technology. Hence, the expected target of 9 mn broadband subscribers by the end of 2007 has not been achieved primarily because of the time that it takes to deploy DSL fixed access on existing copper lines. Therefore, it makes sense for operators to move broadband deployments from wireline to wireless access. Further, they can improve cost effectiveness, as WiMax will help them reduce their opex and capex, provide them with faster time to market, and complement and extend their existing cellular and broadband offering.

Challenges
Uncertainties over spectrum allocation are prohibiting wide scale rollouts in the short-term. It is, therefore, likely to be restricted to nomadic and fixed wireless applications till the time spectrum issues are resolved.

While seven companies have been licensed to offer WiMax services in India, it is in the 3.5 GHz band with 5 MHz slots each, which is not enough. While Trai had suggested that WiMax be rolled out in 3.3-3.4 GHz and 3.4-3.6 GHz frequencies and up to thirteen players be allocated spectrum, there are hurdles in this as well. The 3.4-3.6 GHz frequencies are also currently used by satellite-based services and broadcasters. And as for the 3.3-3.4 GHz frequencies, in most towns this was available between 50-70 MHz, while in major towns about 30 MHz was available, and in metros and major cities only 14 MHz of this resource is free.

Meanwhile, the country-specific mobile broadband framework makes the nationwide rollout of WiMax costly. Among the other hurdles are low computer penetration and high equipment costs. Also, today, deployments are restricted to last mile access or as a backhaul to extend the reach. Hence, it might be that the true potential of WiMax will be achieved with the advent of mobile WiMax.

Shipra Malhotra
shipram@cybermedia.co.in

Page(s)   1