IDC warns of high tariff regime; but Industry upbeat

BANGALORE, INDIA: The results of the BWA auction announced today point to a 'high cost-high tariff' regime in the near term as operators would likely try to recover their investments in the shortest time frame, said research firm IDC India.

"Long term success would be defined by effective collaboration between operators, content providers and technology enablers to offer innovative services that lead to mass adoption demanding new ways of thinking in technology, policy, charging practices, devices and services," said Naveen Mishra, lead telecoms analyst, IDC India.

"Operators must address the triple challenges of acquiring high volume subscribers, delivering true mobile broadband experience while being competitive", Naveen added.

However, the industry seems to be more optimistic. Prasanto K Roy, chief editor, IT publications, CyberMedia, said that Broadband Wireless Access (BWA) would be a game changer for India.

“(It will be a game changer) ...not just for mobile executives, but for rapid penetration of 'fixed-line' broadband in areas outside suitable wireline reach. I expect to see BWA-based broadband rollout helping ramp up broadband in India, up from its abysmal sub-1 per cent penetration levels, Roy said.”

BWA allows high-speed Internet access, IP telephony, TV services, and other voice and data multimedia services. Unlike cellular telephony, it is not designed for extreme mobility, though it can support it, but it allows broadband access where you do not have suitable wireline.

“Despite its over-50 per cent mobile phone penetration, India has been really challenged on wireless data availability. The globally well-established wi-fi has had little presence in India: there are few public hot spots outside hotels (which over-charge for wi-fi access, contrary to the global trend of free wi-fi) and offices. So the only option for mobile users has been low-speed data cards, now replaced with 3G data modems”, Roy observed.

Meanwhile, Aircel, a joint venture between Maxis Communications Berhad, Malaysia and Apollo Hospitals group, is upbeat about its successful bid for 8 circles across the country.

In a statement, Sandip Das, CEO of Maxis and Director of Aircel said, “This result demonstrates Aircel’s strong commitment to the Telecom market and its customers. In 2008 we rolled out infrastructure worth USD 2 Billion to cover 18 circles and then entered intra circle partnerships to create a Pan-India brand. We have fired the imagination of our customers, with a suite of exciting non voice data services and products, even coining the term ’pocket internet."

He added that it was only natural for the company to take the next step and acquire 3G spectrum, which it did successfully across 13 circles at Rs 6500 Crores.

The circles won are Andhra Pradesh, Tamil Nadu, West Bengal, Bihar, Orissa, Assam, North-East and Jammu & Kashmir at a total auction price of Rs. 3438 crores.

"The BWA win ‘joins the dots’ in our storyline and underlines our faith in future data services demand, in a country which has a dominant youth population and a gaping digital divide," Das further said.