Tech Sizzlers: Maximizing on WiMax

NEW DELHI, INDIA: 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 the 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 India’s population in three years.

Tata Communications is investing Rs 2,000 crore to roll out its WiMax network. It plans to roll out WiMax in 110 cities for enterprise and 15 cities for retail segment by 2008.

The other Tata Group company, Tata Teleservices has also announced a major WiMAX deployment, including a $500 million investment over the next five years. The new network will cover more than 130 cities. Reliance Communications has already launched commercial WiMax services in Bangalore and Pune. Bharti Airtel has reportedly said to deploy WiMax nets to 300 towns.

Among the vendors, Intel and Alcatel Lucent, etc. are pushing WiMax in a big way. However, juxtaposed to this the outlook given by the leading market research firm, Gartner indicates only gradual growth for WiMax in India in the near future. Gartner cautioned that India would remain a niche and not a very promising market for this technology until 2009.

The WiMax Drivers

In spite the not so rosy near-term picture, the enthusiasm among the carriers can be attributed to the growth potential they foresee in the long term. Here’s why WiMax makes sense for the Indian market - WiMax can be effectively used to bring low cost broadband to the rural areas in India.

Over 70 per cent of the 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.

WiMax is a front-runner among the wireless broadband technologies available, which has the potential to bridge the digital divide considering its ability to cover long ranges and reach the Indian population including the vast rural belt with high bandwidth at affordable prices.

Almost 85 per cent deployments are on the DSL technology. The expected target of 9 million broadband subscribers by the end of year 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 the operators to move broadband deployments from the Wireline to Wireless access. Further, they can improve cost effectiveness as WiMax technology will help them to reduce their OPEX and CAPEX, provide them with faster time to market and complement and extend their existing cellular and broadband offering.

Challenges

Among the challenges are the uncertainties over the spectrum allocation, which is prohibiting wide scale rollouts in the short term. It is, therefore, likely to be restricted to nomadic and fixed wireless applications till the time the 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. Worldwide, WiMax is being deployed in the following spectrum bands as per the WiMax Forum standards - 2.3GHz / 2.5GHz & 3.5GHz.

However, as reported by the Department of Telecom (DoT) in its status report on the availability of WiMax spectrum, there is a heavy frequency crunch in some of the key bands such as 2.3-2.4 GHz and 2.5 GHz. The 2.5-2.69GHz range is primarily being used by the country's Insat satellite service controlled by Department of Space (DoS).

While TRAI had suggested WiMax be rolled out in 3.3-3.4GHz and 3.4-3.6GHz frequencies and up to 13 players be allocated spectrum, there are hurdles in that as well.

The 3.4GHz-3.6 GHz frequency is also currently used by satellite-based services and broadcasters As for the 3.3-3.4 GHz frequency, in most towns this frequency 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 a nationwide rollout of WiMax costly. Among the other hurdles are low computer penetration and high equipment costs.

To a great extent, the timeline for spectrum allocation and the bandwidth allocated will determine the success and future growth of WiMax in India. Further, it will also be imperative to bring down the costs and develop relevant applications.

All of this will help lead to rise in demand. Also, today the deployments are restricted to last mile access or as a backhaul to extend the reach.

The true potential of WiMax will be achieved with Mobile WiMax coming in. Therefore, the onset of Mobile WiMax in the Indian market will also determine the technology’s future roadmap in the country.