WiMax to remain niche technology in India

Nareshchandra Singh, Principal Research Analyst, Gartner in an interaction with Idhries Ahmad of CIOL, explains why inspite of the hype around the technology, WiMax will remain a niche market for WiMAX until 2009.

Singh isn't terribly excited at the way Indian government has helped service providers to roll out WiMax service in the counrty.

"Although presented as an important driver for broadband policy in India, the Indian government has failed to effectively motivate operators to roll out country-wide mobile broadband. WiMAX has been selected by the Indian government to connect rural areas to the Internet, adds the . However, low PC penetration will lead to limited demand".

The principal research analyst, Gartner adds ” By January 2008, India had only 3.4 million broadband subscribers, far short of the target of 9 million by 2007 set by the broadband policy. Given the low levels of PC penetration in India, there will be a limited demand for WiMAX and the country-specific mobile broadband framework makes a nationwide rollout of WiMAX cost prohibitive. Hence, in the near term, WiMAX is still a niche technology and limited to enterprise and high-end residential users in urban India.”

As mobile frequencies will not be available in the short term, Gartner does not expect mobile WiMAX rollouts to be available at larger scales before 2009, at the earliest. Therefore, most WiMAX connections in the short and mid-term will be for nomadic or fixed wireless applications.

The research firm cautions India will remain a niche market for this technology until 2009. "Although the Indian government is strongly promoting WiMAX as a technology to connect the country with broadband services, the country-specific mobile broadband framework makes a nationwide rollout of WiMAX cost prohibitive", says Gartner.

While the government policy proposes extensive rural coverage using WiMAX, research firm Gartner believes that due to the limitations of the spectrum allocation, the only deployment for a sustained business case is to bring WiMAX broadband (point-to-point 802.16-2004) to rural centers in villages or schools, hospitals and so on. "From the access point, individual access will then be available via a Wi-Fi mesh. In urban areas, WiMAX can be utilized to offer mobile and semi-mobile broadband to consumers and enterprise customers", says Singh.

Singh opines that in the near term Indian WiMAX market is not very promising. and hence advises carriers to focus on the enterprise market and high end residential subscribers.

" At the present time, it is not clear if vendors would benefit from risk-sharing models with Indian operators. Overall, the long term potential of the Indian WiMAX market heavily relies on spectrum allocation, WiMAX ecosystem maturation, and the timeliness of WiMAX and 3G licenses.”

Excerpts from the interview with Gartner's Nareshchandra Singh.

CIOL: How do see the role of government in pushing service providers to roll out the WiMax service in the country?

Nareshchandra Singh: In November 2007, the Department of Telecom (DoT) decided that it would auction the 3G and WiMAX Spectrum. For 3G, the Indian government allocated 30 MHz of bandwidth in the 2100 MHz band. Therefore, there will be three or six licenses released dependent on the government's decision on whether 5 MHz or 10 MHz will be given to each license holder. The government also decided to auction three WiMAX licenses in the 2.5 GHz band with 10 MHz each.

The timeline and bandwidth of 3G and WiMAX licenses will heavily impact the future mobile broadband access market share in between 3G and WiMAX. The permission for mobility in the WiMAX license will also influence the future of WiMAX growth. Also, 3G seems to have, in comparison to WiMAX, a better ecosystem in place.

CIOL: What do you see as the evolution path for WIMAX?. In terms of cost, how is WIMAX placed when compared with other technologies?

NS: Products based on fixed version of WiMAX have been certified by the WiMAX forum in 2006. Most of the current deployments are based on these. Recently, mobile WiMAX products for usage in the 2.3 GHz band (specific to Korea) have got certification from the forum.

However, certification process for products based on the 2.5 GHz band (favored by most countries, including India) are ongoing and yet to complete. Only on certification of various product sets by different vendors, mobile WiMAX will start putting in place a viable ecosystem to address large opportunities, unlike the present niche implementations.

CIOL: How do you see it competing with other technologies like 3G HSPA? Are WCDMA/HSPA and WiMAX not competing, but rather complementing technologies?

NS: WCDMA/HSPA and WiMAX are competing technologies, as both promises to be the dominant platform for providing truly outdoor wireless broadband access. They will complement indoor WiFi hotspot access. WCDMA and HSPA are already commercially deployed by several operators in several countries around the world, while WiMAX deployments are still in trial stage and few commercial offerings are available worldwide.  

CIOL: Why should operators invest in a new technologies like WIMAX when there is already 2G infrastructure of operators ready to roll out their 3G services

NS: For established cellular operators, there will be little or no incentive to go in for a different wireless broadband platform than the one that is the logical progression of existing standards – namely 3G wireless. Backward support is going to be a key requirement, which 3G platforms already support. On the inter-operability front, WiMAX will have a lot to achieve before current wireless operators can take a shot at it.

The biggest obstacle in the way of rural infrastructure expansion from the service provider's perspective is less RoI and high Capex and Opex. In India the ARPU for a rural user is considerably low when compared to an urban user. In this light what are opportunities for service providers to expand their portfolio in rural India What is the business sense for operators to roll out services in Rural India. Any alternative revenue model  you see service providers contemplating

Current economics just do not support a substantive rollout of wireless broadband in rural India. Alternatives like the OLPC and vernacular content needs to be fully explored to create and sustain demand.