Report on indian broadband services

4G Weekly Digest April 8th, 2009 - Volume 4, Issue 19

Editor's Foreword
By Adlane Fellah, CEO and Founder
Co-authored by Sridhar T. Pai, CEO and Founder, Tonse Telecom
How Long Before the Indian Broadband Floodgates Open?

This week we are releasing the 3rd edition of our report on broadband wireless opportunities and challenges in one of the most promising developing markets. The report is a collaboration with our local Indian partner Tonse Telecom. Tonse provided an invaluable contribution as a consultancy home-based in the Indian market. In 2008, Indian telecom continued to grow despite the economic slowdown. In particular the mobile sector showed impressive resilience to the general slowdown as the Indian mobile subscriber base grew by 48.5% in 2008, to reaching a total of 350 million mobile subscribers.

The Indian broadband sector, on the other hand, continued its rollercoaster ride of anticipation with repeated government delays of spectrum auctions. Although their broadband campaigns remained on the agenda, service providers ended the year with more confusion than a clear BWA/WiMAX/3G strategy regarding where their businesses were headed. The immediate concern for service providers was to boost and buttress 2G voice subscribership.

Key Findings Include:

The Indian BWA/WiMAX subscriber count added in the last year is well above 250,000.

BWA/WiMAX ARPU for SMEs (small-to-medium sized-enterprises) is in the range of Rs 2500 - Rs 5000 (US$50 to US$100)

USB modem prices quoted to service providers in RFP responses were as low as US$35 - US$50 for even small volume shipments such as 150,000- 200,000.

Effective charges applied by service providers to subscribers for stand alone CPEs ranged from free to US$200, depending on tariff plans.

Service provider approaches to BWA/WIMAX are mixed:

BSNL, the incumbent with a clear lead time (likely one year) on pre-allocated pan-Indian 2.5GHz is likely to be the big driver of WiMAX.

Operators such as Reliance and Tata have demonstrated what can be done by using slim 3.3GHz bands, and established the case for fixed WiMAX in India.

Operators such as Bharti Airtel have taken a demand-driven approach where they have extended coverage based on enterprise need/availability of fiber/DSL and feasibility of BWA/WiMAX.

We estimate that WiMAX subscribers will reach 13.5 million by the end of 2013.

The application areas for WiMAX and 3G continue to be open; there is room for both technologies in a severely under-served narrowband market such as India. Industry friendly regulation, affordable and adequate spectrum, and easy availability of low-cost devices are key enablers of this migration from narrow-band voice to the broadband data market.

Operators are ready and consumers and businesses are willing. We expect the floodgates to the Indian digital economy to open once these enablers come together post-auctions/spectrum allocations.

Maravedis and Tonse Telecom will release a Spectrum Supplement after the spectrum allocations are completed either later this year or 2010.

Enjoy!
Adlane Fellah
Maravedis CEO & Founder

For more information, contact the author at afellah@maravedis-bwa.com