BWA/WiMAX India Market Update

ARTICLE

BWA/WiMAX India Market Update

By Sridhar T. Pai, CEO, Tonse Telecom and Maravedis partner
Contact the author at stpai@tonsetelecom.com

How can you keep up with the mobile phone connectivity demands of a nation of 1.1 billion people? Let’s say, you are doing okay if you have moved up from zero to 200 million connections in 12 years.

How can you keep up with the bandwidth demands of a nation of 1.1 billion people? Not much if you have only around 3 million broadband connections.

But for a developing country that is coming into its own, with an economy that is flourishing at 9%+ GDP growth rates per annum and a stock market that is scorching its way to the top, bandwidth growth is but natural. And you can be sure everyone including the government and policy makers are running to clear the way for the broadband revolution to begin.

In this context, Tonse Telecom and Maravedis jointly developed “BWA/WiMAX in India: 2007-2014 Report, 2nd edition” to understand the new market realities and potential growth trends over the next few years. The findings will be released on 24 October. For Maravedis newsletter readers, here is a preview.

Tonse is confident that the Indian BWA/WiMAX market will continue growing despite the roadblocks. We conservatively estimate that in the next 12 months, about 250,000 CPEs and about 5,000 base stations will be sold in India. If some of the larger plans are realized, as many as 10,000-12,000 base stations and about 500,000 CPEs might be consumed by this bandwidth-starved nation. At current equipment costs and bulk discounts expected by Indian operators, the total CPE/BS equipment market for the year may be between US$50 million and $120 million. This is a substantial jump over the last year and could signify the eventual emergence of one of the world’s top 3 WiMAX markets.

WiMAX CPE prices have declined from $300 to about $140 without a full-feature set. Plain vanilla WiMAX CPE prices for large quantities will drop below $100 by Q1 2008. Medium-size deployments (50,000 CPEs) will start materializing by December 2007, and large-scale deployments (100,000 CPEs) will have begun by March 2008. The rollouts of these networks will be in a phased manner, as there will be a fair amount of time spent in radio tuning, repositioning of towers, and addressing customer complaints.

India will most likely see the world’s lowest end-to-end cost for WiMAX service and will drive costs down further than any other market. Integrated operators, such as Reliance, will mount erect WiMAX towers alongside CDMA towers and derive further cost advantages.

Tonse believes that BWA/WiMAX will progress in the face of all odds, including fundamental disagreements among policy makers, implementers, and operator associations about spectrum sharing and allocation:

Individual operators disagree regarding spectrum ownership following mergers (M & A activity), whether involving GSM entities only or a mixture of GSM and CDMA entities.
TRAI disapproves of the current administration and management of spectrum, the agency handling it, and its persistent, hopeless inefficiencies that have contributed largely to the spectrum mess. But DoT does not appear willing to acknowledge these problems.
The Ministry of Defence demands additional time and a full-fledged alternative fiber optic network before giving up its ownership of the spectrum.

Maravedis and Tonse believe that with the upcoming spectrum opening, the certification of new equipment, and lower-cost CPEs, the annual 3.3 and 3.5 GHz equipment opportunity will increase from $4 million in 2005 to $273 million in 2014. Tonse expects the accumulated BWA subscriber base to reach about 21 million during that period, including both business and residential subscriber communities.

For complete details and a detailed brochure about the report, please visit www.maravedis-bwa.com.

For more information you can contact the author: stpai@tonsetelecom.com