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As WiMAX Commercial Launches Begin in India, Will it Give Copper a Run for the Money?

By Sridhar T. Pai, CEO, Tonse Telecom and Maravedis partner

The WiMAX eagle is preparing for takeoff. But that is leaving DSL service behind as copper runs for cover. Many telecom observers in India do not believe that broadband is going to be big in that country. The reasons cited include lack of spectrum, high computer prices), high bandwidth rates, and weak demand for broadband. But I disagree. Broadband is in the position that cellular once was. Even as late as 2005, none of the operators expected the wireless industry to acquire more than 5.5 million new subscribers each month for 15 consecutive months. This growth rate is now a reality and the run rate continues unabated. As a result, the cellular subscriber base has overshot industry expectations and crossed 170 million by May 2007.
Given the right conditions for growth – policy, spectrum and price-points, why shouldn’t the broadband market take off the same way?   

The Latest in Broadband

In fact, broadband in India will not be just big, it will be massive! And if you look carefully, wireless broadband has already started making a beginning. Despite all the debate about lack of spectrum, the early birds have begun doping the airwaves. VSNL (Videsh Sanchar Nigam Limited, India’s leading ISP) and Reliance Communications (belongs to the Reliance Group, India’s top tier private sector business house) have already initiated major city-wide initiatives. While VSNL is still trialing in Bangalore with 4 Base Stations in North Bangalore and tariffs are not out yet – Reliance has gone a step forward with about a dozen Base Stations already in the ground and commercial service initiated. The plan is to build out a base coverage of Bangalore city and start a Pune-wide deployment before moving into Hyderabad.

Paradoxically, the Year of Broadband, the aggressive position taken by the government to draw attention to the low penetration of broadband in the country) got off to a poor quarter, with the chief proponent of this initiative, former Telecoms Minister Mr. Maran,  no longer around to make it happen. But it was probably the most appropriate position the government of India (GOI) could have taken, against a backdrop of broadband policy that is targeting 9 million broadband subscribers by Dec. 2007 – a sharp increase from the 2.43 million actual subscribers by mid-May. It may seem unclear how roughly 6.5 million subscribers will be brought into the fold in the remaining 6 months.

The spectrum imbroglio continues among the various stakeholders – the Department of Telecommunications, the Ministries of Defense and Space, and the Planning Commissions. It is encouraging that the operators nonetheless are proceeding with deployments.

The Most Important Developments

1. Despite spectrum hurdles, the operators have gone ahead with the bands they currently own. This early-market start will provide some quick learning about radio deployment issues, fine-tuning and antenna alignment challenges, RF optimization, vendor evaluation, and customer experience monitoring.
2. That operators are pushing ahead with existing spectrum also indicates to the policy makers and regulators that they are serious about BWA (broadband wireless). This is bound to coax the Ministries involved to make future decisions more expeditiously.
3. The approach is also defiant of the incumbents who would not open the last mile and are seeing erosion of their fixed-line base, which was down to about 40.3 million as of March 2007.
4. Most of the operators have major BWA/WiMAX initiatives in the advanced planning phase, while others have already started work in select states or regions.

 

For the cultural melting pot of India, a tech soup is hardly new. With several tiers of population, income levels, and needs, there will be a heterogeneous mix of broadband technologies deployed in parallel. Metro Ethernet, PON, satellite broadband, outdoor Wi-Fi, microwave, DSL, coax, and wireless broadband technologies are all going to be in the fray.

While each technology will find its place, WiMAX, with its technical superiority and ease of deployment, is likely to come out with flying colors. The demand-pull for WiMAX is so strong that even spectrum policy snags may not be able to keep this eagle from flying.

Sridhar T. Pai

Sridhar Pai, is CEO and founder of Tonse Telecom and is Maravedis partner for the Indian market. Sridhar has spent over 13 years in the global telecom industry and most recently was director marketing at IntelliNet Technologies Inc., a leading signaling infrastructure developer. Prior to that, Sridhar was head of VoIP business at Network Solutions. He also was part of the original team that incubated the softswitch product at Xybridge Technologies Inc. (later acquired by Zhone Technologies). Sridhar started his career with Motorola ISG group (Singapore and India). His functional expertise has been technology research, product marketing and marketing communications for the telecom industry.