The department of telecommunications (DoT), the telecom policy-making arm of the government, is more than a month away from finalizing rules of entry for broadband wireless providers but at least three companies have started testing and setting up networks based on a recently-evolved standard, Wimax, to tap into demand for high capacity data services.
Wimax, short for worldwide interoperability for microwave access, is a standard that is capable of data speeds of 10 megabits per second (mbps)up to 2km away from a radio transmitter. In comparison, third generation (3G, a fast mobile phone standard) networks promise data throughput of 2mbps and data-friendly cellular networks deliver speeds of up to 512 kilobits per second.
State-owned Bharat Sanchar Nigam Ltd (BSNL), Tatas-controlled Videsh Sanchar Nigam Ltd and Chennai-headed Aircel Cellular have primed Wimax networks in cities and, going by the experience of initial customers, the technology could fast become popular in India, a key Asian market expected to drive demand for the standard.
“Wimax has the potential to take India directly from voice-only cellular technology to the fourth-generation networks providing voice, broadband, data, video and television to the masses, not just in cities, but also in rural areas,” says Amit Sharma, country president of Motorola India. Sharma and other Wimax proponents tout the wireless standard as a cheap alternative to deliver broadband connectivity to until-now unconnected areas.
But the companies rolling out Wimax networks primarily have business users on their radar. Videsh Sanchar is readying a Wimax network in Bangalore to tap into broadband demand and plans to shift business customers, mostly from the software industry, currently served on a fast microwave radio link to the new standard soon. The company will expand its Wimax reach to 50 cities by the second half of this year, says its head of corporate strategy, Srinivas Addepalli.
BSNL is setting up Wimax networks in six cities—Bangalore, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad—and four towns in Haryana, where the standard was to be deployed to support a trial e-governance project. Contrary to expectations, the first takers of the service were privately-run educational institutions in the region and not government customers.
Aircel, the third player to commercially deploy a Wimax network in India, plans to expand its coverage to 44 cities and towns in India by the end of the year, up from just Chennai and Bangalore now. It currently targets just business users with up to $800 (Rs35,400) annual rentals for modems at customer premises.
Mahanagar Telephone Nigam Ltd, the state-owned provider of telecom services in Mumbai and New Delhi, is testing Wimax services ahead of the broadband wireless policy, but has stopped short of offering it to customers.
“We cannot go ahead with deploying a technology when the government has not come out with a clarification on the technology and spectrum to be used,” says company chairman and managing director R.S.P. Sinha.
BSNL, Videsh Sanchar and Aircel are using a trial spectrum for their Wimax operations.
BSNL, Videsh Sanchar and Aircel are betting on a first-mover advantage with the service. “Today, there’s such a latent demand for broadband in India,” says Addepalli, adding that the $200-400 modem prices today is the biggest stumbling block for retail customers. “It doesn’t make sense to hold on for any longer.”
Hardware vendors are already quoting $100 modems “provided sufficient volumes are assured”,says Raj Yadav, regional sales director of Wimax equipment maker Aperto Networks.