State-owned phone firm Bharat Sanchar Nigam Ltd or BSNL is in talks with system integrators and hardware vendors to plan a countrywide, mobile high-speed data network. The company, India’s biggest telecom services provider, is studying preliminary proposals before floating a purchase tender for equipment and roll out of services, estimated to involve an investment of up to Rs1,000 crore in the first year.
“We have got three to four proposals. Evaluation is going on,” a senior BSNL official said, requesting anonymity and declining further details such as the planned date for request of proposals for the tender. BSNL currently has more than a million customers for its broadband service, delivered on fixed phone lines.
The BSNL wireless broadband services are scheduled to be rolled out in around 70 cities within the first year itself. The firm aims to have 400,000-500,000 new customers for the service by the end of the first year and around 2 million by the end of the third. In comparison, private competitor Reliance Communications Ltd (RCom), which launched its broadband wireless service last month, has a target of 100,000 customers by the end of the first year.
BSNL, which has seen its landline phone customer base stagnate at around 3.6 million for the last few years and has seen its share in the mobile voice market slip due to a capacity crunch, is planning to outsource the management of the entire planned Wimax network to private companies. “It has been decided to go for a revenue-share model, where we provide only the connectivity (to the base stations), the billing and marketing facilities. The partner will have to buy the equipment, install and manage the network on an ongoing basis,” the official said.
Wimax is short for worldwide inter-operability for microwave access, a standard that is capable of data speeds of 10 megabits per second (mbps) up to 2km away from a radio transmitter. To put that in perspective, third generation (3G) networks promise data throughput of 2mbps and today’s data-friendly cellular networks deliver speeds of up to 512 kilobits per second.
BSNL will shift the network to the Wimax ‘e’ standard that will allow customers to access the service even from fast-moving vehicles. The Wimax ‘e’ service is seen as a competitor to 3G cellular services, but the standards for it are expected to be ready only later this year by the Wimax Forum.
With this, BSNL is likely to become the third operator to invest in a pan-Indian high-speed data network. RCom and long-distance carrier and Internet service provider Videsh Sanchar Nigam Ltd have already launched high-speed data services in some cities and are expanding to other cities. In contrast, mobile phone operators Bharti Airtel Ltd and Vodafone Essar Ltd are awaiting a final shape to government policy before deciding on whether to choose Wimax technology or to go in for GSM-derived technologies such as high-speed packet access for broadband services.
BSNL, which will make available its towers and optic fibre network for the project, will award the network installation and management to at least four companies in each of the North, South, East and West zones, the company official said.
The allotments will be based on the highest revenue quoted during the bidding process. In return for the backbone connectivity, tower space and bill collection services, BSNL is considering retaining at least a third of the subscription revenues from the wireless broadband service.
An analyst said the proposed model will help keep BSNL’s investments optimized. “It is a win-win model for BSNL,” said Prashant Singhal, director for telecom at audit firm Ernst & Young. “This way, the job of keeping the network optimized and responding to consumer demand is outsourced to the hardware partner, reducing the risk of not being able to meet demand.”
According to the BSNL official, companies who have already shown interest include Hyderabad-based system integrator and software services company Prithvi Information Solutions Ltd, the Franco-American equipment vendor Alcatel-Lucent SA and the Florida-based Airspan Networks Inc., along with the Silicon Valley-based wireless networking equipment manufacturers Soma Networks Inc., Aperto Networks Inc. and Telsima Corp.