RIL may take WiMax route to offer broadband services

RIL may take WiMax route to offer broadband services

Mumbai: As an “interim measure," Infotel Broadband Services Pvt. Ltd, the vehicle that will launch billionaire Mukesh Ambani’s dream project to offer broadband services across India, may opt for WiMax as the core technology and not LTE, two persons involved in the discussions said.

This is at a time when telecom operators in India are trying to choose between worldwide interoperability for microwave access (WiMax) and long-term evolution (LTE) as the core technology for offering wireless broadband services. Both technologies are backed by strong lobbies.

Intel Corp., which makes electronic chips for WiMax-enabled phones or laptops, has been backing WiMax, while Qualcomm Inc. that makes chips for LTE-enabled devices, has been betting on LTE.

In India, where broadband penetration is less than 1% and the subscriber base is a mere nine million, a service provider’s choice of technology means mass market opportunities for such companies.

After Reliance Industries Ltd (RIL) acquired a 95% stake in Infotel for Rs4,800 crore, it was expected the company would tilt towards LTE, a promising technology that’s still evolving.

A spokesperson for RIL declined to comment on Mint’s queries.

However, at an analyst conference, a senior RIL official had given a sense of how the company would place its orders, a move that is being watched by rivals as well as global hardware suppliers.

“We will adopt a technology, which can alternate between WiMax to LTE," the official told analysts at a conference, a day after the company swept rival bids and won a government organized auction for spectrum for broadband wireless access in 22 circles.

One of the contenders wooing Infotel is South Korea’s Samsung Electronics Co. Ltd. A week after Infotel won the bids, Samsung sent a senior official from South Korea to renew old connections at RIL.

The official is said to have worked with the old team— Manoj Modi and Jyotindra Thacker at Reliance Infocomm Ltd—before the business moved into the Anil Ambani fold and was renamed Reliance Communications Ltd.

Samsung, one of the leading vendors at that time, supplied the first CDMA handsets along with LG when the company launched mobile operations in India.

Vendors such as Samsung are offering a commitment to allow the migration of WiMax seamlessly to LTE once the technology matures.

“LTE is a technology that is a future technology. It is expected to come in two years. What is available today is WiMax," said Hung Song, vice-president, global sales and marketing, telecom systems, Samsung Electronics. “The answer is a natural progression."

Companies such as Samsung and China’s Huawei Technologies Co. Ltd expect the assurance of seamless integration will be attractive for RIL.

Companies such as Samsung are active in LTE development, including trial networks, Song says. The company is the only device provider for the technology for companies such as TeliaSonera of Norway, he said.

TeliaSonera rolled out the first commercial mobile broadband network using LTE technology in late 2009. Sweden has also introduced services using LTE technology.

NTT DoCoMo Inc., the largest telecom operator in Japan, and Verizon Wireless, one of the largest carriers in the US, are both set to follow by December. AT&T Inc. has awarded equipment contracts to Alcatel-Lucent and Ericsson for LTE commercial deployment in the US in 2011.

Song’s colleague, Deepak Bhatnagar, vice-president, network business at Samsung Electronics’ Indian subsidiary, who’s been interacting with Reliance for more than a decade, said his company was an active partner in some of the governing bodies setting LTE standards.

“The point with LTE is the question of timing, whether you can get technology today with a ready-made ecosystem (handsets and routers)," he said.

For this reason, LTE is not ready to be rolled out commercially.

“WiMax has come along in five years, while GSM technology has taken over 10 years to stabilize and 3G took almost five years. It takes five years for any technology from simulation to commercial roll-out," Bhatnagar said. Mobile WiMax has a stable ecosystem (with Wi-Fi routers and handsets) as it started in 2003 and South Korea was among the first countries to launch services in 2006.

Still, an RIL press statement did mention LTE as the technology with better spectral efficiency.

“When a person like Mukesh Ambani, chairman of Reliance Industries, talks, he is referring to his vision, which is 10 years ahead of others," said Bhatnagar. “Ten years later, everyone will talk LTE, including us. Among the other big issues going against LTE would be capex for a technology that is still progressing."

Other Indian operators haven’t picked the system they will use, probably waiting for RIL to make a move.

“We are still evaluating both technologies and haven’t made a final call yet," said Gurdeep Singh, chief operating officer of Aircel Ltd. Aircel has a licence to offer wireless broadband in eight telecom circles.

Tikona Digital Networks Pvt Ltd, which has licences for five telecom circles, also hasn’t made its choice. Mint reported last week that Tikona plans to choose the same technology that RIL’s Infotel chooses for wireless broadband.

“A lot would depend on the question of easy migration from Wimax to LTE and what kind of offers vendors are able to offer on that front," said Prakash Bajpai, chief executive officer at Tikona.

Qualcomm, which has licences to offer broadband wireless services in four telecom circles, said interoperability with existing technologies deployed in India will be critical for the success of BWA.

“We expect the majority of Indian players to address the demand for mobile broadband with 3G now and 3G plus LTE in future," a Qualcomm spokesperson said.

Some analysts say LTE isn’t all that distant. “I don’t quite buy the LTE-is-so-far-away argument," said Nareshchandra Singh, principal research analyst with technology researcher Garter Inc.

Two weeks ago, telecom equipment maker Ericsson announced that it successfully conducted a trial of LTE technology in the 2.3GHz spectrum allotted for wireless broadband services in India.

“This is not a decision that companies will make in haste, given the nature of capital expenditure involved in getting things up and running," Singh said. “More so, when there is a possibility of all that becoming obsolete in the near future."