Carrier Equipment: WiMax: Future Positive

In India, where the telecom infrastructure is not strong enough and last-mile
connections are typically through copper cable, DSL and fibre optic installation
costs are high. The ability to provide these connections without wires,
therefore, greatly lowers the cost of providing these services. This is why
WiMax is an attractive alternative for providing last-mile connection in
wireless metropolitan area networks, especially in cellular backhauls. With
India targeting a broadband subscriber-base of 9 mn by 2007 and 20 mn by 2010,
the industry is going to see more action in future. During 2006-07, the industry
has witnessed some major developments taking place in the WiMax equipment
segment.

Size of the Market

Former telecommunication minister Dayanidhi Maran's decision to
ensure quality broadband access t o customers-both individual and
enterprises-has paved the way for the growth of WiMax technology deployments in
India with the total WiMax equipment market touching Rs 88 crore during FY
'06-07.

However, the size of the certified WiMax equipment market is comparatively
lower than the non-certified market because certification of products started
recently. The size of the certified market is pegged at Rs 4.4 crore, while Rs
83.6 crore is the market size of non-certified products. Main vendors active in
the market are Aperto Networks, Alvarion, Telsima, Airspan, etc. According to
estimates, Aperto has emerged as the top player during FY '06-07 followed by
Alvarion and Telsima.

Broad-Basing Broadband

Though the year 2007 has been flagged as the Year of Broadband in
India, fiscal 2006-07 has already cleared the path for the broadband revolution.
The ongoing broadband penetration assisted Indian vendors and operators to take
a lead role in the introduction of WiMax technology

. In India, penetration of broadband is still very low as compared to other
nations. WiMax will help broadband penetrate into rural markets as one no longer
needs to lay copper, hence deployments become faster. Mass scale deployment will
also reduce cost of service for users. The government has recently proposed to
offer all citizens of India free and high-speed broadband connectivity by 2009,
through the state-owned telecom service providers-BSNL and MTNL. Telecom in
India is definitely on a roll, and moves like this will serve to help the
wireless broadband sector.

Increased PC penetration and increased content and e-commerce, probable
saturation of the mobile market in the next two to three years, need for a
growth driver to the operator, and e-Governance initiatives may also be main
growth drivers for WiMax. On top of this, the government in India is pushing
WiMax aggressively. The Department of Telecommunications (DoT) is planning to
de-license an additional 50 MHz bandwidth that can be used for commercial WiMax
services. The biggest advantage that WiMax offers is a large network range
spanning up to 10 km, which would help increase broadband penetration in rural
areas where provision for wired connections has been difficult.

However, the current need is to get fixed/nomadic broadband services at
affordable cost and have a scalable deployment technology.

Vendor Revenue

The Rs 88 crore market is expected to grow to Rs 132 crore during
2007-08 with certified equipment and non-certified equipment equally sharing the
market at Rs 66 crore each.

Alvarion is one of the largest vendors of equipment for WiMax networks.
Alvarion is now the driving force behind open WiMax, which brings a fresh
attitude to the market replacing a vendor-centric environment developed by large
telecom vendors with a disruptive operator-centric culture. It has been the
leader by listening to the needs of customers and investing heavily in R&D.

For Telsima, the current revenue stream from DCME and WiMax products is less
than $10 mn annually. It is currently working with two large private operators
who, between them, control more than 50% of international Internet connectivity.
It is also venturing into retail access.

Market Trends

The demand for broadband connectivity from urban homes and small and
medium businesses is growing rapidly. Wireless will be the dominant delivery
mode for broadband services just as it now dominates voice services. Thanks to
its true broadband performance, early availability and cost advantages, WiMax is
best positioned to serve the huge Indian market. Several Indian service
providers have already acquired suitable spectrum licenses to deploy wireless
broadband services.

The innovative 'Village Entrepreneur' model, together with a net-enabled
community info-kiosk, is an ideal way to reach many who are not yet connected.
Telecom companies are working actively with state governments through Broadband
Wireless Association (BWA) / WiMax solutions that are tailor made for India at
price points that are comfortable for the Indian consumer.

Globally, there are around 200 WiMax trials, while it has been commercially
deployed in forty cities around the globe. In India, WiMax deployment is
beginning to take off-deployment in Chennai and trials in Bangalore, Kolkata,
New Delhi, and Mumbai have already started. The Pune Municipal Corporation has
recently announced a program called 'Unwiring Pune' to launch WiMax and Wi-Fi
services in Pune. BSNL's WiMax expansion drive to cover 1,000 cities in India is
also of relevance. India is expecting a final policy announcement by DoT on 3G
spectrum and broadband wireless access. BSNL has planned a tender for 1,000 base
transceivers in July and may begin deployment by September if a policy
announcement is made soon.

India will be one of the largest WiMax markets because WiMax is the most
cost-effective way to bridge the digital divide and bring broadband services to
those areas where there is no existing telecom infrastructure or the
infrastructure is not capable of providing broadband services. A huge percentage
of the Indian population does not have Internet access today; WiMax is the best
technology (lowest cost with best performance) to provide that access.

Deploying WiMax in India will result in more people being able to access the
information that they want, anywhere, and anytime. For example, a businessman in
rural India may well find that new markets are open to him because he can access
the Internet where he is and finds new customers and suppliers. In India, the
ease and speed with which a mobile WiMax infrastructure can be built, combined
with the expected low cost of mobile WiMax end-user devices, will mean that
finally operators have a way to provide cost-effective broadband connectivity to
the mass market.

Broadband penetration in a market like the US is reaching saturation. So, the
focus on those markets are mobility based broadband access, increased value
added services, keeping running costs low, use of IMS for seamless service
provisioning, etc. However, in the US, two major operators-Sprint and Clearwire-are
committed to WiMax deployment.

Technology at the Fore

Apart from Alvarion, Aperto, Airspan and Telsima, players like
Alcatel-Lucent, Nortel, Nokia, Siemens, Ericsson, and ZTE are testing the waters
in the country.

Airspan Networks has introduced an economical 'get started' WiMax system in
the 3.5 and 5.8 Ghz frequency bands that will allow an operator or enterprise to
deploy a base station and WiMax customer premise devices for the best price
offered by any vendor in the WiMax industry. This system provides connectivity
at up to 10 Mbps in a small, compact package, which can be delivered and
installed within several weeks of order. Wi-Fi connectivity is also included in
the system.

The development of WiMax Wave2 in 2006-07 is also very important. Wave2
includes MIMO technology that allows WiMax to significantly increase its overall
system performance and throughput.

Motion, which uses Alvarion's market leading BreezeMAX base stations, is
Alvarion's complete WiMax 802.16e-2005 solution portfolio for mobile WiMax
networks. It is commercially available today.

Alvarion is ready with mobile equipment in 2.3, 2.5 and 3.5 Ghz and they hope
that spectrum will be allocated by WPC in India very soon. During the second
quarter of the year, Alvarion will be launching mobile WiMax for the 3.3 Ghz
band.

Telsima has successfully conducted trials with major tier-1 operators in
India, and commercial deployments with operators with more than 400 sectors in
each account.

The C-Dot Alcatel-Lucent Research Center (CARC) has completed India's first
live WiMax IEEE 802.16e-2005 (also called Rev-e) field trial using Aircel's
licensed spectrum. Trials were conducted using the 2.5 Ghz band and demonstrated
applications in moving conditions such as video streaming, high-speed file
downloads, VoIP, and Web browsing.

Currently, Nortel is testing its WiMax solutions with a number of carriers
around the world. Its mobile WiMax solution is built on a foundation of
OFDM-MIMO, a combination of innovative transmission and antenna technologies
that maximize spectrum to deliver lightning-fast speeds and high bandwidth
essential for high-quality mobile video and TV.

Main Gains

Aperto Networks, developer of advanced WiMax base stations, and VSNL have
announced recently that VSNL has completed deployment of Aperto's PacketWAVE
multi-service broadband wireless systems in over 65 cities across the country.
This is part of an initial deployment phase with the goal of growing the network
to cover over 200 cities within 12 months. Aperto has recently won a major order
from Bharti too. Other main clients of Aperto include BSNL and Aircel.

Alvarion's customers in India include Aircel Business Solutions, subsidiary
of leading Indian cellular service provider Aircel, which is planning to use
Alvarion's WiMax equipment to build WiMax networks across fifty cities in
northern and eastern India. In addition, India's leading private telecom carrier
is also using Alvarion's fixed WiMax system for 3.3 Ghz to build WiMax network
across India. With deployments currently in eight cities, this operator is using
WiMax to augment its current broadband, fixed and cellular network
infrastructure to quickly offer affordable broadband data services to SMEs and
customers in new markets, and has plans to expand this network to more cities
throughout India. Other main client of Alvarion is Bharti.

Telsima, which is creating its own space in India, has bagged major order
from Reliance and VSNL. Airspan is closely working with Tulip. MRO-Tek has done
business to the tune of Rs 70 lakh.

Regulatory Bottlenecks

The anticipated growth in broadband will depend on too many factors
and the main hurdle on its way is regulatory issues pertaining to spectrum
allocation. Recently, senior executives from Intel, participants from Sprint
Nextel, COAI, and AUSPI came together to discuss the challenges that WiMAX is
facing in India.

According to their recommendations, the most suitable bands for broadband
wireless access is 2.3-2.4 Ghz (for mobile BWA such as WiMax), 2.5-2.69 Ghz (for
mobile BWA such as WiMax), 3.3-3.6 Ghz (for fixed/nomadic BWA such as WiMax) and
700 MHz (for future). They have also asked for 2.5-2.69 Ghz band to be made
available expeditiously on a 'technology neutral' basis. Operators should be
allowed the opportunity to choose the most appropriate technology, method of
operation (fixed, nomadic, mobile), etc to suit their business needs.

Ideally, Indian service providers should be able to deploy a technology,
which can maximize utilization of the spectrum. Spectral efficiency of the
technology needs to be considered while assigning the spectrum. WiMax is
spectrally more efficient compared to other competing technologies. The minimum
quantum of spectrum recommended per operator for BWA considering efficient
network deployment and business viability is 30 MHz.

India provides a huge opportunity for broadband growth. However, the future
of broadband is highly dependent on where the government wants to steer it. It
has placed the responsibility of driving broadband heavily on BSNL in rural
areas through WiMax. However, spectrum is a serious obstacle for massive
adoption of WiMax in the country, according to research firm Gartner, which
remains positive on the future of broadband in India. Also, the unbundling of
local loop would only give the much-required push in increasing broadband
penetration.

Baburajan K

baburajank@cybermedia.co.in