Sluggish Performance

Broadband penetration has not been able to taste the kind of success that was

expected from it. WiMax, thus, can be a solution for an emerging market like

India, where there is a clear dearth of a robust and widespread network

infrastructure for delivering broadband across the country.

In the current scenario, WiMax seems to be a realistic commercial solution to

widen the market, especially in the areas where there is poor or no wired

infrastructure.

Because of the ability to provide connections without wires, WiMax deployment

can help service providers and operators lower the cost of providing last mile

connectivity. However, low PC penetration, licensing, stability of WiMax

products, cost effectiveness, and maturing of technology are some challenges

that need to be overcome to enhance WiMax implementation.

Market Leaders



According to VOICE&DATA estimates the total size of the WiMax market,

including both licensed and unlicensed products, has grown from Rs 88 crore in

FY 2006-07 to Rs 94.5 crore in FY 2007-08, registering a 7.4% growth. However,

for a speedy development of broadband in the country, it is imperative to roll

out WiMax in a better way, considering the market opportunities present in the

country.

According to VOICE&DATA estimates, Telsima has emerged as the largest vendor

for WiMax equipments, with a whopping market share of over 74% in FY 2007-08. It

is currently working with two large private operators namely, Tata

Communications (previously VSNL) and Reliance.

The other major players in the market include Alvarion, Airspan, Proxim, and

Aperto. Further more players like Alcatel-Lucent, Nortel, Motorola, Cisco, Nokia

Siemens, Ericsson, ZTE, Sloka Telecom, and Gemini Communications are also making

a presence in the market.

Major Gains



The market saw some significant developments in terms of agreements and

roll-out plans of operators for the deployment of WiMax in FY 2007-08.

In 2008, Telsima was selected by Tata Communications to provide WiMax

solutions for its broadband wireless network in India. Telsima will provide a

comprehensive WiMax solution including base station and subscriber station

systems, customer provisioning systems, and network management systems (NMS).

Tata is proposing to deploy around 1,000 base stations by the year-end to

support enterprise broadband services in hundred and ten cities and consumer

services in eighteen cities. The company is targeting to capture 200,000

customers in the retail segment alone in FY 2008-09.

Alvarion, which stood second with revenue of Rs 7 crore, is presently looking

to extend its presence with the support of its partners, Cyberstar and Wireless

Tech, by bringing advanced wireless broadband solutions adapted specifically to

local frequencies in the Indian market.

The company is offering its high-performance BreezeACCESS VL for

point-to-multipoint and BreezeNET B for point-to-point connectivity to meet the

expectations of the market for optimized solutions at 5.825-5.875 GHz frequency

bands. State wide area network (SWAN) projects and vertical markets including

ISPs, public safety, surveillance, etc. are expected to benefit from these

products.

Another important player, Proxim Wireless, also had some significant customer

wins in FY 2007-08 and emerged as one of the key players in the WiMax equipment

market. The company has been selected by Tata Communications as a supplier for

Wi-Fi mesh and point-to-multipoint solutions. Proxim also introduced converged

Wi-Fi mesh and WiMax solution - Mesh Max.

The company is also working with Sakhti PURA to supply rural areas and remote

villages in India with wireless broadband connectivity to provide tele-education,

healthcare, and other information and content.

Sify, one of the largest Internet, network, and e-commerce companies in India

has also deployed Proxim's 5.8 GHz Tsunami MP.11, a WiMax capable product line

as its core communications platform for its mobility features and last mile

access in India.

While Airspan is presently working with Railtel and few other small ISPs,

Aperto has projects with Tata Communications and some of the small ISP's.

Companies like Motorola, Intel, Samsung, and Nokia are supporting WiMax

technology and have a dedicated roadmap of infrastructure devices and other

building blocks.

Motorola is making significant investments in commercializing WiMax to

provide affordable wireless broadband to people. Presently, the company has 19

commercial WiMax contracts and over 75 WiMax engagements across 43 countries.

Gemini Communications has successfully migrated the MMDS network to WiMax in

several cities including Chennai and Pune. The operation involves switching over

citywide active users from the existing MMDS network to the newly laid WiMax

network.

Sloka Telecom, founded in 2004 as a provider of broadband wireless solutions

to address the needs and requirements of cellular operators and network

equipment vendors in emerging markets, is also operating on profits for the

first time. The company has won a contract to supply equipment to city

municipality in France. WiMax fixed/nomadic products and solutions are the main

contributors for the revenue of the company.

Market Movements



According to a VOICE&DATA survey, the WiMax deployment is poised for a swift

growth in this financial year. FY 2007-08 was the year of pilot projects in

WiMax, while 2008-09 could see the mass deployment in both enterprise, as well

as retail segment. Furthermore, nearly all-major service providers are expected

to come out with large network deployments this year.

As it is very difficult to attain broadband penetration through the

deployment of copper and cable in a huge country like India, wireless is going

to be the key for attaining broadband penetration.

Additionally, VoIP support on wireless broadband technologies like WiMax

could be used to deliver low-cost voice services with mobility, using the same

network infrastructure.

The Indian government has set a target of 20 mn broadband connections

nationwide by 2010; however, the country has only been able to cross the 3.8 mn

mark. In order to achieve this apparently unrealistic broadband target, wireless

technology is going to be the key.

Globally, broadband adoption is happening at a rapid manner and wireless is

the ideal choice. In most deployments, support for WiMax is increasing, however,

it is still in its early days in India.

Operators are also realizing the urge to provide real broadband access on the

move and, thus, are using WiMax networks to do the same in developed markets

such as South Korea, since 2007. Furthermore, mobile TV, mobile advertisement,

and femto cells are the other exciting trends to cost effectively route the huge

rise in data traffic on the operator's network.

According to industry experts, the Indian market comprises categories such as

urban low speed domestic market, which is basically reigned by leased line DSL

solutions because of the availability of fairly good copper lines. On the other

hand, there is a high-speed urban enterprise and the rural market that tends to

have wireless infrastructure such as MMDS, WiMax, and other experimental

wireless technologies like DECT.

All segments of the Indian communications equipment market, including

wireless, wireline, and broadband, will see tremendous investments in the coming

years. Industry experts also believe that the on-going certification and more

2.5 G WiMax licenses to be issued worldwide would bring WiMax to a large-scale

commercialization climax next year

While technologies such as WiMax fixed/nomadic are suitable for emerging

countries where copper wire is still absent, WiMax mobile is more suitable for

developed countries.

The maturity of WiMax infrastructure equipment and availability of end-user

devices have encouraged the emergence of mobile WiMax in several geographies

worldwide during the last financial year.

With the security aspect of wireless technology still to get matured, there

is a strong prospect of further growth in the adoption of wireless and mobility

solutions across different platforms and Industry segments.

Generally, developed countries have broadband infrastructure based on fiber.

This is because of the high speed DTA transfer demanded by users and the already

available high quality wireline infrastructure.

Developing countries, on the other hand, tend to rely more on wireless

solutions, which, incidentally, give them an edge to migrate directly to

cutting-edge wireless technologies like WiMax.

Mobile WiMax is also being seen as having great potential to connect the

unconnected. The technology has a vivid potential of supporting a number of

applications such as e-commerce, tele-medicine, distance education,

e-governance, and delivery of localized content to the rural market.

Industry Outlook



Strategically, there are a lot of steps that need to be taken by the

government, vendors, and service providers, to build a strong foundation for

making broadband in India.

The first and most important thing that needs to be analyzed is the

availability of spectrum. As the deployment of copper and cable would not be

able to serve more than 15% of the Indian population, wireless technology is the

only way out to achieve our dream of broadband penetration.

Operators are also ready to gearing the guards, provided regulatory issues

are sorted out and low-cost end user CPEs and suitable service offerings are

available from vendors.

WiMax equipment such as base towers and CPEs are still expensive as compared

to the prevalent WiFi hardware.

Initiating the process, the WiMax forum announced its first certified product

during the first quarter of 2008, thereby providing a boost to the entire WiMax

ecosystem.

Service providers such as BSNL and Tata communications have already come out

with their RFPs for setting up huge WiMax networks for both rural and urban

areas. The actual implementation could be seen this year.

While Tata communications is looking at an investment of $500-600 mn by 2010

to target thirty cities in the next three years, to roll out broadband using

WiMax technologies, Bharti Airtel is also operating fixed WiMax networks across

nineteen cities.

Idea Cellular is also looking at WiMax as a potential medium and completed

its trials using WiMax. However, due to spectrum limitation the bend of the

industry has not yet been clear.

TRAI has also recommended the effective utilization of the local loop owned

by the incumbent operators and the deployment of wireless broadband technologies

to boost broadband penetration in India. It has also invited the spectrum for

wireless broadband technologies such as 3G and WiMax to be allocated to service

providers on a priority basis to fuel broadband growth.

A majority of big operators have already undertaken 3G trials (WCDMA/HSPA and

CDMA EVDO) and await the policy from the government to roll out full-fledged 3G

networks.

IP backbone and WiMax backhaul will be widely used in new built networks as

complimentary to optical and microwave transmission.

Reduction of excise duty on all telecom equipment from 16-8% also acts as

critical in making India a global hub for international manufacturing.

Network design and deployment techniques for WiMax, which is significantly

different from those required for the regular PTMP systems like MMDS, are also

posing concerns to the industry.

Because of cutthroat competition in the telecommunications industry, there

has been a lot of pressure on profits. Market differentiation and cost reduction

could be the key areas to increase customer value.

Furthermore, a unified core network for these access technologies can provide

a seamless, high performance service delivery system with lower costs and added

value for subscribers.

It is expected that in FY 2008-09 the price difference between WiMax and DSL

will reduce as a result bringing about a drastic change for WiMax in terms of

acceptance.

Service providers also need to look at all avenues for cost reduction,

including infrastructure implementation costs, because of heavy competition in

the end user deliverables. This calls for revisiting pricing for some service

deliverables. However, increase in business volumes would amply compensate for

any reduction in margins.

It is also expected that faster introduction of WiMax will make it possible

to grow beyond mobile voice services in an affordable and broad-based manner.

The growth drivers for WiMax include the increasing need of high-speed data

connectivity in the enterprise and domestic sectors, emerging applications such

as IPTV and MMS that drive the bandwidth requirement, and non-availability of

quality cable network (includes both copper and fiber).

No doubt, WiMax as a technology has a potential to upload and download at a

much faster speed as compared to broadband services. With its help, numerous

applications can be used including “last mile” broadband connections, hotspots,

and high-speed connectivity for businesses and customers; further, huge

investments might also not be required.

Considering the Indian requirements, it could act as a good option to provide

data services to masses, not to forget the limitations of infrastructure and

time. It offers the reliability of delivery, quality of service, and

concurrently handles multiple applications.

An increasing number of embedded WiMax laptops and positive government

policies could become important factors in deploying WiMax networks. Besides,

affordable broadband connectivity and increased awareness of broadband

capabilities can also drive the broadband incursion in India.

However, spectrum is going to be a grave impediment for the deployment of

WiMax in India and the regulators need to understand the urgency of providing

the same.

Jatinder Singh



jatinders@cybermedia.co.in