Although termed by many as one of the hottest technologies and the only
wireless access media that can facilitate large-scale broadband deployment,
WiMax is unlikely to see a commercial deployment in India until the early next
year.
Indian operators, who are betting big on WiMax or even eyeing at it to
complement their existing DSL-based broadband offerings, cannot expect to deploy
it commercially unless they overcome the hurdles related to the allocation of
spectrum and availability of certified standard equipment that can work in a
multi-vendor environment. In fact the two issues are intertwined and lead to the
high cost of WiMax equipment, a factor that would be a major hurdle for
operators looking at mass based business models.
Frequencies Too Many
The availability of the right spectrum and in right amount is the key to the
success of any wireless technology, and WiMax is no exception. The case of WiMax
is a complicated one in the sense that as of now WiMax equipment are meant to
operate in a scattered spectrum environment. In other words, there's no single
frequency band common across the globe for WiMax equipment. As things stand
today, the list of frequencies that a WiMax equipment would need to incorporate
is a long one and includes 2.3 GHz, 2.5 GHz, 3.4 GHz, 3.5 GHz, 3.6 GHz, 5.4 GHz,
5.8 GHz and possibly others such as 700 MHz and 900 MHz. This scattered spectrum
environment means that issues related to interoperability cannot be sorted out
unless spectrum is harmonized. It also means that equipment vendors would have
limited ability to drop WiMax equipment prices.
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WiMax Forum, a nonprofit industry organization comprised of vendors and
service providers, considers global harmonization or the uniform allocation of
spectrum worldwide as crucial for lowering equipment costs because radios are a
major cost component in developing WiMax Forum Certified systems. The Forum is
hopeful that in the next two years (through the 2006 timeframe), a reasonable
level of global harmonization for broadband wireless access can be achieved in
the 2.5 GHz, 3.5 GHz and 5 GHZ spectrum bands.
Broadband operators and vendors across the world feel that the 2.5 GHz and
3.5 GHz frequencies would be ideal for WiMax. The first of the products that
will be certified by the WiMax Forum in the months ahead will operate in the 3.5
GHz band. Certified equipment for 2.5 GHz and 5 GHz band (U.S.) are expected in
2006.
In several countries across Asia, Europe and Latin America, operators are
building wireless broadband networks that would operate in these bands. The 2.5
GHz band is being used in some Latin American countries including Mexico and
some Asian countries and in Lebanon in the Middle East. In Europe, operators
such as Altitude (France) and Iberbanda (Spain) are building broadband wireless
networks in the band with the intent of migrating them to certified WiMax. The
3.5 GHz band is also operational in Latin America, China and Canada.
However, it would not be a cakewalk for operators to get governments and
regulators to open these bands for them. For instance in Europe, the 2.5 GHz was
set aside as an expansion band for 3G and is due to be allocated across the
continent by 2008. Even though the European Commission seems to agree with the
3G operators' contention that 2.5 GHz is exclusively meant for 3G
technologies, it's going to be tough call for WiMax operators as 3G operators
are lobbying hard to ensure the bands exclusivity for them.
India: No Frequency So Far
Despite all the noise about making broadband available to the masses, and
the Union Communications and IT Minister, Dayanidhi Maran, posing positive on
wireless broadband, WiMax has failed to gain the attention that it deserves. The
spectrum allocation for WiMax is yet to take place.
While the Broadband Policy, announced by the government last year, recognizes
the role of wireless in the spread of broadband, there was no spice in it that
could excite WiMax enthusiasts. The policy only talked of de-licensing 2.40-2.48
GHz band and 5.15-5.35 GHz band. Operators have shown no keenness on these
unlicensed bands. Though the National Frequency Allocation Plan has made some
provisions for the use of 2.5GHz and the government has opened up 3.3 GHz,
leading broadband operators such as Bharti are more inclined towards the 3.5
GHz. This is because the first set of WiMax equipment is meant for operating in
this band.
Arguing that in a country like India, WiMax holds enormous potential to
extend broadband into areas that are underserved or not at all penetrated owing
to a variety of reasons, the Internet Service Providers Association of India
says that as most of the development for WiMax is being done in the 2.3-2.5 GHz
and 3.4-3.7 GHz bands, it would be only proper to make enabling provisions in
the upcoming National Frequency Allocation Plan for case-by-case consideration
for such systems.
High CPE Cost A Dampener
Besides the issues relating to spectrum, another major hurdle that broadband
operators would face is that of the cost of WiMax Customer Premises Equipment (CPEs)
that would account for around 50-60 percent of an operator's capex. The cost
of WiMax CPEs is likely to remain on the higher side for another 2-3 years. As
such, operators would find it difficult to roll out WiMax on a mass scale. At
best, they can use it to complement their existing DSL or Ethernet based
broadband offerings.
Compared to a DSL modem that costs less than a $50, the first set of WiMax
CPE would cost $350. According to WiMax Forum, the first generation of WiMax
Forum Certified CPEs is expected to be outdoor-installable subscriber stations
akin to a small satellite dish. These are expected to be available in late
2005/early 2006 and priced around $350. The second generation of CPEs will be
indoor self-installable modems similar to a cable or DSL modem and will be
priced at around $250 and are expected to be available in 2006. Third-generation
CPEs will be integrated into laptops and other portable devices. Thye are
expected to initially cost approximately $100 and will be available in between
2006-2007.
Given this high cost, it is unlikely that India would see a major
breakthrough in WiMax deployment. In the current scenario, the lowest CPE cost
that an operator can offer (by working on different business models) is around
$205 that is expected to go down to $81 by 2010. Given this, even though WiMax
is on the radar of almost all the leading operators in the country with each one
either doing trials or planning, it is unlikely to gain any precedence over
their DSL or Metro Ethernet based initiatives. WiMax would take years to attain
the level of maturity that DSL and Metro-Ethernet based technologies have
attained in terms of technology and cost.
For WiMax-based broadband services to roll out without any hitch, all issues
relating to spectrum allocation would need to be sorted out before hand. On
other hand, as of now equipment prices are too much on the higher side for a
country like India. Vendors would need to work fast on reducing equipment prices
so that WiMax-based broadband services witness commercial deployment.