Wireless In Local Loop

Wireless In Local Loop (WILL) is a

technology for the emerging markets that promises to bridge the gap between the telephone

densities of these nations with the developed countries. And it is not surprising that

China, India, Russia, and Brazil–in that order–are considered to be the biggest

markets for the technology.

According to a study by the leading

telecom market research firm, The Strategis Group, 13 percent of the WILL subscribers in

the world by the year 2000 will be in India. That is about 3.7 million lines which

translates to a market size of $1.1 billion, at a per line price of $300. Though the

figure seems too small today, the price is expected to fall to that level.

According to DoT’s perspective plans,

about 9.9 million lines will be added in the three years from 1997 to 2000. Assuming that

30 percent of these lines will be provided through WILL technology, the total number of

WILL-based lines comes out to be 2.7 million. At a price of $300 per line, the total

market size comes out to be $810 million. The difference between the two figures is

largely due to the delays that have marred the Indian telecom industry since 1996, when

the Strategis study was published.

But a few developments have taken place

since then and they will have their impact felt on the WILL market. The most important of

them is the opening up of the Internet services market for private ISPs. This will lead to

an increase in the percentage on high-speed access lines for data.

The present WILL technologies, towering

claims notwithstanding, are still not suitable for high-speed data traffic. The 3G

wireless technologies are still sometime away. Many private operators, who have

predominantly gone for WILL (more than 95 percent of total lines in the first year) and

have plans to continue with more than 85 percent of total lines as wireless in the third

and fourth year, will reconsider their decisions.

The lack of good access network of DoT

will provide a good opportunity for the fibre and DSL technologies coming sooner than

expected. This will affect the WILL market. The WILL lines as a percentage of total lines

in the private networks may drop to about 70-75 percent in the third year from the earlier

estimated 85-90 percent. That might bring the market size to about $700-750 million by the

year 2000.

The Technology Choice SIZE="2">

There are two distinct markets for WILL.

The DoT market and the private operators market. Both have different needs.

For DoT, the need is to hook as many

subscribers, expand the network to remote areas, and provide a telephone on demand. On the

other hand, a new operator has to roll out its network really fast with a minimum total

cost. And it has no existing infrastructure to support its plans. The entire network needs

to be built from scratch.

DoT needs both the

technologies–macro- as well as micro-cellular technologies. Macro-cellular

technologies to build coverage and ensure telephone on demand in rural/suburban areas and

micro cellular technologies to support the users in dense traffic regions in urban areas.

No wonder, DoT is planning to go for both.

DoT’s purchase is tender-driven with

reservations for indigenous systems. Pricing, hence, will be extremely important. This

segment will see all kinds of technologies and players. The possibility of opportunistic

alliances cannot be ruled out. All the companies have plans to try their hands in this

segment. This will make it highly competitive and the price may fall to below $500 per

line.

The other market is that of the private

basic service providers. So far, six operators have signed the licence and are in

different phases of their project implementation. Out of which four have finalized their

choice of WILL technology. While three have gone for CDMA, only one has gone for TDMA.

Hughes Ispat in Maharashtra has gone for Hughes’ own TDMA-based system. Two other

operators have also virtually decided to go for CDMA, though vendors are yet to be

finalized. So far, no supplier has bagged more than one order.

DoT Trials Company Â

Technology Â

Lines

   Year Â

Site Dassault Et   CT2    1,000    1995    Calcutta Dassault Et   CT2    1,000    1995    Vijayawada Qualcomm   CDMA    1,000    1995    New Delhi Nokia   DCS 1800   –    1998    Chennai Ericsson   DECT    30    1997    New Delhi Ericsson   IS-136    1,000    1998    Bangalore ITI-Tadiran   Proprietary    –    1996    New Delhi IIT Madras   CorDECT    100    1997    Chennai Lucent   CDMA/Airloop    20    1996    New Delhi Siemens   DECT    240    1997    Noida SAT/Precision   CT2    –    1996    Noida Hughes   IS-136    –    1997    Pune Shyam Telecom   CorDECT    1,000    1998    New Delhi Crompton Greaves   CorDECT    1,000    1998    New Delhi

The new operators have requirements that are very different from those

of DoT. The priority before them is to build the network fast, have as much coverage as

possible, and at a minimum cost. Micro-cellular technologies like DECT and PHS, whatever

the equipment suppliers say, are preferred only when you have some existing

infrastructure.

Otherwise, connecting the base stations become costly and

time-consuming. However, it is wrong to dismiss these technologies completely for private

operators. In the next two-three years, these operators will have to tackle high-traffic

generating business customers in certain areas. A solution like DECT may come in handy at

that time.

Why Is CDMA Winning?

The CDMA group will tell you it is clearly a superior technology. The

TDMA camp will give the reason as heavy lobbying by the American companies. Both are right

or wrong, depending upon the way you look at it.

Of course, in three of the four Cs that determine the quality of a WILL

technology, CDMA scores. CDMA is cost-effective for a new operator who is building up his

network from scratch. CDMA, of course, scores in the capacity front and the coverage is

also much better compared to the other competing technologies.

WILLs Of The Private Operators
Operator Â	Circle Â	Technology  Â	Vendor Finalized
Tata Teleservices Â	Andhra Pradesh Â	CDMA Â	Lucent
Bharti Telenet Â	Madhya Pradesh Â	CDMA Â	Motorola
Telelink Networks Â	Rajasthan Â	CDMA Â	Qualcomm
Hughes Ispat Â	Maharashtra Â	TDMA Â	Hughes Network Systems
Expected
Essar Commvision Â	Punjab  Â	CDMA  Â	–
Reliance Telecom Â	Gujarat Â	CDMA Â	–

But another important reason why CDMA is succeeding is the number of

companies promoting it. The user has a choice. All the major North American companies

Lucent, Motorola, Nortel, and Qualcomm are solidly behind CDMA.

What will further consolidate CDMA’s position is that the

migration to 3G technologies will be much smoother in case of CDMA networks as

CDMA—in different versions—is clearly emerging as the third generation digital

wireless standard—whether it is CDMA 2000, WCDMA, or B-CDMA.

With a crucial CDMA patent in Qualcomm’s hand and the differences

between Qualcomm’s stand and ETSI’s stand, the future of WCDMA at the time of

writing is uncertain. This will also help CDMA.

The Forecast

• The average cost of WILL equipment will drop to $300 per line by the
  
  year 2001.

• IS-95 CDMA will continue to be the technology of choice.

• CorDECT will be used by DoT and a few operators.

• While American and European companies will dominate in the
  
  infrastructure equipment market, Asians will give them a tough challenge in the handsets
  
  market.

• The 3G technologies will make their appearance in India soon after
  
  they are unveiled. Only those 3G technologies that provide a smooth migration path from
  
  the existing technologies will succeed.

• The private operators will reconsider their decision to continue with
  
  WILL for three-four years, particularly in markets like Gujarat, Maharashtra, and the
  
  southern states as demand for Internet access in cities will see fibre and DSL sooner than
  
  expected.