Wireless Infrastructure: Dismal Performance

The wireless infrastructure segment in FY12 was dependent on 2G and 3G as one could not see large scale deployment of 4G network. In case of 2G, it was more of capacity expansion in B and C class circles whereas in case of 3G there was a lot of hope initially which died down as network was unable to deliver due to lack of proper backbone infrastructure. In case of 4G, lack of proper ecosystem delayed things and it is expected that large scale deployment will happen only in 2013, once operators launch their networks in couple of cities in this fiscal.

All the vendors be it Alcatel-Lucent, Ericsson, Huawei, NSN, and ZTE have focused on 2G and 3G. In 2G, the focus is on value added services whereas in 3G, the focus is on improving consumer's experience. Focus is also on improving backbone and access network so that consumer can get better experience.

2G/3G Deals

Alcatel-Lucent has in its kitty-CDMA network of RCom and Tata, GSM network of Uninor, BSNL's GSM network for the western region, and Mumbai network of MTNL. In the last fiscal, Alcatel-Lucent bagged an order of over `300 crore from Indian Air Force to deploy WCDMA based wireless network covering many air force stations across India through HCL. This is a captive 3G mobile network and will offer a lot of value added services to Indian Air Force. Once the network is completed, it is planned to be integrated with Indian Air Force network.

The company is managing GSM, CDMA, and backbone network of RCom. This is also the largest multi-vendor and multi-technology managed services footprint in the country. The company has also added Uninor for managed services and is looking after 8 circles. Alcatel-Lucent is managing Bharti airtel's enterprise network based on fixed WiMax technology. Recently, the company has bagged IN (intelligent network) deal for BSNL to be deployed in northern and eastern region. The company has already been managing BSNL's IN deal for the western region.

Apart from this, the company bagged IP deal with Bharti airtel. The IP win helps in creating access to network based on Carrier Ethernet technology (CEN) whereby delivering faster mobile broadband speed to its customers. The company has also bagged a major EV-DO expansion deal with one of the largest operators.

On 3G, Ericsson has ongoing deals with Vodafone, Bharti airtel, Idea, and Aircel and on 2G, the company has ongoing deals with Vodafone, Bharti airtel, Idea, BSNL, Aircel, Uninor, Etisalat, and others.

In FY12, Ericsson signed managed services agreement with Idea for another 3 years making it the largest managed services partner for Idea. The contract is valid for 5 circles (Mumbai, Jammu and Kashmir, Himachal Pradesh, North East, and Assam) and Ericsson will be responsible for managing network and field operations, operation and maintenance activities for 2G and 3G sites, network design and planning, network performance improvement, and program management for infrastructure.

Ericsson also signed up deals with Bharti airtel across 15 circles for 5 years. Under this new multi-vendor and multi-technology managed services agreement, Ericsson will operate, maintain, and provide services. In addition to the standard portfolio of managed services, Ericsson will also take responsibility for the intelligent network that manages Bharti airtel's prepaid customer base.

The 15 telecom circles to be serviced by Bharti airtel include: Delhi, Jammu and Kashmir, Haryana, Punjab, Himachal Pradesh, UP(W), UP(E), Rajasthan, North East, Assam, Karnataka, Andhra Pradesh, Tamil Nadu, Chennai, and Kerala.

Sistema Shyam Teleservices has extended its managed services contract with Ericsson and added 4 new CDMA circles (Uttar Pradesh (E), Uttar Pradesh (W), Gujarat, and Rajasthan). The agreement also includes management of fiber transport and wireline networks in Rajasthan. In September 2010, Ericsson has been managing multi-vendor wireless networks of Delhi and Haryana circle only.

Under the 3-year agreement, Ericsson will be responsible for network optimization, operations, and maintenance including field operations and 24/7 network service assurance, fulfillment of network service provisioning, customer problem management, and spare parts management.

With Ericsson's LBS solution, Aircel subscribers can get better localized information through Ericsson's mobile positioning system (MPS) for its 2G and 3G subscribers. Aircel users can now get real-time tracking, navigating information, and services while on the move. This is Ericsson India's first contract managing the location based services platform in a multi-vendor core network environment. As part of this 3-year contract for supply and support, Ericsson will supply its Mobile Positioning Center (GMPC and SMPC).

In 3G, Huawei has ongoing contracts with Bharti, Idea, Tata DOCOMO, RCom, Aircel, BSNL, and MTNL and in 2G, the company has ongoing contracts with Idea, Tata, RCom, Aircel, BSNL, and MTNL and majority of new operators like Videocon, MTS, Uninor, Etisalat, Loop, and STel. In both these cases, the focus was on capacity expansion or closing covering gaps. The cancellation of licenses by the Supreme Court will make a big dent in Huawei's revenues for FY13, as the company has a large number of new operator circles under its belt which will be affected due to cancellation.

NSN has a strong base in 2G as it has ongoing deals with Bharti airtel, Vodafone, Idea, Aircel, Videocon, and Tata and for 2G it has ongoing deals with Bharti airtel, Vodafone, Idea, Aircel, and Tata. NSN also leads packet core market as it handles data traffic for 250 mn subscribers. The company has implemented intelligent mobile packet core solutions for Bharti airtel, Datacom, Idea Cellular, Tata Teleservices, and Uninor.

The solution has helped operators in reducing total cost of ownership, maximizing revenue opportunities, and addressing growing bandwidth requirements. The company has implemented customer experience management (CEM) for Bharti airtel for optimizing and enriching user experience. For Vodafone, the company has implemented unified billing and charging solutions.

Keeping in view the broadband focus, NSN acquired majority of wireless network infrastructure assets of Motorola solutions in April 2011 and expanded its operations by adding new products and services. With Motorola's acquisition, the company is now also providing CPE equipment. On managed services, the company extended its contract in the fiscal with Bharti airtel for 5 years in 8 circles. Under the contract, NSN will manage and maintain Bharti airtel's 3G and GSM networks as well as iWAN (internet Wireless Access Network), the operator's enterprise broadband service.

ZTE has ongoing 2G deals with Idea, Aircel, Etisalat, and Tata and on 3G, the company has ongoing deals with Reliance and Aircel. In the last fiscal, ZTE won the world's first CDMA EV-DO Rev B

Phase 2 commercial contract from Sistema Shyam Teleservices (SSTL). The company has also won CDMA expansion contracts and EV-DO upgrade contracts for 10 circles of SSTL. The EV-DO Rev B Phase 2 commercial launch will commence from Rajasthan.

Compared to EV-DO Rev B Phase 1, the Phase 2 technology can further enhance the BTS cell capacity, spectrum efficiency and peak rate, achieving high speed rate as high as 4.9 Mbps in single frequency carrier, and 14.7 Mbps in 3 frequency carriers bundle. SSTL currently provides high speed mobile broadband services in over 150 towns across India and one has to see in how many cities EV-DO Rev B Phase 2 is deployed.

The company has successfully built and deployed an advanced VAS platform for Vodafone in India. With the completion of the platform, Vodafone customers can avail the Vodafone Newswrap, a mobile newspaper service.

4G Deals

On TD-LTE, Ericsson was the first to close deal with Augere to offer end-to-end TD-LTE solution including managed services for Madhya Pradesh and Chhattisgarh for 3 years. As per the partnership, Ericsson will plan, design, build, operate, maintain, and provide spare parts management for the 4G network in 14 cities. The contract includes the supply, installation, and commissioning of the network but as per the latest update the company had stopped all operational activities in India.

Bharti airtel has selected ZTE, Huawei, and NSN for Kolkata, Karnataka, and Maharashtra circles. ZTE has been selected to plan, design, supply, and deploy 4G network in Kolkata. The launch of broadband services in Kolkata was the first 4G launch in India and it allows Bharti airtel subscribers to experience high-speed wireless internet access that can support bandwidth intensive applications, support video streaming and high-definition video conferencing. Huawei opened its TD-LTE account by signing deals with Bharti airtel for Karnataka circle where the company is planning, designing, supplying, and deploying TD-LTE solutions.

NSN has opened its account by bagging Bharti's network in Maharashtra. This is considered to be the biggest deal as it covers one of the largest states. In case of Bharti, all players will provide network design, integration, commissioning, optimization services, and full set of care services including hardware, software, and competence development services.

On the other hand, Alcatel-Lucent has formed a JV with Reliance Industries to provide technology consultancy helping Reliance Industries to deploy pan-India broadband wireless access network in a holistic way. It is expected that Reliance Industries will start services by the end of 2012 and is in active discussion with vendor community for wireless equipment deals in this fiscal.

Manufacturing Facility

In the last fiscal both NSN and Ericsson were on an expansion mode. NSN expanded its Chennai manufacturing facility from 35,000 to 55,000 sq m and also increased its product lines to 33. The expansion helped NSN to export approximately 37% of the facility's production across Asia Pacific. It has also enabled the company to manufacture and distribute new multi radio and LTE products (GSM and LTE-ready 3G base stations and its FlexiPacket radio).

Ericsson's manufacturing facility at Kukas in Jaipur, Rajasthan is geared to supply 2G, 3G, and 4G equipment and manages production lines providing equipment for radio access network, core network, transmission solutions, and modules. Early last year, another SMT line was added to increase the production capacity. Ericsson produces the multi-standard radio base station RBS6000, an energy efficient compact site solution that supports all 3 technologies-2G GSM/EDGE, 3G WCDMA/HSPA, and 4G TD-LTE in a single package and the MSC server blade cluster that drastically boosts the capacity of the network and evolves it into an IP network.

Future Opportunities

Operators can implement cost-effective location based solutions (LBS) to meet security guidelines and deploy commercial services to generate revenue for operators. LBS is a big opportunity and if implemented in future will benefit companies like Ericsson, CommScope, Polaris Wireless, and Creativity Software. Presently, the operators have undertaken trials and depending upon DoT's new notification will deploy LBS. LBS can also be used by the operators to launch location enabled applications which would help both enterprise and consumers in the long run.

The fiscal will see big opportunities in 3G with respect to capacity expansion in existing cities and new capacity planning in new cities once the operators make their backbone network data ready. Even on 4G there is a big opportunity as operators will move from pilot deployment to commercial deployment.

With respect to 4G, ecosystem readiness will be the key for having large scale deployments.

Focus is also on improving customer experience with respect to different platforms. Also, smartphones are driving exponential growth in mobile data traffic which is driving the need for a convergent network of macro and small cell base stations and Wi-Fi offload.