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And so broadband wireless access (BWA) was a footnote, a dull sequel in June of the high-profile 3G spectrum auction that had brought nearly $15 bn into the government's kitty in May.

But the bigger story is that wireless broadband will finally happen. And it will be a game changer for India.

Unlike 3G data, this isn't just for mobile executives. It will drive rapid penetration of fixed-line broadband in areas outside wire-line reach. Broadband will ramp up in the year ahead-up fivefold from its abysmal one percent penetration in India.

BWA, using technologies like LTE ("3.9G") and WiMAX (4G), allows high-speed internet access, IP telephony, TV and other multimedia services. Unlike cellular telephony, it is not designed for high mobility, though it can support it. What it gives you is broadband access where there is no suitable wire-line.

Despite our over 50% mobile penetration, India is really challenged on wireless data. Wi-fi spans the world, excluding India. There are few public hot spots outside our offices and hotels (which fleece you, contrary to the global trend of free wi-fi). Mobile users had to use snail-pace data cards, now replaced with 3G data modems.

For those who came in late: After picking up nearly $15 bn for the 3G spectrum auction in May, India closed part two of the auction-for wireless broadband, at Rs 38,300 crore ($8.5 bn). Bidding for two slots of 20 MHz each of spectrum across India were the usual suspects: Airtel, Reliance, Idea Cellular, Aircel, Vodafone and Tata. Anil Ambani's Reliance Infocom mysteriously withdrew. Vodafone dropped out when the prices "went beyond rational levels".

Poor broadband penetration has held back India. Wireless can help fill the gap

The highlight was the unknown 'Infotel Broadband Services', which picked up the sole pan-India license of all 22 circles. The ADAG withdrawal mystery was solved when Mukesh Ambani's Reliance Industries announced its $1 bn buyout of Infotel. How sweet, said everyone: Anil withdrew to give Mukesh a chance...

Aircel won eight circles, and Airtel and Qualcomm got just four each. Mumbai and Delhi got the highest amounts, of over Rs 2,200 crore each. With 3G and broadband, the spectrum auction license fees added up to nearly $23.5 bn for the government. As with 3G, the government-run BSNL and MTNL had got broadband wireless access (BWA) spectrum well ahead of the private sector operators, and they'd have to match the winning bid in each service area.

Cheap Broadband
Now how will the players recover the license fees, along with equipment and rollout costs? That is the genius expected of Indian operators: In this low-ARPU market, they have to do it, and still keep their services competitive. India's short mobile history, since 1995, has shown that they can.

What does all this mean for the Indian citizen?

From the investments, you'd guess: overpriced services. But that can't work. Offerings have to be competitive with wire-line broadband, so we're looking at some very long break-even periods. The good thing is that the sole pan-India player is now backed by deep pockets.

So, by end-2010, we'll see wide availability of true broadband across towns. Today, even Delhi does not have good broadband everywhere. That will change. And the bar will move up to 1 Mbps unlimited as the minimum. Airtel's already selling 4 Mbps unlimited wire-line broadband for Rs 1,399, and others have even cheaper plans. Wireless broadband has to match those prices. (BSNL now has a Rs 99 rural offer, linked to the USO obligations.)

By end-2010, increased competition and availability will force prices down to the Rs 299 level for 1 Mbps unlimited broadband, wire-line or wireless. That will take affordable high-speed broadband beyond the cities.

Poor broadband penetration has held back India's education, government services, citizen empowerment, and the true progress of democracy. We don't have the wire-line network to make the big leap. Fiber to the home isn't happening in the near future, for nine-tenths of India. Wireless can help us jump across that last mile.

Cheap broadband alone will not drive penetration (just as broadband alone can't engender democracy, as China has proved so well). It's already there in major cities and penetration is still low there. We need applications. But I'm optimistic about the ramp-up, driven by a host of apps, from government services to entertainment. It's all gradually coming together now.

Prasanto K Roy
pkr@cybermedia.co.in
Chief editor at CyberMedia (publishers of Voice&Data) can be found at www.pkr.in and twitter.com/prasanto