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Currently, penetration of broadband services is very low. The number of broadband subscribers (with a download speed of 256 Kbps or more) was 2.67 mn at the end of September 2007, with a growth rate of 10.36% in the current quarter. But wireline broadband grew at just about 4.37%, clearly showing that even with a low speed of not more than 144 Kbps being offered to customers, wireless broadband is picking up. Looking at the trend, it can be safe to presume that once a faster rate of speed is offered through the WiMax route, adoption rate will also increase.

"India is an underserved market for broadband and hence WiMax will play a key role in improving broadband penetration in the country," says a Bharti spokesperson. This low broadband penetration is a clear opportunity for WiMax. But a clear policy is yet to emerge. All the service providers have already jumped into the fray and are deploying WiMax networks. If India is to reach anywhere close to the government's target of 20 mn broadband subscribers by 2010, it has to take the wireless route. And, as 3G spectrum is still not available to service providers, WiMax remains the only feasible alternative.

State of Deployment
The Tata-owned Videsh Sanchar Nigam (VSNL) has rolled out WiMax services in India. To begin with, the global communications company will offer the services to enterprise customers in Bangalore. VSNL will extend its WiMax network to about 120 cities across India for enterprise customers and in five cities for retail customers by April of this financial year. Reliance Infocomm or RCom has deployed WiMax in Pune and Bangalore. "We intend to expand WiMax to ten other top cities in the country by the end of this fiscal. We are primarily targeting SME segments in these cities," says a Reliance Communications spokesperson.

Airtel is operating fixed WiMax networks across nineteen major cities in the country. Sify has announced the deployment of over 700 WiMax base stations and 3,500 subscriber units to provide Internet access and video broadband services to residential, enterprise, and cyber cafe subscribers in over 200 cities throughout India. BSNL also has mega plans on the WiMax front, but no commercial deployments have happened so far.

Service providers are looking at WiMax as a last mile solution for their broadband services. By utilizing WiMax, they are looking at reducing the cost of laying cables until the subscriber premise. Reliance Communication spokesperson says, "We believe these technologies complement rather than compete with each other. WiMax begins where wireline ends."

Target Groups
Almost all private sector operators are focusing on WiMax to provide services to the SME segment and not to the retail customer, even in cities. However, the urban retail segment has started getting these services in cities like Pune and Bangalore, but not on a wide scale. "Airtel positions WiMax technology for last-mile access for providing basic services like broadband and VoIP to the enterprise, SME and retail segments," says the Bharti spokesperson. Commenting on the issues, Reliance says, "Currently, we intend to offer our WiMax network in 10-12 cities, with a prime focus on SME customers. The scope can be increased further as we go ahead." This lack of focus on the retail segment is particularly due to the lack of spectrum available. Operators plan to introduce services to the retail segment once the government makes sufficient spectrum available. "As a group, we have always believed in providing affordable connectivity solutions. Currently, our focus is on SME customers who are in need of last-mile connectivity, possible through WiMax," says the Reliance Communications spokesperson.

The Rural Story
On the rural connectivity front, most WiMax deployments have happened on a trial basis to facilitate e-governance projects. Reliance Communications says, "We are handling an e-governance project with the West Bengal government to provide e-kiosks in villages." Bharti adds, "WiMax is expected to play a key role in improving broadband penetration in India and providing services such as telemedicine, e-governance, and e-education in rural markets."

One such initiative is by Sakthi PURA and Microsense. They have deployed WiMax solutions to supply wireless broadband connectivity to remote villages in rural areas like the Pollachi region of India. The goal of the PURA initiative is to benefit more than two-thirds of India's population living in rural areas. These communities require wireless links with quality of service (QoS) for voice and video at distances of up to 25 km over hilly terrain. A minimum throughput of 2 Mbps is required for the longest links. The PURA initiative also encompasses, among other things, greater provision for roads and power, professional institutions, and realizing the best value for products and services of rural people.

Most service providers are of the opinion that equipment availability, CPE (indoor, portable, and nomadic) at right price points (economies of scale), performance, service capabilities and support will be key to the success of WiMax in India. On the economies of scale front, India does not need to worry as it has a huge customer base even with low penetration levels. If WiMax can reduce the cost of broadband and improve reach, garnering numbers to support economies of scale will not be an issue.

Most WiMax vendors are relying on India as a big market which will drive the future of WiMax. Huawei recently introduced low in cost WiMax CPEs in India. Nortel has launched very small WiMax devices for the SME customers to build their own office networks. Similarly, all other vendors are working to provide standardized low-cost CPEs. WiMax standards have been ratified by ITU, further accelerating WiMax deployment in India.

Wireline
Service providers are looking at WiMax as a last mile solution for their broadband services. By utilizing WiMax for last mile solution, they want to reduce the cost of laying cables till the subscriber premise. Whereas by not going whole hog on WiMax, they will be able to save valuable investment that they have made in their Wireline infrastructure. "We believe these technologies complement rather than compete with each other. WiMax begins where wireline ends," says Reliance Info spokesperson.

WiMax offers traditional wireline service providers cost-effective ways to expand their broadband service offerings to underserved areas. Using WiMax, wireline operators can cover rural and less dense environments where the cost of expanding DSL and cable wiring is prohibitive, as well as urban areas where it can be difficult to add wired connections to existing Multiple Dwelling Units (MDUs) such as high rise apartments or office buildings.

WiMax is also appealing to new entrants or mobile service providers who want to include services to the home as one of their offerings. Service providers have already expanded their CPE offerings to include the functionality of a Wi-Fi access point. This provides consumers with the advantage of sharing the broadband connection and the convenience of anywhere connectivity within the home.

Now, vendors are integrating WiMax and Wi-Fi in a single CPE where WiMax provides the backhaul and Wi-Fi provides the in-building coverage. CPEs with integrated WiMax and Wi-Fi provide an alternative solution for rapid deployment of broadband connectivity to homes and public hotspots. Another market for integrated WiMax and Wi-Fi CPE with potentially strong average revenue per user (ARPU) is temporary deployments such as trade shows, construction sites, and emergency sites.

Spectrum Issue
The biggest hurdle of the industry is spectrum availability, critical for realizing the retail business model. Today, Indian service providers have allocation in 3.3 GHz to operate broadband wireless services. However, the Indian regulatory body has still not taken any policy decision to allocate spectrum and quantify how much has to be given to service providers for operating WiMax-certified profiles in India. The globally used band for WiMax is 2.5-2.7 GHz, but, in India, this band is locked for satellite-based mobile and broadcast applications such as national emergencies and natural disasters. But, now the government is planning to free 2.5 GHz spectrum for WiMax.

What is available is the 3.3 GHz and 5.8 GHz which have been allocated to several IPSs. According to ISPs, these bands are good only for trials, and not for city-wide and commercial deployment. The government is to release higher band frequencies so that deployment can be made on a commercial scale, but government officials are confused as to how much and at what price should they allocate the spectrum. On the other hand, the Department of Defense has certain frequency bands under its belt which it is unwilling to give up at any price.

Spectrum Dilemma
The lack of a clear spectrum policy is the main reason behind the slow deployment of WiMax. Once a policy for WiMax is in place and spectrum is decided, the rate of deployment will increase manyfold. Most service providers have deployed WiMax solutions but currently all deployments are restricted to big cities, and are being utilised to serve SME and enterprise customers. Even though WiMax has been touted as a viable solution for rural broadband conectivity, current deployments are limited to providing e-gov services on pilot basis. None of the service providers has, so far, planned to serve the consumer through WiMax, even though no one is denying the potential.

On the rural conectivity front, none of the private operators has made any investment on WiMax. However, they are keen to do so once issues regarding spectrum, equipment, and price are sorted. As of now, it is a chicken and egg situation for the future of broadband-whether PC penetration will fuel the growth of broadband or the other way around. With computer prices coming down drastically, PC/laptop penetration is going to improve significantly. With this, the demand for broadband connectivity is bound to go up. Also, the prices of CPE for WiMax is presently very high acting as a deterrent for the wide scale adoption of WiMax. However, this is a very short-term issue and will be taken care of once large scale deployments begin.

Nilabh Jha
nilabhj@cybermedia.co.in