BSNL & WiMax

BSNL, the only company in India that has committed to the WiMax technology standard for its wireless broadband services, has decided to have a back-up plan in case all other operators in the country opt for upcoming long-term evolution (LTE) technology platform. BSNL, which recently awarded contracts to four companies — Teracom, Take Solutions, Adishwar India and Ampoules — to roll out WiMax-based broadband services on a franchisee basis, has introduced a clause in their contracts mandating them to shift to the LTE technology standard, if the latter were to emerge as the successful technology platform in India, an executive with the company said. These firms, which were selected through a bidding process, will share between 10-32% of their annual revenues with BSNL.
Worldwide interoperability for microwave access (WiMax) and long-term evolution (LTE) are two similar but competing technology standards. Both are considered to be fourth-generation (4G) technology platforms. Five of the six private players (except Qualcomm), which won broadband spectrum in the recent auctions, are yet to commit to either of these technology standards. US-based chipmaker Qualcomm has announced plan to rollout services on the LTE standard in the four circles where it has won broadband frequencies. Analysts and market watchers say that RIL — which acquired Infotel, the only company that holds broadband airwaves on a pan-India level — is set to opt for the LTE standard forcing others to follow suit. The BSNL executive said it was vital for the PSU to include this “safeguard clause” especially since it wanted its fourth generation offerings to be in line with ‘the industry’s choice’. “If only a single player adopts a platform, then it may be possible that the company can become isolated from an interoperability and roaming perspective. But, if some of the winners adopt WiMax, the scenario will be very different,” this executive said. This will be a blow to global WiMax lobby which has been looking at adoption in India to push for volumes which will bring down product costs. Another reason behind BSNL’s move to include this clause is that globally, many players who have opted for WiMax have said they will migrate to LTE when commercial deployments on this technology standard takes off. For instance, Russia’s leading WiMax operator Yota recently said it plans to switch to LTE as it expands its networks to more geographies.