WiMAX majors queue for BSNL's favors and Indian entry
Published: 3 December, 2008
With India set to be WiMAX's most valuable market by 2012, industry players are looking for a way to cash in, and state-owned operator BSNL's new franchise model may give them an entry point.
The company, which has been guaranteed 20MHz of 2.5GHz spectrum for its Mobile WiMAX deployments, in addition to existing activities in 3.3GHz, has already issued two tenders for equipment, but is looking to share cost and risk by adopting a franchise system in 16 of its telecoms 'circles' or operating regions.
This approach, which is also taking hold in other emerging WiMAX markets like Russia, should accelerate roll-out and reduce risk for the license holder, and also attract the cash and expertise of foreign partners.
The operator said this week that over 20 vendors, smaller carriers and integrators were interested in joining its franchise program, under which they would use BSNL's spectrum and infrastructure to offer WiMAX-based services, under a revenue sharing agreement. They would also be expected to supply or help finance equipment. It has already tested the model with supplier SOMA Networks in Gujarat, Maharashtra and Goa, and Andhra Pradesh, and will expand it to 16 of its circles in total.
Among the potential partners now being evaluated are big WiMAX names like Motorola, Alcatel-Lucent, Huawei and Intel, said BSNL, as well as local firms like Adina Telecom, Wellcom Communications and Digitelco. Many of these will be looking to be the mandatory local partner for an international player and so boost their own chances of success - indeed, some companies will have been created specifically to offer a foreign giant a route into India, in return for a generous equity investment, a pattern that was also seen in recent new 2G auctions.
BSNL issued its first Mobile WiMAX tender in late 2007, and its second phase tender in September this year. The first was mainly for rural applications, and the second phase for urban areas in the operating regions or 'telecoms circles' of Punjab and Kerala. In total, BSNL plans to spend at least $750m in the next two years, with the objective of reaching one-sixth of India's population with Mobile WiMAX by 2012.
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