Over the week of February 21st I had the opportunity to attend the WiMAX Network Deployment Workshop in New Delhi-India, hosted by the WiMAX Forum and BSNL. Over 130 executives (50% operators, 38% vendors and 12% others) participated in the event. Operator attendance was dominated by BSNL executives representing the different telecom circles in India; more than 25 BSNL executives attended the workshop.

The WiMAX Forum and BSNL invited representatives from leading WiMAX operators like Packet One Networks, UQ Communications and Sprint to share their experience and expertise. Representatives from vendors Samsung, Aptillo, ZTE, Motorola, Green Packet, Sequans, Huawei, Bridgewater Systems, Alvarion, Intel,  and Elitecore also shared their insights about deploying successful WiMAX network in India.

The two-day workshop was intended to provide BSNL franchisees with an opportunity to learn about the detailed process involved in deploying WiMAX networks in India. The goal was for all the BSNL franchisees to gain an understanding of the steps involved in determining ROI, perform a site survey and analysis, planning and provisioning a network, and learn about the best practices required for ensuring a profitable network deployment in India. 

During the workshop there was much discussion about BSNL’s WiMAX network rollout challenges in India. The current challenges for BSNL are related to indoor coverage, device compatibility, affordable devices, roaming (inter-operator, inter-network and international), and roaming with 3G.

The device usage was another topic discussed threadbare during the workshop. One of the most vital components contributing to the operator’s WiMAX business case is the selected portfolio of WiMAX devices. Operators grading WiMAX devices should form selection criteria across five key attributes: segment, performance, convenience, control and reliability. These attributes play a significant role in delivering key operator and end-user benefits. 

Most WiMAX operators will employ a range of WiMAX devices with varying features, functionality and price points to attract targeted customer segments. Whether the operator is looking at top-tier devices for advanced users or value-based devices for more basic application, it is vital that the operator selects devices that acceptably deliver these five attributes. The devices that compromise on these attributes can quickly compromise the health of the overall WiMAX system, increase the cost of ownership for the operator, and lead to a substandard end-user experience. 

At the end of February 2011 BSNL had 13K WiMAX subscribers – 10K urban and 3K rural. BSNL, which acquired its BWA spectrum almost two and a half years ago, has not been able to take advantage of the lead it had over private players due to delays rolling out its WiMAX network. Though BSNL currently has very few WiMAX subscribers, it is in the process of deploying more base stations to support millions of users over the next few years. BSNL expects to commercially roll out WiMAX networks in urban areas by the end of March 2011. It hopes to attract 200K WiMAX subscribers in its first year of operation. 

A key take away during the workshop was that BSNL does not seem too keen to roll out LTE in the immediate future in India. However the delay in BSNL’s WiMAX network rollout is a cause for concern. BSNL plans to deploy 6,000 base stations in India by the end of 2011 for its rural network; it has currently deployed 1,000 base stations. The operator has opted for the franchisee model for its urban WiMAX rollout. The operator works with partners to deploy the access infrastructure and market and provision its services. The model was adopted initially for the three states and will now be adopted in 11 states across India. 

BSNL has committed to deploy 20K base stations over the next three years through the franchisee model. As it is the only operator in India with major WiMAX rollout plans and government support, Maravedis expects BSNL to be WiMAX’s savior in that country, provided it deploys WiMAX actively this year. Maravedis expects 2011 to be a make it or break year for WiMAX in India.

BSNL is currently facing many challenges, the biggest being the tariff war that has lowered its revenues. During the fiscal year ending March 2010, the company earned a total revenue of Rs. 32,045 crore (US$6.92 billion) as compared to Rs.35,812 crore (US$7.73 billion) the previous year. It incurred a loss of Rs. 1,822.65 crore, which is mostly attributable to the increase in expenditure due to wage revisions and reduction in revenue from services.

With the arrival of more players in the Indian market, the telecom sector witnessed a hyper competitive tariff regime, and in fact the whole telecom sector faced a declining trend in the overall revenues. BSNL is making all-out efforts to reverse this trend. The operator’s major initiative to increase revenue is allowing other operators to share its infrastructure to minimize OPEX on infra facilities and optimize the use of assets.

The coming period will be quite challenging for BSNL, with private players entering the 3G services space. After the first mover advantage that the incumbent secured for 3G services, it now must face fierce increasing competition from private 3G players and soon, TD-LTE entrants as well.

For more information on BSNL and the top 4G operators worldwide, please visit www.4gcounts.com 

MARAVEDIS is a leading analyst firm focusing on disruptive technologies including smart networks using 4G, LTE, WiMAX

Author: Basharat Ashai, Market Analyst, APAC & MEA