Ronnie05's Blog

Exploring the reasons behind BWA launch delay in India

Posted in Industry updates by Manas Ganguly on September 6, 2011

Broadband wireless access, a Rs.40,000 crore dream to offer high speed internet, media streaming and video services to users has been in the horizon for an year now. Inspite of the great big promise, there hasn’t been much that has happened on the BWA space. The eight operators who had invested in BWA, the govt bodies are still searching for solutions and answers in terms of technology, time of rollout and business model, respectively. Most of the operators, after getting the BWA license in June and spectrum in September-October, had said they they would launch the services in the second half of 2011, but it is now believed that operators have deferred the rollout plans to the 1st or 2nd quarter of next year.

The isn’t good news for spectrum starved India, in light of the fact that regulatory and legislative bodies are much undecided about the future course of action in Telecom Industry in the country and there are punitive initiatives against a lot of the operators around the 2G spectrum sale and the subsequent revenue loss to the exchequer.

Here’s examining the factors that could be responsible for the BWA roll out delay in India:

1. Lack of Global Precedents: Over the last one year many operators have announced their interests in LTE and most of them have made some kind of trials and deployments. However, the issue lies that, no operator globally has launched BWA services on TD-LTE. China Mobile which had launched 7 TD-LTE trial tests and provisioned for infrastructure accordingly is said to have deferred the launch of BWA services until 2014. That could have a big setback for the Indian operators who were waiting desperately to look at a case study before they go full steam.

2. Lack of an eco-system:Looking at the Indian scenario, where the spectrum is scarce and the mandate of providing broadband services to the masses is herculean, the need of the hour is to select a technology which is flexible, cost effective and future ready. However, one of the other stumbling blocks to LTE implementation is the lack of a developed ecosystem. Infrastructure companies, Operators, Cloud Service providers, Content owners and licences and other technology vanguards need to stake a claim to the Greenfield that is BWA. It is believed that while China has been the first in terms of conducting trials on TDD-LTE, it would be India which would lead the large scale deployment of the technology. The launch of BWA services on LTE technology has been done through dongles because the product ecosystem for LTE technology is also, yet to be fully developed.

3. Where’s the money?(Lack of a business model): Another big reason for the delay in rollout of BWA services in the country despite of getting permission for last 1 year, seems to be the lack of clarity on the business model. 3G, which had been launched in India by most of the operators, has not seen the success that the industry had anticipated and the flop-show of 3G is definitely be at the back of mind of the BWA players. The 3G license holders have spent close to `68,000 crore on just getting spectrum and must have spent a huge some on laying out the 3G network but so far the operators have failed to roll out services in all of their licensed circles and in most cases 3G has not rapidly augmented data revenues. It has instead served as a complimentary channels for the voice channel.

4. Waiting for Big Brother’s first move:What has also influenced the thought with regards to BWA is the presence of Reliance Industries-the only player to win BWA licences in all 22 circles. It is expected the Reliance will be the first mover in terms of BWA launch and Reliance’s opening move might well set the stage for other operators to follow suit.

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