India is absolutely critical to the fortunes of WiMAX, and the level of uptake in the huge nation will help decide how prominent a position 802.16e takes in the overall wireless landscape in the next decade. There are many reasons for WiMAX supporters to be hopeful, but every time it appears that the technology may a major green light this year, the political disputes with which the Indian telecoms market is plagued throw another roadblock in the way. So last week, regulator TRAI clashed once again with the Department of Telecom (DoT), threatening the plan to auction mobile broadband licenses in 2.3-2.7 GHz this year alongside 3G rights — a dual-layer plan that could help underpin a wireless revolution for India, with operators able to roll out 3G and 4G services according to need, and with WiMAX likely to play a major role.
Despite the frustration of delays — which, if prolonged, threaten to allow LTE into the market — India remains WiMAX' biggest single hope for revenue and global influence. Most of the major operators and many small ones are already building out 802.16e in 3.3GHz for wireless DSL,enterprise and nomadic data services, with Tata, BSNL and Bharti among the players. The leading cellcos are likely to snap up the 3G licenses and some of the mobile broadband franchises, but these will be fully technology neutral and Tata, Bharti and Reliance have all expressed interest in using WiMAX as their primary '4G' system. Research by Rethink into operator spending intentions for mobile broadband indicate that, after 2010 (assuming the auctions go ahead by the end of this year), India will show the highest annual growth in WiMAX investment of any country in 2010 and 2011, and at that point will be the leading nation in terms of WiMAX roll-out. On the subscriber side, another report, this one from Springboard Research, estimates that India will be the largest market in the Asia-Pacific region by 2012, accounting for over 35% of service revenues across the area, and boasting 15.8m subscribers.
This is being driven by the urgent need in India for higher broadband penetration, since there is little reliable wired infrastructure outside major centers, so that growth has been slow. By contrast, growth in uptake of mobile services is exploding and the GSM operators that are enjoying the benefits — and shouldering the burden of keeping network expansion in line with demand — now aim to add data services to the mix as quickly as possible. Many have looked to WiMAX as a technology that could address both objectives — mobile data/internet at affordable prices, and stimulating broadband penetration — with a single network, and that could position large Indian carriers to leapfrog 3G operators in other parts of the world. They are likely to use GSM and 3G for wide area coverage, efficient voice and text, and basic data services, and WiMAX for fixed and nomadic broadband in underserved areas, and for full mobile broadband offerings in 'hotzones' of high demand, high income or business districts.
The vision that the DoT and the operators have, which encompasses a wide range of social and economic reforms, will drive rapid and innovative build-out — once the spectrum is available. The price of those licenses are likely to be high because so much is at stake, and could go even higher if the DoT gets its way and allows foreign bidders to participate. This is one of the disputes that is causing continuing tension between the government and the regulator, which blazed again last week.
TRAI sent off its recommendations on allocation and pricing of 2.3-2.7 GHz licenses (two blocks of 40 MHz each in total have become available) to the DoT on Friday, highlighting various disagreements. First, the two bodies disagree on who should be allowed to bid for WiMAX-class spectrum. TRAI wants to make the three main categories of providers — Unified Access Service License (UASL) holders, Cellular Mobile Service Providers (CMSPs), and ISPs — eligible as they can all offer broadband services. The DoT argues that there is a large number of UASLs and nationwide ISPs, so there is no need to include regional ISPs, as there will be plenty of competition for the licenses anyway. This would be against "the principle of equity and level playing field" responded TRAI on Friday, especially since the UASLs include regional telcos.
The second area of dispute is over the size of spectrum blocks to be auctioned — though neither is suggesting blocks that, in the opinion of most experts, will be enough to support true broadband or the visionary plans of the larger operators. While advanced WiMAX broadband models are generally accepted to need at least 20 MHz, and ideally 40-50 MHz or more, of spectrum, TRAI proposes allocating the band in blocks of 15MHz per operator, and the DoT in just 10MHz. This reflects the dilemma that will affect most regulators in mobile broadband — stimulate competition and innovative operators by offering a high number of small blocks, which are affordable but run the risk of failing to support a profit model; or issue just a few licenses, giving certain operators (almost certainly the largest) sufficient spectrum to support truly advanced broadband applications (the new Clearwire will have a huge 120 MHz average, the main reason why it will be able to deliver services that would bring down the network for many operators with more measly allocations in 2.5 GHz).
TRAI has now amended its recommendation, suggesting that 5 MHz blocks should be sold, but giving operators the option to buy up to three. It is also fighting for a one-stage sealed bid auction in each of India's telecoms regions or 'circles', while the DoT wants all successful bidders to match the highest bidder so the price is the same in each circle.
On one area TRAI and the DoT agree — the former has supported the government's proposal to raise the reserve price for a 10 MHz chunk from 1.12bn rupees to 5.25bn. With the 5 MHz option, that would make the reserve price for a nationwide network 2.63bn rupees, if an operator believed it could create a business model in so little spectrum.
All these disagreements may seem technical, but they could enmire the process in a lengthy tit-for-tat debate that could delay the chances for WiMAX vendors to generate new revenues in India and for operators to kick off their ambitious plans. And as if that weren't enough, TRAI has also slammed the DoT for the lack of a transparent spectrum management regime, claiming it has been kept in the dark about the progress in getting incumbents in the 2.5 GHz band to vacate their frequencies. TRAI said: "The results of the efforts made by the [DoT] to get the required spectrum bands vacated/refarmed from the incumbents are not available in the public domain. The Authority has time and again emphasized that in the times to come, the spectrum will become the most valuable and scarce resource as with the advent of new data centric applications, its demand will increase and there will be competitive users for the same band of spectrum. Therefore, there is a need to have a transparent, predictable and efficient spectrum management system for allocation and pricing of the spectrum."
TRAI has several times warned the DoT that delays in vacating the spectrum and auctioning it to new providers are putting India behind other countries in its ability to deploy WiMAX and start to address problems of inadequate broadband provision in many regions.