Globally, more than 500 telecom operators have announced their 4G technology deployment plans. As of December 2011, over 500 commercial Wi-Max and 54 commercial long term evolution (LTE) deployments were reported across the world, while over 300 4G network launches were under way. The Indian market, where broadband wireless access (BWA) spectrum was auctioned in 2010, is also catching up in terms of deployments. Of the eight BWA licensees, two – Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) – have already rolled out 4G networks on the Wi-Max platform. The other six service providers have opted for LTE and are gearing up to launch services in 2012.

Operators which missed out on BWA licences are likely to get another opportunity with the government deciding to auction spectrum in the 700 MHz band. The information and broadcasting ministry has reportedly agreed to vacate spectrum in this band, which is considered to be more cost effective than the spectrum allocated in the 2010 BWA auctions. Six operators were awarded 44 BWA licences in these auctions.

Speeding up

In a market where voice services have reached saturation levels, operators are keen to roll out high speed networks and capitalise on the first-mover advantage in the wireless broadband data space, which is expected to witness increasing demand.

Augere Wireless, which offers broadband services under the ZOOSH brand, claims to be the first company to have launched high speed services in the country in February 2012. It has launched LTE dongles for residential and business customers in the Madhya Pradesh and Chhattisgarh circles. Augere has partnered with Ericsson for its LTE-time division duplex (LTE-TDD) network roll-out. The company plans to invest up to $60 million over the next three to five years in 4G service roll-out in Madhya Pradesh.

Bharti Airtel, the country’s largest telecom operator, launched LTE-TDD-based 4G services in the country on March 20, 2012, starting with the Kolkata circle. This will be followed with launches in Punjab, Karnataka and Maharashtra. For network deployment and management, the operator has selected Huawei for the Karnataka service area, Ericsson for the Punjab circle, ZTE for Kolkata and Nokia Siemens Networks (NSN) for Maharashtra.

In December 2011, Reliance Industries Limited (RIL) had announced plans to offer low-cost high speed broadband services based on 4G by end-2012.

RIL is reportedly evaluating a bid for the reauction of 2G spectrum, after the Supreme Court cancelled licences awarded in 2008. Experts say that the combination of 4G data with voice can create a disruptive telecom market. A major limitation of LTE is that voice cannot be clubbed with it whereas Wi-Max players can offer voice as well as data. Experiments are under way to offer voice over LTE. These factors make 2G licences a valuable proposition for the company. Moreover, operators like Bharti Airtel and Aircel already have large 2G operations and may have a competitive advantage over RIL.

State-owned BSNL has, however, surrendered BWA spectrum for 17 circles to the Department of Telecommunications (DoT), which is likely to be auctioned along with spectrum in the 700 MHz band. Qualcomm, whose application to offer internet services was earlier rejected by DoT, has managed to obtain a stay on the cancellation of its 4G licences. The company has paid Rs 4.1 billion to DoT as dues of its Indian partner, Tulip Telecom, which would enable it to secure licences for offering BWA services.

Tikona won BWA spectrum in five key circles – Gujarat, Himachal Pradesh, Rajasthan and Uttar Pradesh (East and West). The company currently uses Wi-Fi technology in the unlicensed band to deliver broadband services. It offers fixed broadband services to 220,000 homes and 10,000 businesses, and plans to increase its subscriber base to 350,000. So far, the company has deployed around 42,000 base stations in 40 cities. It plans to increase this infrastructure base to 200,000 across 200 cities by end-2013. Tikona is in talks with equipment and chipset vendors, etc. to deploy a BWA network.

Aircel has no specific timeline for service launch, but intends to introduce 4G services in 2012. Currently, it is rolling out its 3G network.

Promising future

According to the International Telecommunication Union, BWA should be able to deliver download speeds of 100 Mbps to 1 Gbps. So far, download speeds of 70 Mbps have been achieved only in lab conditions. On the other hand, current 3G speeds are topped out at 14 Mbps downlink and 5.8 Mbps uplink. However, in India, operators are struggling to offer speeds of even 3 Mbps. LTE-TDD will provide the network speeds required by applications like mobile TV, high definition (HD) conferencing and HD video surveillance. “With 4G, one can expect higher quality videoconferencing and fast video downloads,” says Kunal Bajaj, director–India, Analysys Mason.

However, industry experts believe that it will take at least three-four years for BWA to be fully commercialised. Therefore, 4G services are likely to be patchy and expensive in the first few years, with the initial focus on metro cities.

In this scenario, the success of operators in the 4G space will largely depend on their differentiation strategies.

Most operators and vendors have already started focusing on the device market. Bharti Airtel launched a tablet worth Rs 9,990 in mid-2011, which has been priced down to around Rs 7,000. Reliance Communications has introduced a tablet that supports CDMA with a price tag of Rs 13,000. As the data market would largely constitute high-end users, vendors have also launched several high-priced devices globally. These are likely to hit the Indian market in 2012.

Service uptake is likely to be higher in the metros. According to Abhishek Chauhan, senior consultant, ICT practice, Frost & Sullivan, India’s LTE subscriber base is estimated to witness a compound annual growth rate (CAGR) of 258 per cent over the next five to seven years. LTE revenues are expected to report a CAGR of 220 per cent during this period. Low broadband penetration, poor fibre connectivity, high data speeds, and cost effectiveness of wireless technology are the key demand drivers for BWA services in the country.

There exists a huge demand for data services which cannot be met through 2G and 3G technologies (with limited spectrum). While 3G technologies like HSPA and HSPA+ will be able to meet these needs in the near to medium term, next-generation technologies like BWA are the long-term solution.

Conclusion

For a country of its size and the stage of economic growth it is at, India is lagging behind in terms of broadband penetration. Clearly, a coordinated approach by the industry and the government is crucial to remove the growth barriers and drive widespread adoption of broadband services.

The draft National Telecom Policy, 2011, by setting a target of 175 million broadband connections by 2017 and 600 million by 2020, has set the pace for future growth of these services. This, along with operator initiatives, will drive broadband growth in the country. The government’s decision to auction additional BWA spectrum is another positive step and will encourage competition.