There are just 37 million fixed lines in India, which is why it is not surprising that every Indian based operator is looking for new ways, potentially wireless ways, of bringing in broadband.
So it comes as no surprise that state-owned Indian telco MTNL is following its compatriot BSNL down the franchise path for WiMAX, seeking initial bids from potential technology partners. In order to keep a deployment a cheap as possible it wants the vendor to bear much of the cost of the equipment in return for a revenue share from the completed network.
MTNL wants a single vendor in each city, for seven years. It also needs partners with experience of marketing advanced services, given the sorry record in 3G uptake so far. A Mumbai-based analyst told Dow Jones: “Marketing of these high end services is very important, and MTNL, as a government-owned company, has been lacking in it.’
The telco’s tender document says: “This revenue share is only for providing broadband access to customers. All other revenue derived from various value added services shall be shared between the parties on mutually agreed terms.’ We presume that includes some video element or IPTV system, if viable but is mostly about voice VoIP revenues. ‘The proposed WiMAX system will provide fully converged broadband data and voice services such as access to internet, VPN clients,’ to tender document continues. The bidders must provide a guarantee deposit of INR150 million ($3 million), valid for at least three years, for each of the two cities, and cannot be an existing telecoms service provider in either, or sign similar franchise deals with another telco. The deadline is September 16.
According to The Times of India, MTNL has approached AT&T, BT, Cable and Wireless, France Telecom and Verizon. Deutsche Telekom, Telstra and Hutchison could also join the race, says the report ‘ the latter exited India when its sold its stake in Hutchison Essar to Vodafone.
MTNL is targeting 500,000 users for its WiMAX services by 2014. It will build out capacity for 100,000 users in each city in year one, increasing this to 250,000 in year two and 400,000 in year three. In the first year of commercial operation, the bidders should gain a minimum of 50,000 users in each of the two metros.
BSNL is also pushing ahead. It has started WiMAX roll-out ‘ fixed in 3.3GHz and mobile in 2.5GHz, working on a franchise model with equipment partners. It has worked with Telsima in phase one of its mobile project, and with various vendors like Soma in 3.3GHz. Now it is shortlisting suppliers ‘ which would also act as franchise partners in revenue share deals ‘ for its phase two WiMAX deployment. According to Indian newspaper The Business Standard three suppliers are in the running for the new deal, which could hit $1bn ‘ Huawei, Alvarion and Telsima (now part of Harris Stratex, and also a supplier to India’s Tata). Previously, Alcatel-Lucent and ZTE were also thought to be bidding.