VSNL Plans to Offer Retail WiMAX Service by End of Current Fiscal Year

Indian telecommunications operator Videsh Sanchar Nigam Ltd. (VSNL) plans to start offering wireless-broadband access to retail customers in five major cities by the end of the current fiscal year ending 31 March 2008, Dow Jones reports, citing a company executive. VSNL said it will offer the new wireless-broadband service through WiMAX. India's capital, New Delhi, and its surrounding areas, the western city of Mumbai and Bangalore are three of the five cities where VSNL plans to offer WiMAX services to retail subscribers. Planning for the roll-out is under way and the company will also finalise the rest of the two cities once its first phase is complete with these three cities commencing services, said Srinivasa Addepalli, vice-president of corporate strategy. The company, however, is still waiting for the spectrum policy to be announced fully before it starts rolling out commercial services for retail customers, said Addepalli. VSNL has so far sourced WiMAX equipment, such as base stations, from the U.S.-based Telsima Corporation. The company is also talking to two to three other multinational equipment vendors to meet its further requirements when it expands the WiMAX service offerings. VSNL provides domestic and international long-distance voice and data transfer services to corporate customers, and internet and broadband services to corporate and retail consumers.

Outlook and Implications

Internet service providers in India have so far offered broadband-internet access to retail customers only through fixed-line infrastructure, but companies like VSNL, Bharti and Reliance Communications are keen to deploy wireless-broadband networks as they are cheaper to roll out, particularly in rural areas. Testing of the technology is already being conducted, but it is for the government to decide when the policy on the matter is cleared and when the spectrum will be allocated. The Indian authorities are currently examining the telecoms regulator's recommendations on spectrum allocation to operators for 3G mobile services and WiMAX before coming out with a policy. The government is likely to announce its policy in the third quarter of this year. The Ministry of Communications and IT has set a target of providing nine million broadband connections by this year-end and 20 million by the end of 2010. With a population of more than 1.1 billion, India had only 2.10 million broadband connections at end-2006. Both the government and telecoms companies have high hopes for WiMAX, which would help offer wireless broadband access in rural areas where provision for wired connections is difficult. With the announcement of the new spectrum policy, telecoms companies hope there will be a rationalisation of charges. The spectrum given to internet service providers in the 3.3 GHz band is expensive and hence it is not viable to offer wireless internet services over this band to retail customers. VSNL last week said it had become the first Indian company to offer WiMAX services by rolling out commercial operations for large-to-mid-sized companies in the southern Indian city of Bangalore. Expensive spectrum in the 3.3 GHz band is the reason VSNL will offer WiMAX services in this band to the enterprise customers only, according to Addepalli. The company will extend the wireless broadband services to its corporate clients in 120 cities across the country in the current fiscal year.