BSNL Gears to Meet LTE Challenge

As state-owned operator Bharat Sanchar Nigam Ltd. (BSNL) prepares to commercially launch its WiMax network in India, it faces a number of key challenges, with the potential role of in the Indian telecom market high on the list.

That threat has arisen since 2010's auction of Broadband Wireless Access (BWA) spectrum (in the 2.3GHz band) that is suitable for either WiMax or LTE TDD deployments. Recent developments suggest that the auction winners are opting for TDD LTE-based strategies and could have networks up and running this year, potentially leaving WiMax as a secondary wireless broadband technology. (See Vendors Fight for LTE TDD Deals, , , , and .)

"We have to meet the LTE challenge and have a clear technological roadmap to move to the next technology. Besides this, we are also facing challenges in roaming and bandwidth issues. We have to rethink how to market our capacities," says RK Agarwal, director of consumer mobility at BSNL, during a recent WiMax Workshop.

BSNL already holds licenses for BWA spectrum in a higher frequency range (2.6 GHz), though it has had to pay the same amount the private operators shelled out for their 2.3GHz licenses. The 2.6GHz radio band is believed to be unsuitable for LTE TDD, but potentially suitable for FDD LTE.

BSNL faces another issue with its WiMax offerings -- the cannibalization of its other services. The state-owned operator offers competing CDMA EVDO services that are an alternative to mobile WiMax, while its fixed-line DSL service is an alternative to fixed WiMax in areas where copper plant has been deployed.

Not surprisingly, BSNL has been struggling with the business case for WiMax. In 2010 the company threatened to scale down the government-led WiMax project to connect 62,000 Common Service Centers (CSCs) that serve rural villages, unless the government increased its financial support of the project. BSNL has already set up 1,000 base stations for this project, and plans to increase this to 6,000 by the end of 2011. For WiMax in the urban areas, BSNL has opted for the franchisee model, where it works with partners that deploy the access infrastructure and market and provision the services. (See .)

"We would be in a position to commercially roll out WiMax networks in the urban areas by the end of March 2011. We hope to have two lakh [200,000] subscribers in the first year of operations. Initially we would be launching in the main cities," Agarwal told Light Reading Asia.

However, Agarwal seems to be too optimistic with his timeline. Informal interactions with BSNL's WiMax team, as well as with its franchisees, reveal that the rollout is unlikely to happen as soon as March.

Starnet Communications is one of the franchisees, with a license to run BSNL's WiMax operations in three circles (service areas) -- Chennai, Haryana and Himachal Pradesh. (See for more on India's circles.)

"The Proof of Concept is likely to be finalized by March and [after that] we would need security clearances. I think we would be able to launch by June this year. We would be setting up 1,800 BTS [base stations] in the first year. We are exploring the options of deferred payments, vendor finance and revenue-share models to reduce our capital expenditure," says Starnet's CEO Shankar Kambam.

Gagandeep Kaur, India Editor, Light Reading