Bsnl Will Supplement Wimax Offerings With 3g !

[Honest 836]

WiMax, 3G may ring in more revenue for BSNL

11 Aug, 2008, 0110 hrs IST, ET

MUMBAI : WiMax and 3G (third generation) may be considered competing technologies, but for public sector Bharat Sanchar Nigam (BSNL), the two will co-exist and will be targeted at different user groups.

WiMax is expected to generate higher average revenue per user (ARPU) per month to BSNL as it offers higher data speed at lower capital expenditure. BSNL expects WiMax to be a hit in rural areas where the public sector monolith has deep penetration. Currently, BSNL’s ARPU from wireless services is around Rs 200 and from wireline is Rs 350.

While most operators choose one of the two technologies to offer data applications and services, BSNL will supplement WiMax offerings with 3G.

“For those requiring speeds of 2 mbps per second, 3G will be made available. It will be more a technology for tier

I cities. WiMax will give much higher data speed and is also very suitable for rural areas where laying cables is difficult,” BSNL CMD Kuldeep Goyal told ET.

WiMax or Worldwide Interoperability for Microwave Access is a wireless communication technology, which can offer high speed connectivity about 50 km radius. 3G, on the other hand, is enhanced data application along with multimedia. Both allow high-speed internet surfing, movie and music downloads and video streaming.

DoT is said to have allotted both 3G and WiMax spectrum to BSNL. However, the operator has not yet been informed about it.

“For 3G, we are planning five million lines to begin with. It will cost us around Rs 3,000 crore. Initially, niche customers will opt for it as they’ll be able to afford it.

In phases, we’ll offer 3G in semi-urban and urban areas. With rising volumes, more people will be able to afford it,” he said. Mr Goyal said the company will enter into tie-ups with handset vendors for 3G devices. “We’ll offer bundled handsets for 3G. Tariffs will be high initially, but will reduce as volumes build up,” he added.

BSNL is planning to roll out services within six months after receiving 3G equipment. These five million lines are part of the 45 mn lines tender floated in 2006. Equipment vendor Ericsson is providing 60% of these lines.

For WiMax, BSNL has awarded contract to US-based WiMax solutions firm Soma Networks to install equipment in Gujarat, Andhra Pradesh and Maharashtra. “We will share revenues with Soma Networks. WiMax services will roll out by the end of this year,” Mr Goyal said.

BSNL has also floated another tender for providing WiMax services in 1,000 out of the 6,000 blocks in the country. “We have shortlisted some companies and asked them to do proof of concept. By December, we will award the contract,” he added.

BSNL and Mahanagar Telephone Nigam (MTNL) have not bid for the 3G and WiMax spectrum unlike other operators. They will, however, have to pay the price to be paid by the highest bidder.

As of now, they seem to have got a headstart over private operators who can float tenders and begin operations only if they emerge a winner in the bidding process.