BSNL To Step Out From Arena WiMAX

By October 19th, 2011 AT 10:05 AM

4th Generation telecommunications is about to begin in India, while BSNL asks Govt. to take back the BWA spectrum given to them and refund the money.

To address the issue BSNL sent letter to DoT offering to surrender the BWA spectrum in 17 circles, and to refund them Rs 8313.80 crore. BSNL will retain the spectrum in Maharastra, Gujarat, Haryana and Andra Pradesh. BSNL will continue to offer rural wireless broadband via WiMAX.

DoT also plans to auction this returned spectrum.

BSNL has problems with its WiMAX venture from the very first, as they are:

Spectrum Issue: BSNL & MTNL, PSU duo got BWA spectrum almost one year before the BWA auction in 2010. But the spectrum is given in non-standardized 2.4GHz band which is not popular. This band is not suitable for WiMAX or LTE and few equipments support this. At the same time private operators got the spectrum in 2.3 GHz band and will go for LTE-TDD way.

Problem with WiMAX:

Though BSNL rolled out WiMAX in certain circles, and it was committed to WiMAX, India is going to be LTE hub. All private BWA operators are said to be committed to LTE. Like LTE, there is no scope to 2G & 3G backward compatibility with WiMAX. Industry experts opine that WiMAX lobbies push BSNL to opt WiMAX, but it also makes BSNL isolated in interoperability and roaming arrangements.

BSNL WiMAX did not Take off Properly: BSNL wanted to offer WiMAX in a franchise route but the decision invites lot of controvercy. Ultimately BSNL had to scrape the tender processes.

Huge Loss: BSNL is under huge loss, in last fiscal BSNL had losses more than Rs 6000 crore – which is mainly due to 3G and BWA spectrum buyout and to pay employees’ salary. BSNL had highest net profit of Rs 10,000 crore in 2005-2006 and since then profit level has been falling.

Following BSNL’s move to surrender BWA spectrum, some questions have been arised regarding the future plans of MTNL and BSNL, future of those e-projects based upon BSNL WiMAX for wireless connectivity and the future use of the returned spectrum.

What will MTNL do?

In wireless broadband market, MTNL has only one product 3G/HSPA. Unlike BSNL, MTNL has not launched EVDO or WiMAX in any circle. It is expected that in LTE dominated market MTNL can not go with WiMAX and to roll out LTE they need spectrum on 2.3 GHz. Probably they are on wait and see policy.

Will BSNL get the refund?

Refund of amount paid for BWA spectrum seems a remote possibility as it is credited to the Consolidated Fund of India.

Will BSNL get new spectrum on 2.3GHz or other band?

India is already undergoing spectrum crunch, BWA spectrum was auctioned in only 2 blocks among private players. After the digitalization of Doordarshan, BSNL may get spectrum in 700 MHz band for LTE roll out. It also pushes BSNL for late entry in 4G space as there is no certain date.

If DoT auctions the surrendered spectrum, who will take it?

That’s a big question, which operator will up to for this band of spectrum! This airwave is not fit for LTE rollout and in India no operator will go WiMAX way.

Most important question, is really BSNL returning the spectrum? Because BSNL tells that it will retain spectrum in 4 circles and in other circles it will continue rural connectivity.

In Kerala (BSNL is not retaining BWA spectrum in Kerala), there is a e-Health project run by Regional Institute of Ophthalmology, which is based on BSNL WiMAX connectivity.May be there are similar projects in other states too. What will be the future of these projects?

Whats your take on this move by BSNL? comments are appreciated.

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