Passage to India

The Tata Group is India's largest conglomerate, with 98 businesses in everything from trucks to tea. Last year, its revenues equated to about 3.2 per cent of India's GDP. Now it is throwing its weight behind WiMAX.

Ken Wieland, Contributing Editor

February 12, 2008

8 Min Read
Passage to India
Profile: Tata Communications

The Tata Group is India’s largest conglomerate, with 98 businesses in everything from trucks to tea. Last year, its revenues equated to about 3.2 per cent of India’s GDP. Now it is throwing its weight behind WiMAX.

For better or worse, India is famed for its bureaucracy. For Shankar Prasad, the bureaucracy is “the single biggest bottleneck for broadband in India”.

It has forced him into an unusually frank admission for a salesman. “When a customer calls up more often than not we have to say: ‘sorry, we can’t provide you with broadband’.

The president of the Retail Business Unit of Tata Communications (formerly VSNL), explains.

“To provide broadband connectivity to individuals in India you need to lay copper or fibre and you need a lot of permissions, and lots of licences. A city ‘covered by broadband’ typically means only small areas of that city. The broadband reaches where the money is.”

With the ground often inaccessible, service providers resort to threading wires across the rooftops, where they are exposed to the elements. The result? “The customer experience is pretty bad.”

Little wonder then that Prasad says that of Tata’s three main businesses-international voice, enterprise internet, and retail broadband- the biggest is the enterprise business, the smallest the retail business. Enterprises can better handle both the bureaucracy and the expense.

It’s a pretty convincing case for wireless connectivity in a country of 1.1 billion people, 216 million telephones but only 2.7 million broadband users.

Prasad and Tata “expect WiMAX solutions can address that space.”

The Indian government has set a target of 20 million broadband users in the country by 2010. “We believe there is a far bigger market beyond 2010, but for now our eyes are on that 20 million,” says Prasad.

It has been reported that Tata plans to spend $500m-$600m rolling out WiMAX networks but Prasad won’t comment on his spending plans.

Network profile

Tata’s WiMAX solutions are divided into bespoke enterprise sector solutions and retail business solutions. It does not as yet offer services for the consumer sector.

For enterprise customers it is rolling out WiMAX base stations as per the customer’s coverage requirements, whereas for the retail sector it will offer general wide area coverage.

For the time being Tata’s WiMAX base stations are co-located on masts owned by sister company Tata Teleservices, which operates a CDMA mobile phone network.

Tata is operating 802.16d equipment in 3.3GHz spectrum, India’s unique frequency allocation for fixed WiMAX services. US-Indian vendor Telsima is supplying the equipment, which includes base stations and outdoor CPE.

This follows a four-base-station trial with Telsima late last year when Tata tested WiMAX with 80-100 enterprise customers, offering modest throughput speeds of “between 128 kbps to 512 kbps” from sites that varied in range from about 400 metres radius to about one kilometre radius.

“We mount the CPE outside the building and then run a wire to the computer or to a Wi-Fi router in the building,” Prasad explains. “The direct connection to the computer is more common right now.”

He continues: “Naturally as we progress we are going to use indoor CPE bit for now we are still learning about the network coverage. Once we get comfortable with the coverage we will be testing indoor CPE.”

Coverage is dependent in part on spectrum assets and, once again, India’s bureaucracy is not helping Prasad’s cause.

“We have only 10MHz. That is not enough. Around the world WiMAX operators have 20-40MHz. Around the world the most relevant frequency band is 2.5GHz. We would love to have 2.5GHz spectrum but we are working with 3.3GHz.”

One of the most immediate effects of Indian WiMAX falling in line with global standards would be to reduce the price of Tata’s WiMAX CPEs that currently cost about $250, according to Prasad, well beyond the reach of most consumers and even some SMEs.

“Right now we don’t sell the CPE, we give it to the customer but it belongs to the company. If the customer cancels and moves on we keep the CPE,” he explains.

Soft launch

So far, Tata has launched enterprise services in 10 cities including Bangalore, Chennai, Puni and Hyderabad, for example building out 20-30 sites in Chennai.

Already it counts among its customers some big names, including Hyundai Motors, Bajaj Allianz insurers, Coca Cola and Mahindra resorts. Tata is directly selling into the enterprise, contacting the customer, assessing their needs and crafting a WiMAX solution.

Its first and only foray into the retail sector has seen Tata deploy 120 WiMAX base stations in Bangalore that cover some 85 per cent of the city.

Tata’s service proposition is simple: access. It is not as yet moving into providing any WiMAX service specific value added services, says Prasad. “We are providing last mile connectivity. That is what we are doing with WiMAX. If customers want to use VoIP or other VAS they use internet-based solutions.”

In January Tata soft-launched this network and is currently using several sales channels to approach customers, including a direct sales team and outside channel partners, generally local dealers of computing equipment and office equipment.

What of those long-suffering individual consumers, who Prasad has so often had to disappoint? They will have to wait.

“We are not selling directly to consumers,” he says. “It is not a retail product as if selling a mobile phone in a shop. In the long term, absolutely yes, it will become a retail product.”

Tata’s retail business service plans are, claims Prasad, broadly in line with existing wireline broadband service plans.

“We are offering a minimum of 256kbps. Service plans are for three, six and 12 months and cost on average about 1500 rupees ($38) a month,” he says, adding that Tata is competing against any operator in the broadband space. “Bharti, Sify and Reliance, the incumbent BSNL, we are competing with fixed broadband.”

All the operators Prasad mentions are also moving into WiMAX, so how will Tata differentiate?

Other than claiming a better product, better quality of service and customer service, Prasad also mentions Tata’s content development division within the broadband unit.

“Through our Tata Indicom website we are offering some of the latest blockbusters to be downloaded and viewed, from Yash Raj films, one of the biggest film distribution houses,” he explains.

When a Tata WiMAX user logs onto the internet they are immediately directed to the Indicom website where they can access the content exclusive to Tata customers. In the soft launch phase there are no services or applications exclusive to users of the WiMAX service.

“Whatever broadband products we are offering are the same products customers can get through WiMAX,” confirms Prasad.

Mobile WiMAX can wait

There have been press reports that Tata has put out large-scale RFIs for 802.16e equipment, but Prasad plays down the prospect of mobile WiMAX, citing uncertainty surrounding spectrum and the case for WiMAX mobility.

“When we get clarity on spectrum we will be interested in 802.16e but that would be for portability. We are still awaiting regulation on mobility. I don’t think WiMAX is going to compete with mobile services, I don’t think people are looking for broadband on their mobile phones.”

He continues: “Today we are struggling to provide fixed broadband and so we need to concentrate on fixed broadband before thinking about mobility.”

That struggle continues as Tata feels its way into the WiMAX world, and Prasad suggests that the biggest challenge his company has faced has been the sheer novelty of the technology.

“It is like going back to rolling out mobile networks,” he says. “So many people are learning on the job as we roll out and learn what does and doesn’t work. For example, we are not able to predict exactly the coverage for each WiMAX base station, each time we are learning only after trial and error.”

Nevertheless, Prasad declares himself happy with what he has seen so far, he has some major enterprise customers already and, in the coming months, as regulatory bottlenecks are hopefully cleared, he might even have cause to give thanks to India’s famed bureaucracy.

India’s struggle for spectrum

Recent reports suggest that Prasad’s wishes may be granted. In mid-January the Department of Telecom (DoT) requested that the Department of Space and telecom operators vacate the 2.5GHz spectrum they occupy to make way for wireless broadband services.

About 40Mhz in the 2.5GHz band is used by the space agencies and another 40MHz is used by telecom operators for back-end microwave links.

The Hindu Business Line reported that the DoT had set a deadline of February 28 to the incumbents to relocate to other specified frequencies.

“The wireless users/operators who have assignments in the frequency band 2.5GHz as well as 3.3GHz are required to shift their operations from 2.5GHz band and consolidate in 3.3-3.4GHz band immediately. Further, the operators who have assignments only in 2.5GHz band are required to relocate their operations from 2.5GHz band to 2.7-2.9GHz band,” the order said.

The Department of Telecoms is reportedly proposing to auction three licenses and 60MHz of spectrum at 2.5GHz to existing operators, with plans to reserve one wireless-broadband license for state-owned BSNL and MTNL to share.

However, the Department of Space has raised concerns about this reallocation and has been holding up the process for some time. Furthermore, there is a campaign by India’s GSM operators to allocate 2.5GHz spectrum to them.

“It is a huge problem because a lot of operators want spectrum for mobile telephony as well as wireless broadband. That is pending with the government. When we get clarity on that we can take decisions going forward,” says Prasad.

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