BSNL to cover more than 200 million people with Mobile WiMAX

BSNL to cover more than 200 million people with Mobile WiMAX

SOMA Networks announced yesterday that it has been selected by BSNL, India's state-owned telecommunications company, to deploy a Mobile WiMAX network spanning three of India's telecom circles. Based on an infrastructure to be supplied by SOMA Networks, over the next three years the network will provide broadband data and voice services to a service area reaching over 200 million people. For BSNL, this project represents a key milestone to realizing the Indian government's “Vision 2010” plan which aims to reduce the digital divide in India.

Comment: This announcement is probably the second most significant one for the Mobile WiMAX camp, after Sprint-Nextel's project, as the Indian market is often rightly referred to as the most significant business opportunity for WiMAX. In the same vein as mobile WiMAX deployments announced in neighbouring Pakistan, this project confirms our view that the potential for WiMAX is mainly in emerging countries where wired infrastructure is poor or even non-existent, and where fixed broadband penetration is consequently very low. In such markets, wireless solutions represent the only economic alternative to deliver broadband services to the mass-market. This explains why we forecast that 46% of WiMAX users in 2011 will be located in Asia-Pacific region. Deployments of mobile WiMAX services in mature markets where competition from both mobile broadband (EV-DO/HSPA) and fixed broadband (DSL/Cable and in a lesser extent fibre) is much more challenging.

Of course, it's also a huge achievement for SOMA Networks who, until now, was familiar only to specialists. Using the 2.5GHz band, the US-headquartered vendor will deploy its 16e Wave2 compliant FlexMAX solution to cover the circles of Gujarat, Maharashtra and Goa, and Andhra Pradesh over the next three years, which represents more than 200 million people. In comparison, Sprint-Nextel selected big vendors with end-to-end in-house capability (Motorola, Samsung and NSN) for its project, which initially aimed to cover 100 million people by the end of 2008. For BSNL, it could be quite risky to rely on a single supplier, especially a small one.

In order to cover approximately 400 cities, SOMA Networks will have to manufacture, deploy and install thousands of base stations. Being a small vendor, SOMA Networks will need to significantly ramp up its capabilities, both in terms of manufacturing and professional services, in a relatively short period of time. In addition, the size of the deal also implies challenges to SOMA's Taiwanese ODM partners for CPEs, especially when considering that price points in India have to be as low as possible. However, given the size of the deal, it's clearly a significant opportunity for SOMA Networks to boost its reputation, develop its scale and leverage on it to address other opportunities in countries where positioning mobile WiMAX as a wireless DSL technology makes a lot of sense.