High Reserve Price for WiMax Auction upsets ISPs Again while India’s Internet Usage sees a Steady Rise
The country’s Department of Telecom (DoT) have come up with some new set of guidelines for auctioning off the spectrum for WiMax in the country, something which has greatly upset the Internet Service Providers (ISPs) in the country. As per the new guidelines laid down by DoT, the reserve price for the auction has been raised from the earlier Rs. 550 crore to a whopping Rs. 1010 crore.
This, according to ET, has ‘deeply distressed’ the ISPs who are looking forward to the implementation of the WiMax services in the country. The country holds a great deal of scope for internet usage which has been increasing over the years. More and more people are getting access to the internet and the reach of the new-age media is definitely maximizing its outreach. According to a recent report released by Akamai Technologies, one of the largest enterprise application providers, among the total traffic monitored by them, India ranked 14th in terms of unique IPs, accounting over 2.1 million unique IPs from the country. This is a growth of over 4.5 percent over the previous years, reports ChannelTimes.
Implementation of WiMax technologies across the country will make it even easier for consumers to get access to the internet. However, with the DoT constantly increasing the reserve prices of the auction, that doesn’t seem to be a possibility in the coming days. Mr. Jasjit Sawhney, CEO of Net4, who spoke to the paper, said:
The initial reserve pricing of Rs 550 crore was itself so high, now the revised pricing will hurt a lot more. The ISPs do not have the capacity to pay such a huge amount,
The ISPs are now trying to demand a separate auction for WiMax and will soon draft a letter to the country’s communications minister Mr. A Raja. Presently, the DoT cannot carry out the auction unless these ISPs vacate the 2.5Ghz spectrum that has been allotted to them since 2003. The ISPs had already threatened to move TDSAT if the government tried to take back the spectrum, but now seem to have softened their stance.
The ISPs maintain that the auctioning of the WiMax spectrum should be completely separated from the overall process of auctioning the 3G spectrum and that blocks should be reserved by the DoT for exclusive bidding by the ISPs.
The country is all set to undergo a complete revolution w.r.t to the telecommunications industry with the auctioning of the 3G spectrum auction for GSM, CDMA and even WiMax services set to happen in the coming weeks. There has been a lot of activity in this space in the days approaching the auction and it can only be left upon time to tell us what the future holds.
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Hongkong 2.5/ 2.3 Auctions -a wake up call for WiMAX auctions in India
WiMAX despite over 400 networks successfully rolled out is presently being buffeted by strong winds of a pessimism. Sample this- in the 2.5 GHz and 2.3 GHz auctions which were held in Hongkong in Jan 2009 by the OFTA the only bids which came in were for the 2.5 Ghz-2.6 GHz band. There were no bidders for the 2.3 GHz band which is a prime band for mobile WiMAX with WiMAX forum certified products being available. Not only that, the only successful bids in the 2.5-2.6 GHz band the bidders were mobile companies ( China Mobile HK, CSL and Genius Brand) and have not hidden their intention to use the potential spectrum for LTE. This is despite the fact that LTE, a technology evolution path of 3GPP is still at least 2-3 years away.
As India enters the auctions of 3G and WiMAX portions of spectrum later in march / April 2009, the results of auctions should be a wake up call. We have been pointing out repeatedly that while the air interfaces can be used for WiMAX, the companies are planning to use the LTE based technologies.
With the Indian govt and regulators having adopting an Ostrich like attitude believing that the WiMAX spectrum in the 2.3 and 2.5 Ghz bands would be used for growth of broadband wireless in the country, the reality will bite when the auctions are over with a probable repeat of the Hongkong results. The reserve prices of WiMAX spectrum fixed at 50% of 3G prices ( at appox $800 million for 3G and $400 million for WiMAX) making it well out of reach of broadband wireless operators. The only users which could possibly use this new spectrum in the 2.5 GHz bands are likely to be those using 3G-LTE technology. This is owing to the sever spectrum crunch for 2G services and the need to deploy additional spectrum for voice services by a multiplicity of players which makes any possible additional capacity attractive.
hence the policy makers should be under no illusion that just because they are auctioning certain spectrum as WiMAX, it will be used for anything other than LTE. But perhaps they are indeed aware of it. After all the 2.5 GHz band has been vacated by throwing to the wolves the existing WiMAX operators operating in this very band.
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