BSNL Plans $750M WiMax Splash

Bharat Sanchar Nigam Ltd. (BSNL) plans to splash out $750 million on WiMax networks to cover one sixth of India's 1 billion-plus population, and has already issued the first tender for WiMax equipment.

The move marks BSNL's first big WiMax deployment -- though not as big as some believe, according to the carrier. While some media reports estimate the equipment contract to be worth $1 billion, BSNL tells Unstrung the planned WiMax expenditure is closer to $750 million.

BSNL will actually issue two WiMax tenders. The first one, issued last week, focuses on covering small towns and rural areas. BSNL says it wants about 1,000 mobile WiMax base stations, based on 802.16e technology, and 100,000 pieces of customer premises equipment. The project will be mostly funded by the government's universal service obligation (USO) fund for broadband access. (See BSNL Wants GEPON, WiMax Gear and Convergence India: In Pictures.)

The second tender will cover certain large cities, "where broadband demand is high," and will be issued in the next two or three months, according to BSNL.

According to the The Economic Times, BSNL plans to cover 25,000 villages, provide broadband access to 40,000 primary and secondary schools, and set up 50,000 WiMax kiosks.

But some reckon the spoils for vendors will be a lot less than $750 million. Protip Ghose, VP of sales and marketing for Indian WiMax vendor Telsima Corp. , believes the tender will be worth $300 million at the most. (See WiMax Startup Telsima Pockets $50M.)

He adds that BSNL is trailing some of its rivals. "There are much bigger WiMax deployments happening in India," says Telsima's Ghose. "By the time BSNL offers the tender and starts its service, other operators will be offering services in just about every city."

Telsima, which supplies WiMax gear to Reliance Communications Ltd. (RCom) and Videsh Sanchar Nigam Ltd. (VSNL) (NYSE: VSL), says it expects a "big bang" for WiMax services in India in the near future. Operators have been quiet about their WiMax plans, because they prefer to build out the network first, then have a "massive country-wide" launch, says Ghose. (See Telsima Boasts WiMax Deals.)

Regardless of the actual value of the contract, BSNL's tender is sure to generate huge interest from vendors including Alcatel-Lucent (NYSE: ALU), Motorola Inc. (NYSE: MOT), Huawei Technologies Co. Ltd. , Nortel Networks Ltd. , Nokia Siemens Networks , Aperto Networks Inc. , Alvarion Ltd. (Nasdaq: ALVR), and Telsima.

The first tender for rural broadband coverage has gotten off to a shaky start, though. It has been postponed for about three weeks, because the government has not yet issued the spectrum or the policy for broadband wireless access. The policy, at least, is expected in the next month.

BSNL says it has been assured of getting at least 20 MHz of spectrum at the 2.5 GHz frequency band and expects the 2.5 GHz licenses to be issued in the next two to three months. (See India on Edge Over 3G.)

BSNL has already dipped its toe in the WiMax water with a small deployment of about 10 Aperto base stations to serve business customers in 10 cities. (See BSNL Deploys Aperto.)

— Michelle Donegan, European Editor, Unstrung