Is WiMAX in India ready to take off or be Dead on Arrival?

India’s 3G and WiMAX spectrum auctions are planned to commence this year paving the way for Mobile Internet and Fixed Broadband Wireless Access.


India’s IT/ Telecommunications Minister, Andimuthu Raja, has stated that the government will start the auction of licenses for high-speed wireless services within the next three months.   Many feared that the long delayed auctions might not start until sometime in 2010, so this could be good news.   In November 2008, India’s Telecommunications ministry picked NM Rothschild & Sons Ltd.  as the independent auctioneer to help it sell the permits and aimed to complete the process by early 2009, but that never happened.

The auction to operate 3G mobile-phone services and fixed wireless broadband (WiMAX) services will earn India about 250 billion rupees (US$5.1B), Raja said.   The starting price for each slot of 3G spectrum is 35 billion Indian Rupees (US$716M), lower than the (US$827M) price previously signaled by the government but higher than the original (US$413M) price suggested.   "Since the number of slots are only four, the auction price will be more," Raja said.  

Three available blocks of spectrum in the 2.3 and 2.5GHz band will be auctioned separately for fixed broadband wireless access services.   The so called "WiMAX auction" will be held after the 3G auctions are completed and are expected to follow a similar process.   The government ministers also set a base price of 17.5 billion rupees for permits to operate fixed broadband wireless (WiMAX) services.

As noted above, the 3G and WiMAX spectrum auctions had been scheduled to take place in January this year, but were subject to repeated delays that have allowed government controlled operators BSNL and MTNL to deploy 3G services ahead of privately owned rival carriers.   Those operators had already received licenses for one of the five blocks of spectrum to be allocated for wireless broadband (more in the next section of this article).

It was hoped that early auctions of 3G and WiMAX licenses would result in a growing market for mobile Internet in India, which has much potential and promise.   India is now the second largest wireless market in the world, but almost all of it comes from cellular voice and SMS (rather than from wireless Internet access).   India’s cellular operators added 11.59 million subscribers in May, taking the country’s total to 415.25 million, according to the latest figures from Telecom Regulatory Authority of India (TRAI).

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