Get ready for surge in internet user base: Wireless Broadband

Indian has currently 9 million broadband subscribers. Currently only 8 people in 1,000 have broadband access in India. Pathetically low penetration. Will wireless broadband change this? I think it will.

The Indian government has mopped Rs 38,543.31 crore ($8.25 billion) from Broadband Wireless Access (BWA).

The two circles of Delhi and Mumbai together accounted for 35.29% of the total money raised, while the top five circles – Delhi, Mumbai, Karnataka, Tamil Nadu and Andhra Pradesh account for 71.65% of the bids.

Mukesh Ambani’s Reliance Industries (RIL) has promised to “user a wireless broadband revolution and also is confident of rolling out 4G in India! RIL has acquired 95% in Infotel Broadband for $1b , which is the only company which won the pan India license for BWA (results operator/circle wise). It should be noted that Reliance Communications (owned by younger brother Anil Ambani) did not participate in BWA auction.

The two technologies available for the launch of broadband wireless are WiMax (worldwide interoperability of microwave access) and TD-LTE (time division-long term evolution). TD-LTE is supposed to be preferred to WiMax but can be rolled out commercially only in 2013-14. Govt owned BSNL/MTNL is taking the WiMax route, other players are expected to take the TD-LTE route.

The auction price has been very high, ultimately the users will have to pay more for using the wireless broadband service. For a pan India operator to make the business viable they will need 55-65 million subscribers. The monthly cost of this service is expected to be in the range of Rs 500-700 (upto 10 MBPS)

One of the main reasons for broadband not growing in India is the complexity in last mile connectivity. Telcos find it very expensive to draw the cable to each house/office (lot of digging, approvals from govt are needed). Wireless broadband should solve the last mile problem.

It will take a good 1-2 years to see BWA being fully operational (2011 or 2012). The internet user base in India will finally take off, especially in Tier-2 and Tier-3 cities. Infact many parts of Bangalore (so called the silicon city of India) doesn’t have wired broadband services from BSNL/Airtel. Even Tier-1 cities will benefit from BWA.

Internet economy will finally take off in India. Three cheers to Wireless Broadband, we eagerly and patiently await its launch.