Notwithstanding the existing tough business conditions in India, international players are adopting a very aggressive strategy. The pricing of WLL equipment in India has been among the lowest in Asia-Pacific and most of the competitors offer total solutions, which include subscriber terminals, switching and transmission equipment.

Countries like India, China, Russia, Brazil and Indonesia are expected to account for a very significant share of the worldwide WLL market. According to the International Telecommunications Union (ITU), India will account for 13 per cent of total WLL subscribers by the turn of this century. It totals approximately 3.7 million lines. Though the market potential is high in India, the forecast of the global apex body on telecomappears to be running off track at the moment.

The tardy progress is always part of the Indian market, especially if the public sector is expected to play a significant role. The Department of Telecommunications (DoT), which operates basic telecom services nationwide, is expected to be the biggest buyer of WLL technology.

DoT is currently, undertaking field trials based on CT-2, DECT, IS-136, Cor-Dect and DCS 1800 technologies. It has come out with a tender for equipment to be rolled out in 16 locations. Ericsson, Hughes Network Systems, Nokia, Midas and Dessault are among the several companies who are vying to get a share of this large tender.

Mahanagar Telephone Nigam Ltd (MTNL), the basic service provider in Mumbai and Delhi, has made substantial progress as compared to DoT. After two years of field trials in Mumbai and Delhi, MTNL has decided to provide 50,000 connections through WLL during the first phase of its operations. Qualcomm is providing the code division multiple access (CDMA)-based WLLsystems.The picture in the private sector is different. The first phase of roll-out plans of private operators envisages massive deployment of WLL technology. They don't seem to be in a position to wait for the much-prolonged field trials like their counterparts in the government sector.

Firstly, private operators have to meet the license obligations in terms of direct exchange lines (DELs) and village public telephones (VPTs). A quick rollout is possible only with a WLL-based network. Secondly, in the case of most projects, the foreign joint venture partner has exposure to WLL technology. Above all, the options available are proven technologies in developed countries.

Five out of seven private basic service license holders have already signed contracts for the purchase of equipment. Bharti Telenet, the country's first private basic service operator, concluded a deal with Motorola for a project in Madhya Pradesh. Hughes Network Systems, is one of the partners in Hughes Ispat Ltd, which is to provide basictelecom services in Maharashtra. Hughes, being a the leading WLL equipment manufacturer, is supplying the WLL equipment to this project. Tata Lucent Technologies got the $340-million contract from Tata Teleservices in Andhra Pradesh. Lucent entered into an alliance with Motorola for WLL systems. The deal, worth $15 million, is for the supply of 50,000 fixed wireless terminals.

Other operators, viz., Shyam Telelink in Rajasthan, and Essar Commvision in Punjab were in favor of Qualcomm. Reliance Telecom, which has the license to operate the fixed line services in Gujarat, has shortlisted Siemens, Alcatel, Lucent Technologies, and Ericsson for supply of equipment.

According to the indications, Lucent Technologies is likely to bag the deal. Techno Telecom, the license holder for basic services in Bihar, is yet to get active in the project.

Market estimates

In 1998, the market was estimated at $60 million mostly on the basis of installations done by Bharti Telenet and Hughes Ispat Ltd. DoT hadinitially planned to provide 2.7 million lines using WLL during the period 1997-2000. With barely one year left in forecast period, the actuals still stand at zero.

The aggressive plans of private operators may fill the gap created by temporary lack of demand from DoT. The six private basic service license holders have ambitious plans to provide above 2 million lines in the first phase of network rollout. Almost all the roll-out plans in the initial stage are based on WLL. Most projects envisage the first phase of network rollout in a period of three years.

It is estimated that by the year 2005 close to 20 per cent of new lines installations will be based on WLL. Frost & Sullivan latest report on the Indian WLL market estimates that by the year 2005, the Indian WLL equipment market would be valued at $1.3 billion.

The prices of WLL equipment have been declining very rapidly. Currently, WLL systems cost about $600 per subscriber. One year ago, the figures were close to $800. The prices are expected tocontinue declining throughout the forecast period, 1999 to 2005. Though the current costs of WLL do not provide any effective advantages over wireline, strengths in terms of quick rollout and mobility turn the tables in favor of WLL.

Given the current market trends, WLL is likely to get the cost-effective benefits within a year. With rapid increase in the demand for basic telephone services, WLL has emerged as the Hobsons's choice of operators for quick rollout.

In the Indian context, WLL has some unique advantages from the point of view of private operators. The benefit comes in the form of overcoming the last mile-digging problem. Besides getting approvals from concerned authorities, private operators have to pay a fixed fee of $118 per kilometer to the ministry of surface transport for digging the roads.

To be concluded

Anil Joseph, is an industry analyst with Frost & Sullivan - Telecom Group