Qualcomm is emerging as a front runner in the Indian market. Its first contract with MTNL was worth $890,000 for a 1,000 line system to conduct field trials. Eventually, MTNL's new deployment of 50,000 WLL lines each in Mumbai and Delhi has gone in favor of Qualcomm. Besides, it bagged contracts from Telelink Networks in Rajasthan, and Essar Commvision in Punjab. The contract with Telelink Networks was estimated to be worth $45 million for the supply and implementation of a CDMA-based WLL network in Rajasthan. The recently concluded deal with Essar Commvision is estimated to be valued between$60 million to $70 million. There are also reports that Qualcomm has bought a stake in Essar Commvision.

With CDMA emerging as the accepted technology, US-based telecom equipment vendors like Qualcomm, Motorola, Lucent Technologies, and Nortel are in the forefront. European companies like Alcatel, Siemens and Ericsson, and Korean companies like Samsung and LGI are giving tough competition. Indian players are yet to compete with their multinational counterparts.

Given the positioning of telecom service providers, there are two distinct markets for WLL in India -- DoT and the private operators. Since DoT is expanding at a rate of four to five million lines a year, it will be the major market for WLL. The concern of DoT is to expand the network to remote areas and give telephones on demand. DoT requires micro as well as macro cellular networks to widen its reach in urban and rural areas.

Interestingly, DoT has opted for separate biddings for 16 cities. As with other telecom equipment, this is also likelyto be tender-driven. Pricing and political lobbying play a critical role in the Indian WLL market. Since the rules decree 30 per cent of DoT orders for public sector undertakings, vendors are busy forming alliances with state-owned telecom equipment manufacturers, Hindustan Teleprinters Ltd (HTL) and Indian Telephone Industries (ITI).

Qualcomm has already tied up with ITI for a joint venture to assemble and manufacture its WLL systems in India. Motorola is about to finalise a similar deal with HTL. Other vendors are also trying for the same to capture a fair share of the DoT market.

The main concerns of private operators are to rollout the network quickly, and have maximum coverage at a minimum cost. In this market, the vendors adopt the strategy of offering the best financial package. The determinant factor is vendor financing. In the case of deals hitherto concluded, "cost-effective package" played a key role. As new trends emerge in vendor financing, things are becoming difficult for equipmentmanufacturers.The modalities are changing from giving long-term supplier credit with a moratorium of two-to-three years to buying stake in the project. This is learnt to have happened in the case of Essar-Qualcomm deal. The modus operandi is not restricted to the supply of equipment and arranging of financiers for the deal but also putting the infrastructure in place.Though WLL was initially considered as a temporary solution, it is likely to coexist with wireline method in India. The market exists as long as saturation in telephone penetration is an issue. However, in commercial locations, WLL has to give way for wireline, considering the convergence of technologies.

Vendors as well as operators doubt the capability of WLL system in data transmission. But that won't suffice to cast clouds over the vast WLL market in India.

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