Things are finally looking bright on the 3G front, with one of the private operators already rolling out services in the country and others having placed orders for equipment would begin their commercial launch in a couple of months. So by February 2011, we would have at least four operators providing 3G services. However, the news is not so pleasant with regard to the other service?broadband wireless access (BWA)?for which spectrum was auctioned earlier this year. Sounds a little funny, considering that while the successful bidders were given spectrum for BWA much ahead of 3G, one would have assumed that services would have followed in that order. But till date there?s no encouraging news from any of the successful bidders on the BWA front. Amidst this background came the news, broken by this newspaper, that one of the successful winners of the BWA spectrum, the San Diego-based Qualcomm, plans to sell out the business and concentrate on its core competency of being a technology provider. What exactly is the dilemma of the operators on the BWA front which is delaying the roll out of services and is Qualcomm?s exit fair?

The reason why all the operators are still undecided on the BWA front is because none have chosen the technology on which the services would run. By early this year and before that till the long run up to the auctions, it was held that WiMAX was the technology for BWA, so much so that the two were used interchangeably. However, it was the arrival of Qualcomm almost on the eve of the auctions that changed everything. The company decided to bid for the BWA spectrum like any other operator, it also said that it would use a different technology called LTE-TDD for BWA claiming that it was the technology of the future. Qualcomm?s strategy was quite opposite to Intel?s, which propounds the WiMAX technology but never bid as an operator. Qualcomm bid and won spectrum in four circles, which it now wants to sell, albeit with a rider that the buyer uses the LTE-TDD technology.

Qualcomm?s entry into the race and now its plan to exit has obviously been criticised by the proponents of WiMAX. However, to be fair, Qualcomm is not the first one to sell-off. Just hours after the BWA auctions had ended, one of the bidders, Infotel Broadband, which was the only company to have won spectrum in all the 22 circles, sold off 95% stake to Reliance Industries Ltd. One did not hear any criticism from any quarter then! The WiMAX lobby feels that Qualcomm has basically derailed the government?s broadband agenda since their technology is not tried and tested and is still evolving. In contrast, WiMAX is ready for commercial deployment, and had Qualcomm not made an entry, the operators would have chosen WiMAX and moved on. Since the country has around 700 million mobile subscribers and only 9 million broadband users, the latter should be a bigger priority for the government. Right, but the government never put any lock-in period on the winners of spectrum so why blame anybody else?

The main reason for the indecisiveness of the operators on the technology front is because the long-term growth potential isn?t clear in either. It is this very spectrum that would make the operators migrate to a higher standard called 4G when the equipment supporting it is widely available. The problem currently with WiMAX is that its devices come in the technical standards of 16D and 16E where migration to 4G is not possible. However, the same is possible on its technical standard of 16M, where customer devices are not fully developed. The LTE-TDD technology, where migration is possible, is also under development. However, assuming that WiMAX 16M and LTE-TDD get developed simultaneously, the latter?s handicap could be that being a proprietary technology it might work out to be more expensive from open standard technology like WiMAX. One of the reasons why the CDMA mobile operators like RComm and Tata Teleservices also moved on to GSM was that the former was a proprietary technology provided by Qualcomm.

Critics also maintain that Qualcomm?s condition of binding the buyer to its technology may work against it. Not really. If the technology finally gets preferred by the buyer, no such obstacle would come. Even if one assumes such problems creep in, it can always be dealt with in terms of lowering the sale price or becoming a managed service partner of the buyer so that the network roll out becomes cheaper.

Since delays in India are common, whichever of the two finally provides better leapfrogging to the operators would win.

rishi.raj@expressindia.com