Intel eyes 4G entry in India

Intel, the world's largest chipmaker, is understood to be in talks with leading Indian telecom companies like Tata Communications (formerly VSNL), Bharti Airtel and Reliance Communications that could bid for broadband wireless access spectrum to be auctioned by the government in January 2010.

Talks are currently centred on Intel offering Worldwide Interoperability for Microwave Access or WiMAX (which provides for wireless transmission of data and up to 75 Mb/sec speed) technology -- one of the popular BWA technologies -- to the operator, and the possibility of taking a minority stake through its venture capital arm, Intel Capital.

A global debate is still on, but most experts consider technologies like WiMAX close to fourth generation (4G) services, offering better speeds than 3G on GSM networks. It is constrained by the fact that it does not provide enough mobility currently and experiments are on in some countries to offer full mobile voice and data service on such networks.

Unlike in countries like Sweden and Bangladesh where Intel has bid for spectrum directly to run WiMAX services (with other partners), the model in India will involve partnerships with current telecom players. Intel has, however, made it clear it isn't interested in becoming a service provider to push WiMAX.

A source close to the development says Intel plans to float a new company for its WiMAX foray in the country.  "Spectrum farming is not Intel's idea. Rather, it's spectrum partnership," adds the source. 

Asked about the talks, an Intel India spokesperson declined to comment, as did Bharti Airtel, RComm and Tata Communications.

Intel also plans to follow a consortium approach in India to roll out WiMAX-based broadband services in India, similar to its approach to the US and other markets, including Japan, where it has partnered with the likes of Google and Sprint.

The Department of Telecommunications recently released the information memorandum to auction spectrum for third generation (3G) and BWA services. Under the memorandum, DoT plans to auction two blocks of BWA spectrum at a base price of Rs 1,750 crore for a pan-India licence. The spectrum, which is the radio frequencies that enable mobile communications, will be given in the 2.3 GHz band. Once the defence services vacate more spectrum in the 2.5 GHz band, this will be open for BWA aspirants.

Currently, the country has just around 6.5 million broadband subscribers, much below the estimated 20 million projected by the government by 2010. About 80 per cent of broadband is offered through digital subscriber line technology, another 8 per cent through cable and only 1 per cent through wireless.

The government hopes that by auctioning BWA spectrum, broadband through wireless technology would spur growth.

However, many mobile operators say that GSM 3G services will provide high-speed Internet data to the masses and is far superior to WiMAX, which is still not "established" and its equipment is very expensive.  

Last December, state-owned Bharat Sanchar Nigam Limited, had invited bids from potential franchisees to provide mobile WiMAX to its customers in 16 circles last December.

Around 28 companies, including majors like Intel Technology India, Alacatel-Lucent India, Motorola India, Moser Baer Industrial Infrastructure, Huawei, HCL Infosystems, Larsen & Toubro Infotech and TCIL, figured among those who bought the tender documents.