India's 3G Auctions Finally Begin; BWA for TD-LTE or WiMAX?

After many months of delay, India's 3G spectrum auction began today (April 9th) with major telecom operators, including Bharti, Vodafone, RCom and Tata competing to acquire the radio waves that could fetch the government up to Rs 35,000 crore.

[Definition:  A crore (often abbreviated cr) is a unit in the Indian numbering system equal to ten million (10,000,000; 107). Large money amounts in India are often written in the form "Rs 23 cr", that is, 23,00,00,000 rupees (230,000,000 in Western notation).]
 
Nine mobile operators are bidding for the 3G spectrum. For offering 3G services, the government is auctioning three slots in 17 telecom service areas and four in the remaining five areas.  Incredibly, there is no time limit or deadline for the closing of the auction.

The Indian government has set base prices for all the 22 zones at Rs 3,500 crore and Rs 1,750 crore for BWA. Romal Shetty, head of telecom at KPMG India, said "the 3G bidding will be intense because of fewer slots and probably it will be 1.5 to 1.8 times the reserve price."  The auction is happening in a virtual world and is a software-based auction. A small team from the auctioneers and the Department of Telecommunications (DoT) will monitor the auction in a room in DoT.

The auction for the BWA spectrum would be conducted two days after close of the 3G auction. The winners will be awarded spectrum in September, which means commercial operations of 3G services should be possible only by the end of 2010 or early 2011.  Together, the 3G and BWA licensed spectrum auctions could be one of the world's biggest over the past few years.  The government hopes to raise a combined $9 billion from the 3G and BWA auctions

For more information, see:  FACTBOX-Quick facts about India's 3G, BWA auctions

For many years, this author has stated that India holds the key to the future of WiMAX as a mass market (vs a niche network technology).  India is the world's fastest growing mobile market (but so far that is just for mobile phones). 

The Indian government has slotted the sale of two 2.3 GHz blocks of spectrum on April 11, providing 20 MHz spectrum in each of the country's 22 telecom circles. The base price for this BWA auction has been set at $386 million.  There are 11 annoounced bidders for the BWA auction.

We are eagerly awaiting the results of that BWA auction, as one of the bidders, notably Qualcomm (with verbal support from Ericcson), have indicated they would opt for TD-LTE for deployment in the BWA band.  Previously, India market watchers believed that WiMAX was synonymous with BWA in India and  the 2.3GHz spectrum winners would deploy WiMAX – as state-owned telcos BSNL and MTNL are already doing in the band. This was because WiMAX had equipment and devices available at once, and Indian operators and research institutes have carried out years of testing and development.  But that assumption may not be valid anymore.

TD-LTE, or TDD-LTE (Time Division Duplexing- Long Term Evolution), is said to offer peak download speeds of 100 Mbps on mobile devices. LTE has been chosen over mobile WiMAX by the world's tier one mobile operators.  But the LTE version favored by those operators  uses Frequency Division Duplexing.  To date, only China has committed to TD- LTE.  If Qualcomm wins its bid in the BWA auction, India could become the second country (after China) to roll out TD-LTE. 
Sources have indicated that Qualcomm would bid aggressively to obtain one of the two BWA frequency slots up for sale.  However, Qualcomm will need an Indian partner for its TD-LTE foray in the country since foreign direct investment is limited to 74%.  Qualcomm has stated that it would enter into a joint venture with an Indian partner to launch its services and later exit from the joint venture after the network becomes operable. But the Indian partner(s) have not been confirmed at this time.  The frontrunner, according to local newspaper The Economic Times, is GTL Infrastructure.

At a recent presentation, Kanwalinder Singh, president of Qualcomm India, said that 59 networks across 28 countries have committed to LTE. The Indian market, with its vast population and low penetration, could well drive economies of scale.

Ericsson is making a case for TD-LTE being more practical for the 2.3GHz band than WiMAX, despite the latter's headstart in terms of commercial availability. The Swedish telecom equipment maker says WiMAX works best with more spectrum than India is making available – though in many deployments, operators are running profitable WiMAX systems with 20MHz or even less. "It is commonly known in the industry that WiMAX requires minimum 30MHz of spectrum, whereas India is offering only 20MHz and this may result in severe interference problems," said CTO Haken Eriksson said.

Sandeep Ladda, executive director, PricewaterhouseCoopers (PWC), said: "Though the Indian market is huge, it won't be smooth sailing post auction. We are adding 1 crore customers a month and in January, we added 1.9 crore customers, but the implementation of the new technology has its own cost. And India is a very cost conscious market."

For more information. see:   

After 3G, TD-LTE may drive telecom

Ericsson weighs in to bring TD-LTE to India

LTE/WiMAX Propaganda Battle Continues Ahead of Upcoming Auctions in India

0 thoughts on “India's 3G Auctions Finally Begin; BWA for TD-LTE or WiMAX?

  1. There should not be any comparision between WiMAX & LTE as both the technology was designed for different application,infact government should have differentiated in the spectrum auction about the technology for BWA ,this happened with CDMA if we go in the past CDMA was much more better technology then GSM but now CDMA footprint is less then GSM because GSM came in first and there echo system developed earlier then CDMA hence CDMA could not do much even after having more advantage then GSM.
    WIMAX ecosystem is already in place & LTE needs more time.
    LTE will support voice as well as data but if VOIP is open by all the telcos…then GSM will dissapear and WiMAX users can make VOIP calls with much lower cost as there is no backward intigration in WIMAX hence cost will also reduce to make the network
    So the company called something qual   commmmmm has no more work left to be done for CDMA so they are trying to finger with the auction of  BWA spectrum in India..so fingering is no good which we can see after the results of the auction..
    WiMAX is the only technology that will connect this country …I will just give this small example… A profesor of IIT can teach students in IIT campus and with WiMAX this profesor will teach students in my remote village in UP so just imagine the power of Internet ..belive me Internet will make India the Super power on this planet so any one who uses whatever technology to make Internet availlable very very cheap will help this nation to increase the GDP growth .
    Panditji

  2. Hi Panditji
    Thanks for your comment and I hope WiMAX in India succeeds.  I claim to have written more about that subject over the years than any other author.
    But one India based author I respect a lot wrote:
    You are privilaged in watching the LTE Auctions!
    http://wimax360.com/profiles/blogs/clearwire-goes-to-the-3gpp
    Of course, I've already addressed Clearwire/Sprint 3GPP contribution at viodi.com and don't think that has anything to do with the BWA auctions in India.  Having spent many $ Billions, I am wondering what Intel will do to progress WiMAX in India with the TD-LTE threat from arch rival Qualcomm.

  3. Hi Alan,
    Thankyou for your well wishes about sucess of WiMAX in India.
    this link was good to read..well whatever may be the technology it should be viable to implement ,cost should be less for the operator so finally the cost would be less for the user,so I support the technology which is cheap,buy any ASN gateways any WiMAX 16e Base stations,any Home agent and intigrate them together and ready to go
    so In India it would be very interesting  to see which operator  wins BWA spectrun and deploys which technology
    Intel strategy is also good for selling the low cost laptops embeded with WiMAX chipset.
    what qualcomm is trying to do is not clear to me ??
     

  4. I think QUALCOMM and Ericson are making a lot of noise to accelerate the market of TD-LTE in Indian BWA scenario. I have high regards to their outlook and also respect their companies view and strategy; however I also have some facts to report which might give you data points to form a practical opinion.
     
    Fortunately, I meet executives of Qualcomm, Ericson and Nokia as the spectrum auction in approaching; I have asked them some tough questions about their intentions for pushing TD-LTE and maturity of TDD-LTE for a commercial deployment in a very price sensitive market.
     
    Data Point 1 : China Mobile is shifting from their current plans of 2.3 GHz to 2.5 GHz as 2.3 GHz is extensively used by military of China and hence suppliers claim that CMCC will provide enough ecosystem development opportunity for India to achieve economics of scale is not very rosy. This is a fresh development and will have impact on TD-LTE products in 2.3 GHz frequency. Immediately, CMCC, Clearwire and other TDD proponent submitted new work item in 3GPP group to prioritize the development of TD-LTE in 2.5 GHz.
     
    Data Point 2: India is a price sensitive market and current prices of LTE TDD devices are way too high for a meaning full deployment. I am told that the price of devices in Teliasonera Network is in the range of US$ 150 which is too far above the ground as compared to current prices of WIMAX dongles. Current prices of WiMAX dongles are in the range of sub US$ 30 . The curve of device prices to reach sub US$ 30 would be essentially be same as we witnessed in WiMAX, and it may take up-to 12-24 months to reach those levels. Situation is further worsened by limited operators planning to deploy LTE TD in 2.3 GHz.
     
    Data Point 3 : Ericson and Nokia believes that TD-LTE is ready , but Huawei and ZTE has very different view and as per them it will take at least two more years for TD-LTE to reach current levels of WiMAX as CMCC is still deploying their TD-SCDMA networks and they will actually wait sometime until capex incurred in up gradation from TD-SCDMA is recovered. CMCC will continue showcasing TD-LTE trials and other competitive advantages as they are also interested in controlling TD-LTE IPRs.
     
    Believe it or not, the price which Indian operators will pay for acquiring BWA spectrum would be in the range of US$ 500M to 1 B. The chance of operators waiting for TDD-LTE to get matured for deployment is not a practical case. Operators will instead develop a strategy of smooth migration towards their next evolution with approach to acquire customer today and remain profitable in coming year. As I also reported earlier that number of broadband connections in India is less than 2% of total voice subscriptions. The market has potential and what 2G has done in voice; 4G will repeat the story in Data.
     
    WiMAX migration towards LTE Rel 8 is possible with major suppliers like Huawei , ZTE , Motorola and Samsung committing a path towards TDD LTE in case market dynamics favors TD-LTE. Radio is LTE capable and with replacement of baseband units, same hardware can be migrated to LTE Rel 8.

  5. Panditji,
     
    Do you have any idea what are u talking about? Whole world is moving or moved to 2G to 3g which is based on CDMA (for your information QCOM patented).
    As far as TD-LTE gives operator option of integrating existing 3G network to 4G (TD -LTE) network due to backward comptaiblity which is not there in WIMAX.
    And as far as intel and Qualcomm has concern, they both have vested intrest in what they do. Qualcomm wants to sell his chipset and Intel his.
    And believe me if qualcomm decides it wants spectrum, no one can stop them with their cash reserve

  6. Hi Alan,
    I understand what your are trying to say ,whole world has definately moved from 2G to 3 G ,but I have not understood that it has something to do with CDMA ,as far as I understand EVDO is CDMA technology which is at par with 3G and 3 G is supported by the huge loby of GSM so how 3 G is linked with Qulacomm is not clear to me .
    yes you are right that TD-LTE gives operator option of intigrating existing 3 G network into 4 G ,but the auction of spectrum in India is sepearted by 1) 3 G auction 2) BWA auction so a operator who wins 3 G spectrum will not able to go with LTE as he should have BWA spectrum so operator need to buy spectrum of BWA as well as 3 G and what qualcomm is trying to do in India is to buy the spectrum of BWA and wait till the LTE is ready for comercial rollout so that they somehow hold the deployment of WiMAX
    lets see what is in store for Qualcomm in India

  7. Panditji
    Please note that the last comment you responded to was not posted by me.  It was posted by "Nil" whose name appears at the top of the comment box.
    I am not familiar enogh with TDD LTE to make any comments regarding its merits, but for sure it would take longer to deploy than mobile WiMAX which has been already successfuly built out in several countries.
     

  8. India 3G Price Hits $976 million

    The Indian government is auctioning three slots of bandwidth to offer 3G services in each of 17 telecom service areas and four each in the remaining five areas. The successful bidders will be allowed to offer 3G services on a commercial basis from Sept. 1.
    Nine local mobile phone operators, including top players Bharti Airtel Ltd., Reliance Communications Ltd.,
    Vodafone Essar Ltd. and Idea Cellular Ltd., along with smaller rivals Tata Teleservices Ltd. and Aircel Ltd., are bidding for 3G bandwidth.
    http://online.wsj.com/article/SB10001424052702303828304575181070807743774.html?mod=WSJ_latestheadlines

    1. 4G LTE is reduce the Manpower in india Like BTS O&M and the RF Drive test and all.What are openings come in 4G LTE tech.

  9. Indian hopes high for 3G auction
    "3G will segment the market, giving carriers a customer who is willing to pay for access and richer content and applications," said Neeraj Roy, chief executive officer of Hungama Mobile, a mobile entertainment company that claims to be behind 70 per cent of the Bollywood content distributed on cellular phones.
    India is the fastest growing large market in the world for mobile phones, adding almost 20m subscribers a month and with total user numbers approaching 600m.
    Yet in spite of its progress on this front, the country remains a laggard in terms of internet penetration, with the most optimistic estimates suggesting it has about 70m users.
    The launch of the longdelayed 3G auctions on Friday, which are expected to run throughout this week, has therefore been greeted as the beginning of the true internet age in the country.
    Nine bidders are competing for slots in the country's 22 telecom circles, with three pan-India allocations available.  Once the 3G auctions finish, the government will auction two pan-India allocations for broadband wireless access spectrum.  The auction has attracted industry leaders Bharti Airtel, Reliance Communications, Vodafone Essar and others.
    Analysts estimate operators might pay up to $3bn for national 3G and BWA spectrum combined. This compares with a reserve price of Rs35bn ($787m) for 3G and Rs17.5bn for BWA national spectrum.
    http://www.ft.com/cms/s/0/bc8c4f72-4696-11df-9713-00144feab49a.html
     

  10. A wild guess —
    TCL-6 Circles BWA Spectrum
    Tikona Digital -2 Circles BWA Spectrum
    Qualcomm GTL-5 Circles BWA spectrum
    Reliance WiMAX -4 Circles BWA spectrum
    Vodafone-6 Circles 3 G spectrum
    Idea-2 Circles BWA Spectrum
    Idea-5 Circles 3 G spectrum
    TTSL -5 Circles 3 G spectrum
    Bharti Airtel- 8 circles 3 G
    Bharti Airtel -5 Circles BWA
     

  11. Pyramid Research: 3G Auctions in India- Nationwide Coverage Could Cost $2bn or More
    Nine companies have stepped forward expressing interest in bidding for the spectrum. Nationwide 3G coverage could cost operators as much as US$2.3 billion based on our rough estimates for 3G pricing in India, notes Elizabeth Bramson-Boudreau, Analyst at Large for Pyramid Research. "Given the list of bidders, it is certain there will be several disappointed companies when the auction ends," says Bramson-Boudreau. "Although it is possible that one of the second-tier competitors will move aggressively to secure its market position with 3G, Pyramid Research believes that the winners will be among the top tier and that the current list of interested bidders includes no newcomers to the Indian market."
    Pyramid Research expects winning operators to make use of 3G to improve network efficiencies and to secure their position in urban centers and with the rising middle class. "Those who lose or opt not to participate will likely focus on 2G and 2.5G expansion on rural areas; India's highly stratified class structure and the sharp differences in connectivity needs in urban vs. rural areas mean that significant opportunity exists for 3G winners and losers alike," adds Bramson-Boudreau.

  12. I do not think that the  LTE Vs. the WiMAX debate will subside soon.
    The question is what the Governement intended when it started with the Broadband Wireless Auctions ( BWA) and how it intends that this spectrum be used. The associated question is whether the governemnt will monitor the spectrum use and rollout.
    I believe as the Auctions for BWA procced through different rounds, the auction prices for different areas will present a revealing picture.
    LTE companies are likely to place a much higher premium on "cities" and urbanized states such as NCR Delhi, Gujrat and Maharashtra.
    BWA providers using WiMAX are likely to be show lower level of "singularities".
    Very soon the question will come about the 700 MHz auctions. The question is whether the Govt will frame any guidelines for its use either.
    http://tv2mtv.com

  13. Intel Plans to Partner With India Spectrum Winners
    The comments came during a Business Line interview with Sriram Viswanathan, Vice-President, Intel Architecture Group, and General Manager, WiMAX Program Office.  The BWA auctions are expected to begin 2 days after the conclusion of the 3G auctions which are currently underway and expected to be completed in the coming weeks.

    "Intel Capital has taken the initiative to drive broadband adoption all over the world, and is prepared to do it even in India," said Viswanathan.  "We have had discussions with the various players, and are prepared to work with them in a number of ways including enabling specific devices for their networks or creating innovative distribution models."

    Viswanathan stoped short of any direct equity investment saying that the company only considers investments as long as it "meets Intel's strategic and financial targets."

    The Intel executive also downplayed the debate around the recent popularity of TD-LTE (time division LTE) and instead emphasized the availability of WiMAX equipment today.  U.S.  chipmaker Qualcomm has partnered with local Indian service provider GTL Infrastructure and plans to participate in the upcoming BWA auction.  If successful, the joint venture plans to deploy a TD-LTE network using the 2.3GHz spectrum.  Some critics have argued that TD-LTE (different than the more popular FD-LTE) is still several years away from commercial deployments and therefore could result in delays in deploying broadband services.

    "If LTE enables fast deployment of broadband services in the country then that is great," said Viswanathan.  "We are technology-agnostic in that sense and we will also invest in LTE if it develops over the next 2-3 years.  However, at this point in time our bet is on WiMAX since it is the only technology available that can achieve the objectives of reaching broadband to the masses."

    http://www.wimax.com/commentary/blog/blog-2010/april-2010/intel-plans-to-partner-with-india-spectrum-winners-0422
     

  14. Intel Plans to Partner With India Spectrum Winners
    The comments came during a Business Line interview with Sriram Viswanathan, Vice-President, Intel Architecture Group, and General Manager, WiMAX Program Office.  The BWA auctions are expected to begin 2 days after the conclusion of the 3G auctions which are currently underway and expected to be completed in the coming weeks.

    "Intel Capital has taken the initiative to drive broadband adoption all over the world, and is prepared to do it even in India," said Viswanathan.  "We have had discussions with the various players, and are prepared to work with them in a number of ways including enabling specific devices for their networks or creating innovative distribution models."

    Viswanathan stoped short of any direct equity investment saying that the company only considers investments as long as it "meets Intel's strategic and financial targets."

    The Intel executive also downplayed the debate around the recent popularity of TD-LTE (time division LTE) and instead emphasized the availability of WiMAX equipment today.  U.S.  chipmaker Qualcomm has partnered with local Indian service provider GTL Infrastructure and plans to participate in the upcoming BWA auction.  If successful, the joint venture plans to deploy a TD-LTE network using the 2.3GHz spectrum.  Some critics have argued that TD-LTE (different than the more popular FD-LTE) is still several years away from commercial deployments and therefore could result in delays in deploying broadband services.

    "If LTE enables fast deployment of broadband services in the country then that is great," said Viswanathan.  "We are technology-agnostic in that sense and we will also invest in LTE if it develops over the next 2-3 years.  However, at this point in time our bet is on WiMAX since it is the only technology available that can achieve the objectives of reaching broadband to the masses."

    http://www.wimax.com/commentary/blog/blog-2010/april-2010/intel-plans-to-partner-with-india-spectrum-winners-0422

  15. India has moved on.The 2 year long wait for the high speed third generation (3G) spectrum sale to private bidders ended on Tuesday with seven major telecom players. The companies involved were Bharti Airtel (13 circles), Vodafone Essar (9), Reliance Communications (13), Tata (9), Idea Cellular (9), Aircel (13) and S.Tel (3).

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