The Hindu Business Line : Intel weighs WiMAX-related opportunities

We will have a commercial agreement, which will be wrapped around an equity investment,” says Mr Sriram Viswanathan, Managing Director, Intel Capital.

Vishwanath Kulkarni

Bangalore Dec. 19 Intel Capital, the investment arm of the world’s largest chip maker Intel Corp, is exploring options to invest in Indian telecom operators companies and software makers as it gears up to promote the WiMAX ecosystem in the country.

WiMAX or Worldwide Interoperability for Microwave Access is a technology that enables the delivery of last mile wireless broadband access over long distances.

“We are in talks with several telecom operators and software developers, infrastructure and value added companies,” said Mr Sriram Viswanathan, Managing Director, Intel Capital, without disclosing details.

The company has not earmarked a specific quantum of funds for WiMAX related investments in India. However, these proposed investments would be outside of the current $250 million India-specific fund.

No capital constraints

“We are not constrained by capital and there’s no limitation on how much we can invest,” said Mr Viswanathan, adding “the company could make investment from as small as a million dollar to billions.”

Explaining the rationale behind investing in telecom operators, Mr Viswanathan said some of the operators do not have adequate capital as much as they would like to make the necessary investment.

Tech partners

Also these operators were seeking technology partners.

“Having us invest, binds our commitment to them more. We will have a commercial agreement, which will be wrapped around an equity investment,” Mr Viswanathan said.

Intel Capital is looking at one or more investments in telecom operators with an IRR (internal rate of return) of 20 per cent, he said.

Further, these investments are expected to open up market for the portfolio companies of Intel.

Collaboration plans

Recently, Intel announced plans to collaborate with Indian manufacturers and providers to promote the distribution of WiMAX-ready devices by mid-2009.

The company expects to focus initially on the promotion of 2.3 and 2.5 GHz devices.

Indian companies will be assisted by the Open Patent Alliance and additional entities to determine device requirements, timelines, testing and interoperability plans.

Auctions get closer

The anticipation for WiMAX in Indian continues to grow as the upcoming auction for 2.3 and 2.5 GHz frequency bands gets closer. In addition to one 20 MHz block already allocated to BSNL in the 2.5 GHz band, the auction will enable two 20 MHz blocks in the 2.3 GHz band, and another 20 MHz block in the 2.5 GHz band.

The WiMAX Forum estimates that there will be more than 27.5 million broadband Internet users in India by 2012. However, the number of users could expand faster than anticipated following the auction of 2.3 and 2.5 GHz frequency bands.

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