The Hindu Business Line : `Heed the WiMax call'

A telecom industry veteran from Australia feels WiMax is a viable technology to boost telephony in India. This is because WiMax now has a global standard and would help one build low-cost products.

Paul Budde

Operating one of the largest telecommunications research sites on the Internet, Paul Budde, Managing Director of Paul Budde Communication, Australia, is an industry veteran, with over two decades of experience tracking new media. During his recent trip to Chennai, he shared his views with eWorld on broadband penetration, WiMax, and the need for India to invest in network infrastructure in a big way.

WHERE do you see the convergence market or the triple play of video, voice and data heading? Since the dotcom and telecom meltdown, what do you think has fundamentally changed in this market?

There have been two fundamental changes. One, knowledge of what we can and cannot do. That's where broadband comes into the picture. In the US, you are seeing cable companies introducing VoIP (Voice over Internet Telephony), in Hong Kong, the triple play models are working. Slowly, you are seeing promise turning into reality.

The other factor is the availability of networks. As regulators began to intervene, dominant telecom companies have opened up their markets. They did that primarily to help build networks so that people can actually create triple play models, independent of the telecom companies.

There has been a lot of buzz around WiMax for creating broadband capability in India. Do you think this is a realistic step?

WiMax for broadband, in theory, has a much better chance to become wireless broadband technology than 3G (third generation mobile telephony) or any other mobile network. It will be sensible to use WiMax technology because it's cheaper. Since the mobile networks are incredibly big, just signing up customers for phones can occupy them. So, they don't move as fast as probably other wireless technology providers would. What might happen is that some of the mobile operators will start using WiMax, but they will be separate networks.

Why do you think WiMax can prove to be a successful technology?

The reason is for the first time we have a global standard for WiMax. A global standard helps you build low-cost products compared to the current technology that is expensive to deploy in sparsely-populated areas. Once the cost comes down, you will start seeing the rise in mobile usage.

I think the telecom regulator should play an important role in encouraging the development of WiMax.

We have to be careful not to let only the mobile operators dominate the debate on this matter.

Mobile operators will try to get the best spectrum infrastructure that favours them. And suddenly you will find that when WiMax comes in, they are the only ones who can offer it. That's why the debate on this issue is important. There is a need to delicense or set aside spectrum specifically for WiMax.

It will also make a lot of sense to produce these hardware requirements within India.

In India, how do you think broadband penetration can grow, since Bharat Sanchar Nigam (BSNL), the incumbent, controls a sizeable chunk of the copper cable that reaches homes?

To start with, I think an enormous amount of infrastructure work needs to be done in India. As a country, you will have to make the decision as to how important the infrastructure is and how you can actually speed it up. How you can get more networks out in the cities, forget the rural.

I believe you can only do that if you separate infrastructure building from retail. There would only be one entity building the infrastructure. Use this company, be it BSNL or whatever, to build only infrastructure and do nothing else.

All the other companies could do retail. The retail side should be totally open and everybody should have equal access to the infrastructure.

In India, we have 50 million fixed and 60 million mobile subscribers and most of the investments are being directed towards mobile. Not much investment is going towards fixed lines because financial viability and local call pricing remain an issue. How do you think this can be remedied?

Unless you actually have totally dedicated infrastructure companies such as electricity and other utilities, investments will not happen. They are low-margin companies. But these are companies that think long-term and make investments with a seven-year horizon and are not disturbed by the next quarter.

We have not seen the growth in fixed connections in India as we had expected 10 years ago. But we have to learn and find a new way. There has to be an Indian way. Then you need a grand plan, a national blueprint that tells you where you need fixed networks.

The key issue - we can serve villages with mobile networks, but we need fixed networks in cities. How do we get fibre to the home? I think with fibre optic IP-based networks.

BSNL has been trying to raise the local call charges for the last few years. While long-distance charges have been slumping, local charges have not been going up?

The model that India needs to follow is to be able to stimulate infrastructure. There are many ways in which you can do this. But the focus should be on infrastructure that is to be built. Then you can say, if you build infrastructure, what is the revenue model for it.

If a company wants an 80 per cent return on investment, forget about it. Sorry, that's not the model. You have to have a utilities approach.

The discussion will need to be between infrastructure on the one side and having competition in services on the other side.

Every year you build a network, you see prices drop the following year. Second, the whole circuit switched network is outdated, thanks to Internet-based architecture. Even if we know there is nothing great beyond the Internet, how do you address the pricing issue?

I am confident that Internet protocol-based technology is here to stay for another 5-10 years.

There is no doubt in my mind. If you start seeing the billions of dollars invested around the world in IP, it confirms that these companies have done their calculations and wanted to upgrade to the IP model.

Fibre to the home is safe for the next 25 years. There is no other technology on the horizon.

When I started my business back in 1978, there was talk about fibre optics. While it wasn't already there, we knew it would happen eventually. There is no such talk of newer technologies right now.

In India also, you need to head in the same direction. Once we do that, there will be tens of thousands of wireless broadband providers who will start setting up shop across Indian cities and that will create demand across the network.

maverick@thehindu.co.in

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