Co to act as back haul service provider to 3G customers.

Adith Charlie

Mumbai, July 11

Tikona Digital Networks, which recently bagged the broadband wireless access (BWA) licence for five telecom circles, is in talks with 3G-equipped mobile operators to offer its broadband services on a revenue sharing basis.

Riding on the back of the 20 megahertz (Mhz) BWA spectrum it has bagged for each circle, the company intends to act as a back haul service provider to the 3G or third generation customers of existing mobile operators.

Speaking to Business Line, the Tikona CEO, Mr Prakash Bajpai, said: “We are speaking to both 3G and 2G operators to see whether they could offload their data traffic on to our cloud.

Since 3G winners only have only 5 mhz of spectrum available (in each circle) they are constrained by capacity. Since we have both licensed and unlicensed spectrum our capacity comes in at much lower cost points.”

Earlier this year, Tikona became the first internet service provider in the country to deploy wireless broadband services on the Multiple-Input and Multiple-Output platform by using about 110 Mhz of unlicensed spectrum in two different frequency bands.

Explaining how the proposed arrangement with 3G operators will work, Mr Bajpai said: “If you have our coverage at your home, the data traffic will not load up on your mobile operators' scant and expensive 3G spectrum but will come to Tikona's network. It will still go through your operator's back end but we will be doing the heavy lifting part.”

A tie-up like this will enable mobile phone users to get data speeds of two mega bits per second, claims Mr Bajpai. (A speed of 2 Mbps is considered to be the fastest in the Indian wireless broadband service market.)

Tikona, which was formed by former officials of Reliance Communications, expects to forge at least one such collaborative arrangement in the next six months.

However, Mr Bajpai has ruled out the possibility of an equity-based partnership with telecom companies.

The company plans to provide its services to corporates, small and medium businesses and retail customers in 150 cities.

It was one of six companies to have been awarded the BWA spectrum in a process which helped the Government raise more than Rs 38,500 crore.

Infotel, which was later acquired by Reliance Industries, was the only player to have won BWA spectrum in all 22 telecom circles of the country.

Considering that there are only two BWA slots in each circle, will the other five operators join hands to counter RIL's might?

“This is something which we do not even need to assert since it will happen naturally. Other than the one pan India player, the rest of us are in a naturally complementary formation,” said Mr Bajpai, adding that such a move will be a win-win for both customers and vendors.

However, Mr Bajpai feels it is too early to talk about specific vendor collaborations given that most of the BWA winners will first have to first build their networks.

Tikona recently raised about $250 million through a mix of share sale, debt and equity convertible instruments from existing and new investors.

(This article was published in the Business Line print edition dated July 12, 2010)
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