DoT eases roll-out obligation for WiMax players

At a time when the broadband penetration is growing at a dismal pace, the Government has relaxed the rural roll-out obligation for wireless broadband players.

The Department of Telecom has decided to give WiMax players five years to fulfil their roll-out obligations instead of the earlier proposed two years. DoT had earlier mandated that operators using technologies such as WiMax for offering broadband should cover at least 25 per cent of the rural areas within two years of acquiring spectrum.

In the revised guidelines, DoT has done away with this and said that the operators will have to roll out their network to 50 per cent of the rural areas and 90 per cent of the urban areas in five years time. This is similar to the roll-out obligations imposed on operators offering third generation (3G) mobile services. The move will benefit operators getting WiMax spectrum as they will have more time to cover rural areas.

Industry analysts said that the relaxed roll-out norms could also increase the value of spectrum, thereby giving more revenues to the national exchequer during the auction. However, detractors point out that the decision is against Government’s stated policy of increasing broadband penetration quickly. There are only about five million broadband subscribers in the country now.

The Government is betting big on the uptake of wireless broadband technologies such as WiMax to improve the growth rate. However, a relaxation in the roll-out obligation could ease the pressure on operators to ramp up their network, especially into the rural areas. Subscribers in rural areas could, therefore, now get wireless broadband coverage in only five years time instead of two years. DoT officials said that the efforts were to put roll-out conditions with which the operators are comfortable rather than forcing them to accept something now and then default.

They said operators had defaulted in the past where the roll-out obligations were unrealistic. Existing fixed line operators and cellular companies have failed to meet their commitments despite repeated extensions by the Government.




 In some cases, operators have chosen to pay the penalty instead of going into unviable areas. “We do not want the operators to falter on the roll-out. That does not benefit anyone,” said a DoT official.

DoT also wanted to bring parity in the roll-out conditions between 3G and WiMax. However, industry observers said that while 3G would essentially be a premium service initially limited to the urban areas, wireless broadband using WiMax can play a larger role in reaching connectivity to a wider user base. While both 3G and WiMax essentially enable high speed data connectivity, it is the latter which is being positioned for data services like e-governance, e-medicine and e-education on lap tops, PCs and Internet devices. WiMax is better suited for rural areas as one base station can cover up to 50 kms. 3G, on the other hand, is being largely utilised globally for efficient voice calls with some data services on mobile handset devices. According to Frost & Sullivan Asia-Pacific countries, including India, can potentially boast of 43 million WiMAX subscribers by end-2013, generating estimated revenues of close to $11 billion, at a compound annual growth rate of 45 per cent.