Five companies have bid for BSNL’s WiMAX contract in urban areas under the franchisee mode. Huawei which emerged as the highest bidder for the rural WiMAX contract did not submit its bid for the urban project. Moreover BSNL’s current partner, Soma was also conspicuous by its absence from the bidding process.
ZTE is partnering E-Mall and Take Solutions for the contract. Cisco has submitted its bid through Teracom while Alvarion is partnering Adishwar and Ampules.
BSNL’s new guidelines for the franchisee model stipulate that bidding companies should have minimum turnover of Rs 100 crore. It is not known if these unheard entities qualify this criteria.
Soma which is partnering BSNL in three circles namely Gujarat, Maharashtra and Andhra Pradesh for WiMAX services did not submit its bids. Additionally Huawei which surprisingly emerged as the highest bidder for BSNL’s rural project also did not submit its bid for the franchisee contract.
Huawei was chosen by BSNL in the original contract awarded in February this year. But the contract was scrapped after it came into light that the contract was awarded to companies which existed only in papers. It was alleged that the contracts in five circles were awarded to a person named Sanjay Kapoor who directly or indirectly owned all the entities which won the contract.
Gemini Communications which is the lowest bidder for BSNL’s rural WiMAX rollout also did not submit its bid.
WiMAX roadmap in India is still unclear. Unfortunately the government’s obsession with 3G has resulted in little attention being paid to the policy and spectrum framework needed for sustainable business proposition in the WiMAX segment. For instance globally operators bank on atleast 30 MHz of spectrum for WiMAX rollout. In India the maximum which will be available to operators initially will be only 20 MHz. Moreover the upcoming auctions for BWA service widely believed to be pertaining to WiMAX are restricted only to 2.3 GHz. For the 2.5 GHz band the government will decide only after discussions with the Department of Space.
Additionally WiMAX is considered to be more suited to urban areas. For rural areas especially in the Indian context, there are serious concerns about a profitable business model. The reasons are multifold including factors such as lack of backhaul integration.
BSNL’s contract to Soma too had raised eyebrows as the contract was awarded without any tenders. BSNL claimed that it was using the contract as a testing ground for WiMAX services. Soma was offering the service under FDD mode of WiMAX standards which do not conform to WiMAX Forum standards.