HCL Tech to cash in on Wimax lines

HCL Technologies is set to become the first Indian company to monetise its efforts in the emerging communications-standard Wimax.

The Rs 2,000 crore company has entered into a partnership with a Canadian company to bring out product designs for manufacturers of Wimax network equipment.

These two companies will bring out readymade designs for wireless base-stations over three months and will follow it up with larger-scale bridging, switching and routing solutions.

The deal has been inked with Wavesat, which two months ago became the first company in the world to receive Wimax certification for some of its fixed-wireless consumer products.

The tie-up is likely to boost up design revenues of the mainly services-based HCL Tech as the company gain royalty revenues beside putting to use its expertise in product-design.

"The new products will use our intellectual property in the area of controlling access by network devices to media," said Sandeep Kishore, vice-president for high-technology at HCL.

The company's royalty gains from its media access control (MAC) component is likely to be long-term and considerable, as the Canadian company is one of the foremost product-designers for Wimax equipment companies.

Wavesat already enjoys product-design relationships with more than a dozen Wimax equipment suppliers worldwide including Agilent Technologies and Infineon.

HCL, along with a few other Indian companies including Wipro and Tata Elxsi has been working on the Wimax products for nearly one-and-a-half years.

Networks based on the Wimax standard is currently in use in many countries including the US and Korea, but demand for network products which work on this platform is expected to go up many-fold as the technology hits its first mobile use in Korea in the next three months. Wavesat estimates the technology to connect at least six crore users over the next four years, including 4 crore on the mobile version.

"Based on an average price of around $35 for a chip-set and 15 percent yearly price erosion, we expect the semiconductor market alone to reach $600 million (Rs 2,700 crore) in 2010. The overall WiMAX infrastructure market is likely to be worth around $5 billion (Rs 22,500 crores)," said Isabelle Pilon, marketing communications, Wavesat.

The Wimax standard, which does away with the voice-data distinction by switching completely to the packet-relay technology, enjoys the support of major communication companies like Intel and Samsung.

While the former is likely to hard-wire the technology to its lap-tops by the year-end, Samsung has already come out with a mobile-phone which works on a modified version of the Wimax standard for users in Korea.

Analysts expect the Wimax technology to make significant progress towards commercial utilization. January this year saw the first certifications for such products.

"If all goes well, 2006 could be remembered as the year WiMAX became real. More fixed Wimax networks will come online, and true mobile trials will commence," said Allen Leibovitch, director of communications and consumer semiconductors at IDC, which released a report on the market two months ago.