VSNL plans Rs 1,000 cr spend for WiMAX

The telephony, mobile and broadband player Videsh Sanchar Nigam (VSNL) has set aside a capex of Rs 1,000 crore for its WiMAX services to be rolled out in several cities. The investment in WiMAX is a part of the total capex budget of Rs 2,500 crore set aside by the company for the next financial year.

VSNL, part of the Tata Group, already runs a WiMAX service for enterprises in Bangalore and has been allocated spectrum for another 50-60 cities.

According to Srinivasa Addepalli, senior vice president - corporate strategy, the company hopes to roll out the services in at least 100 cities before March 2008.

VSNL has roped in the US-based equipment manufacturer Telsima for the supply of customer premise equipment (CPEs) and other equipment. However, Addepalli said that the company is also in talks with other players and is looking for alternate vendors for better equipment.

"Although we are satisfied with Telsima, we are also looking for alternate vendors. The problem in finding the right vendor is the frequency bandwidth allotted by the government.

Unlike other countries where the universal bandwidth is around 2.5 giga hertz (GH), the frequency bandwidth allotted to internet service providers (ISP) in India is 3.3 GH. This makes it difficult to find equipment compatible with 3.3 GH," said Addepalli.

The market is quite unsure of the spectrum allocation for WiMAX services as well, according to Addepalli. While the spectrum allocated to ISPs in other countries ranges between 50 and 90 mega hertz (MH), the government of India has allotted spectrum of just 5 MH.

Nevertheless, VSNL hopes to tap around one million subscribers soon after it rolls out its WiMAX services across the country. The company believes that this forms a major chunk of the probable subscribers in the market. To begin with, VSNL would be offering subscriptions for enterprises in cities and would later move on to individual subscribers.

Offering a speed of at least one mega byte per second (MBPS), VSNL would also be focusing on developing content and a platform for users, added Addepalli. "We are doing a lot in video streaming and educational modules content and would be focusing on this aspect in our business as well," Addepalli added.