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Reliance Plots Global WiMax Rollout

Ray Le Maistre
4/24/2008
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No one could accuse Global Cloud Xchange of lacking ambition.

Having announced in 2007 its plans to invest $1.5 billion on new subsea network construction, $500 million on a new integrated network in Uganda, and another $200 million to expand its international Ethernet services capabilities, the Indian operator has now earmarked $500 million to become a global WiMax service provider, with plans to offer 4G services in 50 countries by 2012. (See Reliance Makes African Acquisition, Fujitsu Scores Massive FLAG Deal, and Yipes! Here Comes a Spending Spree.)

And Reliance is adopting a well versed strategy to propel itself into the WiMax world.

The Indian operator's subsea and Ethernet service expansion plans were underpinned by the strategic acquisitions of FLAG Telecom Ltd. and Yipes Enterprise Services Inc. . (See Reliance Bags Yipes for $300M, Reliance Raises Flag , and FLAG Amalgamates With Reliance.)

Those companies are now part of the recently-formed Reliance Globalcom. (See Reliance Integrates Global Services.)

Now it's doing the same thing with WiMax, basing its global rollout plans on the acquisition of a controlling stake in eWave World Ltd. (no corporate Website), an 18-month-old startup that has been striking relationships with WiMax license-holders in a number of emerging markets around the world.

eWave's chairman Jay Metcalfe, who has experience with emerging markets operations from his time as CEO of international mobile operator Millicom International Cellular, S.A. , says Reliance now holds a 90 percent stake in the startup following a recent rights issue.

In return for that stake, Reliance is providing the funds to turn eWave's strategy into reality.

Metcalfe says the eWave team of about 15 people, which includes the former CEO of British cable operator NTL (now Virgin Media Inc. (Nasdaq: VMED)) and a number of his fellow former Millicom executives, has been seeking out WiMax license owners in emerging markets and striking investment deals. (See Duffy Quits NTL.)

"Our vision is to bring broadband access to the emerging world, where there is very little, and in some cases no, broadband access currently. It's a big opportunity, and WiMax is a technology that can help fill that gap," says Metcalfe.

Acquiring WiMax spectrum
"We found that a lot of spectrum had been awarded to local entrepreneurs and ISPs who didn't have the experience or the capital to do anything with it," continues Metcalfe, adding that about 20 deals are already in place to acquire or take stakes in those companies, using Reliance's injection of capital.

Most of those 20 deals already include allocated spectrum, though a few still need some regulatory approval, notes Metcalfe. He says the licenses include a mix of spectrum bands –- 2.3GHz, 2.5GHz, and the 3.0GHz range -– but "we're agnostic to the band. We are sensitive to the amount of spectrum available," as eWave needs to be sure there is enough for "economically viable mobile networks."

Metcalfe says he can't name the parties involved in the proposed deals or identify the specific markets until the acquisition and investment deals are signed and sealed, which will happen in the coming months. He did note, however, that they were spread across Latin America, Africa, Eastern Europe, and Asia/Pacific.

Reliance, though, already holds a broadband wireless license in India. (See India Looks to WiMax.)

As for the technology to be deployed, the chairman says that 802.16e, also known as mobile WiMax, is "our vision, though we may deploy fixed WiMax technology in some markets initially. It depends on the timing. Our long-term vision of WiMax is that it's a mobile technology -- a 4G technology."

Metcalfe says eWave has a CTO, another former Millicom man, Joel Hariton, who has been engaging with equipment vendors about the rollout plans.

China joint venture
eWave has also struck a joint venture agreement in China. Again, Metcalfe says he can't name the Chinese partner at this stage, but says it's a "high-level government institution that has already built a 36,000-kilometer national fiber network."

He continues: "We have rights to some strands in that fiber network and will use that fiber as the basis to build a broadband services business in China. We expect to launch broadband services there some time in the next few months. We are also in discussions about a WiMax license for China."

Mobile WiMax not without its challenges
Heavy Reading senior analyst Gabriel Brown says the decision to use mobile WiMax technology makes sense but isn’t without its challenges.

"Even though 3G is shipping in volume, greenfield operators typically want to move directly to next-generation OFDMA [orthogonal frequency-division multiple access] technology," such as WiMax, says the analyst. (See Flat Is Back: Toward the All-IP Mobile Network, WiMax, Wireless Mesh & Muni Networks, Sarin: We Need 4G Convergence, and Nortel's Big WiMax Bet.)

"High-growth emerging markets are the biggest opportunity for WiMax, but equipment and terminals will need to be ultra low-cost to make the service provider business viable, and there's not yet enough product volume in the market to get prices where they need to be."

In addition, "operational costs also have to come down in areas such as site installation, backhaul, power efficiency, and automation of network management," to make such a plan feasible, Brown says.

Reliance and eWave look to have set themselves an ambitious target to offer WiMax services in so many markets with a $500 million budget, but Metcalfe notes that the $500 million investment from Reliance is "a movable feast –- it's more an indication of the level of commitment from Reliance."

He adds: "The amount of money required will depend on the number of licenses we have -– the target is to be in 50 countries –- and how quickly we can build the networks, and how big the networks are. It's likely that we will, eventually, need additional capital and that we'll need to tap other sources for that. This is a capital intensive plan, just like building out cellular networks."

— Ray Le Maistre, International News Editor, Light Reading

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lrmobile_kumaramitabh
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lrmobile_kumaramitabh,
User Rank: Light Beer
12/5/2012 | 3:42:13 PM
re: Reliance Plots Global WiMax Rollout
The acquisition by RCom of controlling interest in eWave World and its intention of investing $ 500 million in rolling out WiMAX networks is an endorsement by one of the largest companies in India in the field of providing mobile and wireless solutions. Coming as it does on the heels of an announcement by Tata communications of investing $500 million in rolling out WiMAX networks in India, over $ 2 billion is now planned to be spent by the WiMAX companies for networks in India and other regions of the world ( Latin America, Middle east, Africa and Asia).

A series of Mobile network launches in the recent past ( Bulgaria( Max), Canada ( Inukshuk), USA( Craig wireless), Vietnam, Singapore, Malaysia, India and others) is now set to repeat a GÇ£GSMGÇ¥ in creating compatible wireless broadband networks which will soon have roaming arrangements as well.

Increasing availability of mobile WiMAX wave 2 devices with MIMO ( pre-certification as well as certified) and the quickening pace of certification by the WiMAX forum is increasing the mobile WiMAX ecosystem very sharply. The pace of developments in this field is very rapid after the operators are satisfied on the performance which can be achieved and the services which can be delivered over the WiMAX networks.

With Dan Hesse, CEO of Sprint agressively defending the the doubts on rollout of XOHM, the scene for WiMAX is not so bleak. After over 350 trials around the globe commercial networks are being added one a week signifying a new trajectory for Mobile WiMAX in the world.

http://www.mobile-wimax.in
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