Tata Comms Mulls Its WiMax Strategy

Following its unsuccessful bid for BWA (broadband wireless access) spectrum in the recent auction, Tata Communications Ltd. , one of India's most committed WiMax service providers, is having to reconsider its business services strategy. (See India's BWA Auction Ends in $8.2B Drama.)

"We have been using WiMax to provide services to the enterprise segment and will continue to do so. However, the larger growth plan where WiMax is concerned is on hold right now," Srinivasa Addepalli, the operator's senior vice president for corporate strategy, told Light Reading Asia. (See Tata Unleashes WiMax in India.)

Tata Comms, which offers its fixed WiMax services to enterprise customers using the 3.3GHz band, has deployed more than 1,400 base stations in 140 cities across India, and has previously committed to invest US$500 million in its WiMax network between 2008 and its 2012 financial year.

The operator, which provides a full range of communications services to business users, had signed up 50,000 broadband wireless customers by the end of 2009 through its wholly owned subsidiary, Tata Communications Internet Services Ltd. (See Tata Gets Cloudy With Google, Tata, BT Connect Via Telepresence, Tata Comms Boasts Strength, Tata Adds to Managed Security, and Tata Launches Video Network.)

Tata Comms was hoping to expand its services with some 2.3GHz spectrum from the BWA auction, but came away empty-handed.

Analysts believe that, despite its bullish stance on WiMax, the company pulled out of the race once the bids started to reach irrational levels. Two slots of 20MHz capacity in the 2.3GHz band were up for grabs in the auction, which raised an unexpectedly high total of 385.4 billion Indian rupees (US$8.22 billion) for the government.

Now Tata needs to consider its options.

"[One] thing they can do is tie up with another operator who has got spectrum, but clearly this is not a very appealing option," says Neeraj Jha, director, transaction services, at KPMG International.

Tata's Addepalli declined to comment on whether the operator might seek to share the spectrum awarded to the auction's successful bidders.

Another option is to wait for more spectrum to become available. According to a reliable industry source, the Indian government is planning to auction an additional slot in the 2.3GHz band soon, a move that would provide Tata Communications the chance to revive its WiMax plans.

The operator isn't committing itself to involvement in another bidding process, though. "We will announce our plans once the government announces the auction," says Addepalli.

— Gagandeep Kaur, India Editor, Light Reading

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