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Infotel Broadband: Gearing up for 4G service launch

March 13, 2013
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Being the only broadband wireless access (BWA) player to hold a pan-Indian licence since 2010, Reliance Industries Limited (RIL)-owned Infotel Broadband Services Limited was expected to bring about a data services revolution in the country. However, the company has been delaying the launch of its 4G services and is likely to face stiff competition from rival Bharti Airtel, which introduced its 4G services in 2012 in the Kolkata, Bengaluru and Pune circles.

Infotel has kept the industry guessing about its go-to-market strategy and network roll-out plans. Recently, it was reported that the company would launch 4G broadband services in Mumbai and Delhi in 2013. However, a nationwide launch has been ruled out at present.

The launch of Infotel’s 4G services is being eagerly awaited as it would mark the re-entry of RIL into the telecom sector. It is widely anticipated that RIL, credited with reducing the overall cost of voice services, will follow a similar strategy of targeting the masses by offering low-cost data services.

Current status

The company has been making headway in the run-up to its 4G services launch. It has tied up with content providers such as Extramarks Education and Network 18 to bundle innovative content for its 4G offerings. Infotel is likely to offer Extramarks Education’s services, including e-learning, to the student fraternity through its 4G network. It has also signed an agreement with Network 18 that gives the former preferential access to the latter’s entertainment and internet products and services. The deal will enable Infotel to provide live TV services with channels such as CNBC TV18 and CNN-IBN Live, and e-commerce services through bookmyshow.com.

On the network infrastructure front, the company is currently in talks with foreign vendors for the supply of network equipment for its 4G operations across all circles. It has shortlisted the Infinera Corporation, Ciena Communications and Alcatel-Lucent for the supply of optical network transmission equipment based on dense wave division multiplexing (DWDM) technology. The scope of the contract includes responsibility for handling system design; and supply, installation, commissioning and integration of DWDM equipment. The company has also signed a deal with Samsung to supply long term evolution (LTE)-based radio access and packet core network for its pilot projects in Delhi and Mumbai.

Meanwhile, Infotel is planning to deploy its own low-cost towers and lease some from other tower companies. The company is in discussions with Reliance Infratel, a subsidiary of Reliance Communications, for leasing towers across the country. The deal would benefit Infotel as most of Reliance Infratel’s 50,000 towers are linked with optical fibre backhaul that will facilitate high data transmission speeds. Moreover, this would partially reduce the high capex involved in setting up optical fibre networks.

The company also faced issues related to the unavailability of devices that support voice over LTE. However, it has selected Russia-based telecom equipment vendor SPIRIT DSP for supplying TeamSpirit software engines, which will enable Infotel to offer high definition voice and video services over its LTE network.

Competition with Bharti Airtel

RIL’s acquisition of Infotel and Bharti Airtel’s purchase of Qualcomm’s Indian subsidiary, which holds BWA spectrum in the coveted Mumbai and Delhi circles, highlights the stiff competition between the two players in the broadband space. In this regard, Airtel has a head start over Infotel having launched its 4G services in three circles.

Moreover, considering that 3G service uptake has not yet picked up, Infotel is likely to bundle voice with data services to earn healthy returns on its investment. However, the company will face stiff competition from telecom operators, including Airtel, that have a strong customer base as well as 2G and 3G network coverage.

One of Infotel’s biggest concerns is the fact that its BWA spectrum is in the 2300 MHz band, which is considered less efficient than spectrum in the 700 MHz band. Moreover, given that the company has already invested Rs 13 billion for acquiring pan-Indian BWA spectrum, it is less likely to acquire significant spectrum in the 700 MHz band, which will be auctioned in 2014. Airtel, on the other hand, would look to acquire considerable spectrum in the 700 MHz band.

Nevertheless, Infotel is expected to make significant profits from the 4G service launch through its innovative content portfolio and nationwide presence.  Competitive pricing and the development of the LTE ecosystem will drive the mass adoption of 4G services going forward.

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