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New Delhi: When chip-maker and patent licensor Qualcomm entered the broadband auction two months ago, it set the alarm bells ringing in the Wimax camp. They feared that Qualcomm may buy spectrum throughout the country and sit on it, waiting for its favourite technology, LTE, to mature.
With the results of the auction out, there is both good news and bad for the Wimax camp.
Qualcomm won only 4 circles, but it is determined to get the biggest bang for its buck.
In a move that has set the alarm bells ringing in the telecom equipment industry, Qualcomm announced it will ‘divest’ the four circles only to the operators who are ready to roll out the kind of network 3G network it envisions.
In other words, it has held its 4G spectrum as a prize for the operators who will implement the ‘correct’ 3G strategy, which many, especially the Chinese vendors, fear will act against them.
Kanwalinder Singh, Qualcomm’s president for India and South Asia, categorically stated that the firm will share the 4G spectrum in a circle only with players that also have 3G spectrum in the same circle.
Telcos like Reliance Communications, Tata Teleservices and Bharti Airtel, which were hoping to win over the entire 4 circles, were left with no option but to lower their expectations.
For example, Reliance and Bharti don’t have 3G spectrum in Haryana or Kerala, two of the blocks cornered by Qualcomm. Similarly, Tata, Aircel and Idea — the other big winners — don’t have 3G spectrum in Mumbai and Delhi.
Singh said the idea behind acquiring spectrum was not to hand it over to a single operator or tip the balance in favor of anyone, but rather to incubate “3G+” services.
So, if an operator already has 3G spectrum in a circle, Qualcomm will consider partnering with them if they share the same vision of where the technology and services are going. In other words, only if the operator is no fan of Wimax and is willing to play the LTE game.
For example, Aircel has won eight circles, including the southern states of Tamil Nadu and AP, and a share of the Kerala 4G spectrum from Qualcomm would fit right into its business model for contiguity.
However, partnering Qualcomm in Kerala is a possibility only if Aircel ‘shares’ Qualcomm’s vision of the mobile future - based on LTE rather than Wimax.
Similarly, Bharti, which won four circles, including Punjab, stands to partner Qualcomm in Delhi or Mumbai or both, provided it too shares the same vision as Qualcomm. Singh also clarified that the other two big operators, Tata and Reliance, are also in the picture as they too have 3G services in all the four circles where Qualcomm is present, in the form of the CDMA 3G service called EVDO.
“The auction was set up for 3G+ services,” said Singh, shortly after the results were announced. He pointed out that Qualcomm was bringing out ‘multi-mode’ chips which supported both 3G and LTE technologies and Qualcomm would share its spectrum with players in such a way that such technologies can be put to use. He pointed out that the four circles were chosen so as to give Qualcomm the biggest number of possible partners.
While supporters of Wimax, including Samsung, Intel and Motorola, worry about the implications of Qualcomm’s win, the Chinese equipment vendors too are very worried. They fear that they are not in Qualcomm’s good books as they cater to both LTE and Wimax technologies, unlike the European vendors such as Nokia Siemens Networks and Ericsson who only support LTE.
At stake is around $3 billion worth of 3G equipment and installation contracts, besides around $2 billion worth of 4G equipment contracts.
“It is a last ditch effort by both the camps and every one is going all out to make sure they win,” pointed out an official with a Chinese vendor.