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In 2008, the Indian telecom market continued to grow despite the economic slowdown. In particular the mobile sector showed impressive resilience to the general slowdown as the Indian mobile subscriber base grew by 48.5% to reach a total of 350 million.

The Indian broadband sector, on the other hand, continued its rollercoaster ride of anticipation with the government repeatedly delaying spectrum auctions. Although their broadband campaigns remained on the agenda, service providers ended the year with more confusion regarding where their businesses were headed than a clear BWA/Wimax/3G strategy. The immediate concern for service providers was to boost and buttress 2G voice subscribership.
 
In its 3rd edition report ""India Wireless Broadband and Wimax Market Analysis and Forecasts, 2009-2013 - 3rd Edition\' Maravedis and Indian research partner Tonse Telecom provide some interesting updates.

The hottest application in India is still Internet access. Data services are still not meeting basic user needs with large sections of DSL users complaining of sporadic performance and marked unpredictability of data over copper lines.

Small and Medium Enterprises (SME) and SOHO/home users continue to remain underserved but promise the highest levels of growth rates in terms of bandwidth consumed. We believe there is ample room for growth in this sector and BWA/Wimax is a natural ally to meet this demand.

Incumbent BSNL and the government of India, with its many key initiatives to initiate e-health and e-commerce activities, will play a lead role in unleashing wireless broadband in the country. The pre-allocation of 2.5GHz bands for incumbent operators BSNL / MTNL is going to help with a clear lead time to plan and roll basic networks first and then add enhanced value-added services later.

Lead operators such as Reliance have a crystal clear idea to opt for 3G as well as Wimax and deploy best-fit applications to best-fit market segments. As a cross-over operator with an established CDMA base - and now building a pan-India GSM network - the synergies in bringing in BWA/Wimax over existing pockets of 3.3GHz, encapsulated with a dense tower base, interconnected with high quality fiber/Metro-Ethernet rings are simply too compelling. As a result we believe the battle for BWA/Wimax spectrum will be intense across all circles
 
The past year has brought about 200,000 BWA/Wimax subscribers to the fore. Tonse/Maravedis estimate that by 2013, the combined BWA/Wimax subscriber base will grow to about 14.16 million, out of which about 13.4 million will be Wimmax subscribers.
 
The government has already introduced multiple initiatives to ensure that the digital divide is either eliminated or at least reduced in the short term. The Common Service Centers (CSC) initiative jointly adopted by the Department of IT and the Department of Telecommunications is a great way to kick start the Internet in rural communities with e-banking/e-governance, health, education and social services around a village entrepreneur via broadband connectivity, the bulk of which will be wireless.

Policy makers should focus on affordable, rapid connectivity using low-cost devices and technologies that will help take the Internet to the Indian masses quickly. Low cost mobile Internet devices, NetPCs and other similar technologies will help break the barrier and create a new level of broadband consumption in India hitherto unimagined.

Key Findings Include:

"¢ The Indian BWA/Wimax subscriber count added in the last year is well above 250,000.
"¢ BWA/Wimax ARPU for SMEs is in the range of Rs 2500 - Rs 5000 ($50 to $100)
"¢ USB modem prices quoted to service providers in RFP responses were as low as $35 - $50 for even small volume shipments such as 150,000-200,000.
"¢ Effective charges applied by service providers to subscribers for stand alone CPEs ranged from free to $200, depending on tariff plans.
"¢ Service provider approaches to BWA/Wimax are mixed:
"¢ BSNL - the incumbent with a clear lead time (likely one year) on pre-allocated pan-Indian 2.5GHz - is likely to be the big driver of Wimax.
"¢ Operators such as Reliance and Tata have demonstrated what can be done by using slim 3.3GHz bands, and established the case for fixed Wimax in India.
"¢ Operators such as Bharti Airtel have taken a demand-driven approach where they have extended coverage based on enterprise need/availability of fiber/DSL and feasibility of BWA/Wimax.

The application areas for Wimax and 3G continue to be open; there is room for both technologies in a severely under-served narrowband market such as India. Industry friendly regulation, affordable and adequate spectrum, and easy availability of low-cost devices are key enablers of this migration from narrow-band voice to the broadband data market.

Operators are ready and consumers and businesses are willing. We expect the floodgates to the Indian digital economy to open once these enablers come together post-auctions/spectrum allocations.

Maravedis and Tonse Telecom will release a Spectrum Supplement after the spectrum allocations are completed either later this year or 2010.