At least 20 companies have lined up to become a franchisee for rolling out WiMax based broadband services by Bharat Sanchar Nigam Ltd.

While big firms such as Intel, Motorola, Huawei and Alcatel-Lucent have expressed interest, smaller and relatively unheard Indian firms such as Aban Informatics, Adina Telecom, Cals Refineries, Wellcom Communications and Digitelco Communications have also queued up.

BSNL had invited bids from prospective franchisee partners on a revenue-sharing basis. The companies which win the contract will use BSNL’s spectrum and infrastructure to offer WiMax based broadband services. The catch, however, is that foreign companies cannot directly own the entire franchisee. This means companies like Intel and Motorola will have to partner with an Indian entity if they want to participate in this project.

According to industry sources, some of the Indian firms, which are in the fray, have offered to partner the multinational companies but are asking for a premium for an equity stake. “Some of these companies exist only on paper. Recent windfall gains by some Indian promoters by acquiring cellular licences and then selling off equity at a premium may have inspired some of these companies to join the fray. They are hoping to make a quick buck at the cost of BSNL,” said an executive of a large multinational company.

BSNL has earmarked close to $750 million for its WiMax roll out. As per the expression of interest document floated by BSNL, the franchisee will be selected after a two-stage bidding process. The bidder shall submit both techno-commercial and financial bids at the initial stage. BSNL will choose a franchisee for each circle.

The PSU has already chosen US-based SOMA Networks to roll out WiMax across three States — Gujarat, Maharashtra and Andhra Pradesh.

This was done without floating any tender. BSNL officials said that since WiMax is a new technology, the company wanted to start services on a pilot basis in few areas and therefore SOMA Networks was chosen before the tender was issued.

BSNL wants to be the first to roll out wireless broadband on the 2.5-Ghz band. While private telecom companies have to bid for spectrum in this band, BSNL and MTNL have got automatic allocation. Broadband services on WiMax technology promise high-speed Internet access on laptops and mobile handsets.

Source:thehindubusinessline