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3G services in India have not yet really made a splash apart from state run operators MTNL and BSNL. The 3G auction for private operators has been facing delays and has not happened yet. But there is already a tender out for 3G femtocells in this case by MTNL.



The MTNL femto RFP invites femtocell vendors to submit their proposals for femtocell deployment where MTNL will evaluate, test and deploy the devices in a two-stage process. In the first stage, the vendors that apply will be allowed to deploy their solutions at their own cost. The ones that are successful in the first stage pilots will be allowed to proceed to the second stage. They havent specified how many vendors will be allowed to proceed to the second stage. The business case for the second stage has been left open-ended, with the possibility that MTNL purchases the solution or does a revenue share. This will be discussed with the vendors that have been selected.



MTNL operates out of Delhi and Mumbai, the two largest and most populous cities in India and so the deployments will be in those two cities. MTNL also seems open to looking at both consumer and enterprise markets. It looks like MTNL is committed to moving things quickly and want vendors that submit a proposal to commission their femtocell solution within three months of their submission. With interoperability tests for 3G femtocells scheduled for March, MTNL might be able to gain from using 3G standardized solutions in their network when deployments actually take place.



Although MTNL will be providing the backhaul broadband connection the reliability of backhaul comes into question. This is due to the quality of copper that is present at the last mile. MTNL and BSNL have tight control on the last mile copper and some have suggested that between 20-50% of this copper is unsuitable for DSL services. Vendors that can provide solutions which work around or overcome reliability issues on the backhaul will have an upper hand in this market.



The enterprise market is a prime candidate for femtocell (even picocell) solutions in India. The current cost of the femtocell makes it prohibitive for the residential market in India and so we might only see enterprise rollouts of these solutions for the first few years. With many of the enterprise locations having high-quality broadband services, and with indoor coverage being an issue in many of the glass/concrete offices across technology parks in India, femtocells/picocells have a definite role.



While 3G is controlled by state run operators for the moment, there could be a bigger demand for 2G femto/pico solutions, especially in the enterprise, with voice being the primary value proposition. The delayed 3G spectrum auctions also dampen demand for 3G solutions. And so while femtocells make a foray into the Indian market its hard to see vendors really counting on large volumes for the moment.

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