Telsima racks up $100M WiMAX deals

WiMAX equipment provider
Telsima Corp. announced two tier-one operator deals in the fastgrowing Indian market, reflecting a WiMAX opportunity in emerging markets that has often been obscured in the United States by the prominence of Sprint Nextel Corp. and Clearwire Corp.’s plans for advanced services via a joint WiMAX offering.
Telsima’s contract wins include multi-year, $100 million-plus deals with Indian telecom operators Reliance Communications and Tata-VSNL India.
Telsima, based in Sunnyvale, Calif., has operations in Europe and India, but India is the focus of its efforts.
According to the company, the $100 million-plus contract with Reliance includes 10 Indian cities this year and another 190 cities between 2008 and 2009. With Tata-VSNL, 250 cities will be deployed by 2009, with 10 of them coming online this year.
Telsima said it will ship 10,000 WiMAX base stations and 100,000 subscriber stations this year. Burcak Beser, CTO of Telsima, said the company plans to announce additional WiMAX deployments in the coming months.
“We are trying to play a different role than Sprint, whose objective is . different than the emerging marketplace,” said Beser.
There is a large opportunity to increase broadband penetration in an information economy such as India’s, where there is a current penetration rate of only about 0.2%, or 2.5 million subscribers among a population of 1.2 billion, Beser said.
Wireless is the best way to provide broadband services, he added, because the existing infrastructure does not include sizeable cable deployments or a large network of phone lines, such as is available in the U.S. However, Beser noted, the Indian population is very price-sensitive.
“You can’t charge as much as in the U.S. or other places in the world,” he said, estimating that the price of wireless broadband service “cannot be more than $10 per month.”
Thus, the cost of deployment is a particularly critical element for operators. Beser said that companies looking to deploy WiMAX can seek out a fixed or nomadic solution or opt to use a mobile WiMAX product to provide fixed service-but they must absorb the additional overhead costs associated with having the mobile capability.
Telsima appealed to its large customers, he said, because it offers the full gamut of WiMAX possibilities and its equipment is forward-compatible-so an operator could move toward mobile with an incremental investment and not have to put additional money into mobile WiMAX upfront.
The venture-backed company is supported by investors including NewPath Ventures, CMEA Ventures, New Enterprise Associates and JAFCO Asia, and has about 250 employees in California, Slovenia and India.