Maravedis Interview with Lee Sparkman, President, Enforta

By Basharat H. Ashai, Market Analyst - Asia

Contact the author at Basharat@maravedis-bwa.com

Maravedis: What is the future of a technology like WiMAX in Russia?

I think the fixed WiMAX is going to continue to develop rapidly just because Russia as a country lacks alternative technology for broadband. But I believe mobile WiMAX services will take sometime to expand. The authorities have issued one test mobile WiMAX license to Synterra. There is no formal specification for mobile WiMAX equipment yet. The other real issue with Russia is the pricing points. The ARPU for broadband consumer, say in Moscow, is USD $18. The mobile WiMAX service today, particularly given the price of the equipment, is quite higher than what the consumers are willing to pay. The regulatory issues, pricing and availability of CPE will really slow down the mobile WiMAX. But mobile WiMAX is definitely going to be very successful in Russia in the long term just because of the nature of the Russian consumer. In our case we really do not see mobile WiMAX picking up in Russia until 2010.

Maravedis: Any other hurdles for mobile WiMAX in Russia?

There is no demand for mobility in Russia yet. It is mainly due to price points of mobile services. Russian consumers today are price sensitive and they are not buying laptops. They would rather just have a computer at home rather than a laptop. There are not very many mobile devices in Russia yet. Even Wi-Fi service has not achieved any major success in Russia. Golden Telecom has deployed a huge Wi-Fi network in Moscow. They have less than 60,000 subscribers. If Wi-Fi cannot make it as a service in Russia, one can really understand what challenges a technology like mobile WiMAX will face in Russia.

Maravedis: What are the various types of services that you currently offer over your WiMAX network?

We provide quite a lot of VPN services.VPN is very popular in Russia. We do not provide VoIP because Enforta is not a licensed long distance operator. Any voice that terminates offnet has to be terminated offnet through a licensed long distance operator. So what we do is we resell the long distance services of other companies to our subscriber base. For voice services we work with Rostelecom, Transtelecom and Golden Telecom.

Maravedis: How promising is an application like IPTV over WiMAX in Russia?

We need the mobile WiMAX because we need the unicast capability that is in 802.16e specification. We also need 20 MHz of spectrum dedicated for TV. IPTV over WiMAX is interesting. But cost is the barrier. The cost of a basic cable TV offering in Russia is USD$6 dollars a month.

Maravedis: What are Enforta’s plans for 2008?

Today we operate in 33 cities and we will be expanding to 65 cities by the end of the year 2008. So we will be covering another 32 cities by the end of 2008. We are also looking to penetrate into countries within the CIS region.

Maravedis: How much are you planning to invest in WiMAX by the end of year 2008?

The total investment in the network by the end of year 2008 will be in excess of USD$100 million dollars.

Maravedis: How many base stations do you expect to deploy by the end of year 2008?

Probably close to 1000 using Airspan, Alvarion and Infinet wireless.

Maravedis: What is Enforta’s strategy going forward?

We will consider the mobile WiMAX once we understand what the license requirements are going to be. Right now there are no mobile WiMAX licenses available in Russia. For now it would be inappropriate to begin to deploy mobile WiMAX in Russia.

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…. The complete version of the interview is available to WiMAXCounts™ subscribers only. The details include spectrum info, WiMAX subscriber numbers, subscriber split (residential & enterprise), ARPU, total base stations deployed along with breakdown by vendor and standard type, total CPEs deployed along with breakdown by vendor and standard type, competitive advantage, plus additional information.

For more information you can contact the author. Basharat@maravedis-bwa.com

Thursday, May 01, 2008 in Business  | Permalink |  Comments (0)