"We believe that Wimax is the only low-cost broadband alternative that could leapfrog emerging markets and enhance productivity benefitting the domestic economy," said Sudheer Kuppam, managing director for Intel Capital in India, Japan, Australasia and South East Asia.
"As always, we constantly seek investment opportunities to support our WiMaX strategy. Again, our investment managers engage with companies whom we believe might fit that strategy. Amidst these discussions, we're unable to provide specifics," he said.
It is reliably learnt that Intel will invest in two Indian firms offering specialised WiMax and conventional Wi-Fi products this year. Kuppam, however, declined to disclose any deal specifics, saying that within the technology sector, Intel Cap is "sector-agnostic, stage-agnostic and instrument-agnostic". However, he did not rule out making PIPE (Private Investment in Public Enterprise) deals in future in public companies.
On target companies which the Santa Clara-based chip giant has identified for this year, Kuppam said, "We don't control the deal pipeline, so it is not feasible to set definitive targets.
But companies with innovative technologies, sound management teams and viable financial models always fit in with our strategic objectives. They should also be targeting a large market segment with compelling value proposition."
Intel's $250-million Intel India Technology Fund was announced in 2006 and has invested strongly in the telecom and wireless applications space which includes companies such as Beceem, Hellosoft and Telsima. Intel recently announced that it would take minority stake in Malaysian WiMax company Green Packet Bhd by investing $15.4 million in Green Packet's parent company.
Intel has so far carried out over 280 fixed and mobile WiMAX trials and commercial deployments in 110 countries, according to reports.
The government plans to issue guidelines for WiMAX and 3G networks by June and allow foreign operators to bid for spectrum by January 2009, which is expected to broaden the mobile ecosystem and channel private equity funds to firms engaged in business in emergent telecom segments. An industry source added that Intel Cap would keenly watch the bidding process for potential investment targets.
WiMax holds potential as an effective last-mile solution for broadband operators to transmit data, voice and video at high speeds to PCs and mobile devices. Nevertheless, low broadband penetration at less than 4 million subscribers in India has been a key reason behind the government's lack of interest in rolling out WiMax services.
The potential to kickstart growth for WiMax and broadband firms will hinge on factors like the availability of frequency, interoperability in the predominant 2.5-3.5 Ghz band range, quantum of bandwidth to be auctioned by the government to 3G applicants, the degree of mobility permitted to the licensee and the timeline, sources added.
