sloka telecommunications pvt. ltd.: the wimax wave · went in to the system test, feature test, and...

This casestudy has been prepared by Prageet Aeron, Doctoral student at Indian Institute of

Management, Ahmedabad, under the guidance of Prof. Rekha Jain, Indian Institute of Management,

Ahmedabad for academic discussion only and does not represent appropriate or inappropriate handling

of a business situation.

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Sloka Telecommunications Pvt. Ltd.:

The WiMAX Wave

Founding of Sloka

In October 2004, Sujai Karampuri and Venkata Subbaiah laid the foundation of Sloka

Telecom Pvt. Ltd at Bangalore in India.

Background of the Founders

Sujai obtained his graduation in electronics and communication engineering from NIT,

Warangal in India. He received his masters in communication engineering from Michigan

Tech in USA and then joined Alcatel in US in 1996. At Alcatel he participated in various

activities involved in the product life cycle from design, manufacturing to finally testing

of the product. According to him:

―I went through the whole thing from the specifications of the product to the top level

design, detailed design, actual implementation of the product, coding, testing, and unit

testing. Then I opted for going beyond the design and development phase, my boss also

encouraged me to take that up and I moved in to the testing team for the same product. I

went in to the system test, feature test, and then overall integration. So I went through the

whole cycle till the customer delivery. I think that was a good experience because when

you are young you don't get to go through the entire experience at that age‖.

Sujai returned to India and joined Sasken Ltd in the year 2000 as a team leader of system

architecture team. The team was engaged in 3G related works mostly for Nortel

Networks. Until 2000, Sujai never wanted to be an entrepreneur, had no entrepreneurs as

role models or any such examples in his family. However, during his tenure as a

hardware architect for Sasken, Sujai regularly proposed new ideas and like most new

ideas some of them got accepted while others could not see the light of the day. As a part





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of putting up these new ideas Sujai was required to develop complete business plans with

projections of revenue, expenses etc. It was his stint at Sasken that was instrumental in

him looking to become an entrepreneur. According to him:

―I should be thankful to Sasken for that as they allowed a young person like me to carry

out those exercises. Joining Sasken was very good as it gave me an exposure about how

the Indian wireless market was shaping up and stuff like that. So I learnt a lot of things

especially what to do and what not to do‖.

Co-founder Venkata Subbaiah completed his graduation as well as post graduation in

electronics and communication engineering from S.V. University, Tirupati in India.

Subsequently, he joined Sasken in 1996 and stayed with Sasken till he co-founded Sloka

with Sujai in 2004. At Sasken he was a part of the team engaged in development projects

related to UMTS within the 3G group and was reporting to Sujai. It was here at Sasken

that Subbaiah came in contact with Sujai and over the time they developed a very cordial

professional relationship.

Motivation:

Global Telecom Equipment Market Scenario:

The global telecom equipment market beginning year 2000 was in midst of major

changes. The global market had always been dominated by a handful of top companies in

the past, that were fiercely self driven and no amount of outsourcing for components or

design was allowed. However with rising costs and a series of big investments which

could not translate into profits, they could no longer operate as they did in the past. The

top tier manufacturers could no longer continue to develop and maintain a complete





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range of all products, offer them at competitive prices and also keep adding features to

the well established but largely volume based products. Some of the examples of such

products include low speed optical networking equipment, small and medium base

stations (BS) etc. Even their huge R&D budgets were not sufficient to keep developing

the entire line of products. As a result the companies slowly opened up to component

manufacture outsourcing in different parts of the world where manufacturing was much

cheaper especially, China and Taiwan.

This led to the development of special Original Equipment Manufacturers (OEM)

relationship among the top tier companies and the vendors. This on one hand enabled the

big companies to focus their R&D effort on specific high value strategic products and on

the other hand enabled manufacturers to plug in to lucrative opportunity to sell their

produce to these top tier companies. The top tier companies would issue what are known

as Request for Proposal (RFP) and wait for companies which could fulfill the

requirements. The most important criteria for a manufacturer to be considered for

production by the big companies were the final price and the quality of the product. The

big companies were especially keen on the cost as that enables them to earn good

margins on the product. The big companies often helped the local manufacturers by

transferring technology and licensing some of their specific patents in the favour of

manufacturers. Thus the developing OEM relationships in the telecom equipment market

were symbiotic for both the top tier companies and the local manufacturers.





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Product Vs Services:

By 2004-05 Indian software industry had firmly established itself and was the leading

services industry in the world. Often comparisons were drawn between India and China

with India being called the hub for services and China the hub for manufacturing.

However none of the Indian companies were really known as product companies. Only a

small number had dared to step into this domain, the most prominent being Gururaj

Deshpande promoted Tejas Networks, which had carved a niche for itself in the optical

networking market.

Sujai, however strongly desisted ―services hub only‖ branding of India and felt that such

branding was below India’s actual potential. Other issue was the business model of

services industry, which Sujai felt was linear and based on adding more people to gain

scales and more billing. All the Indian software business put together added up to around

US$ 23 billion1 in 2004-05 and per employee maximum revenue of around US$ 15,000

to 20,000. This was lame in comparison to any leading technology firm like Nokia or

Motorola that could easily claim US$ 40-45 billion in revenues and more efficiently at

almost a million dollar per employee in revenues. The services industry model was

characterized by lower margins when compared with technology product companies and

they were also more human intensive further affecting the margins of such companies.

So, Sujai felt that one should be making technology product companies in order to rise up

the value chain and generate more wealth.

1 From NASSCOM Strategic Review 2007





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Getting Started:

Both Sujai and Subbaiah were working on projects for Nortel, France and shared a

wonderful working relationship with the Nortel people. Around early 2004 Nortel offered

a project for the development of a small 3G based Base Station (BS) but this did not

interest Sasken given their exiting engagements. However, Sujai was sure of the

feasibility of the project and was convinced that it could be developed. He created a

business plan and talked to a few VC’s and investors. Once Sujai was convinced that he

could raise money, he along with like minded members quit Sasken. This triggered the

founding of Sloka Telecom. Apart from Sujai and Subbaiah who became CEO and CTO

respectively they were joined by several other engineering graduates over a period of one

year who carried with them experience of three to four years in areas of software

development, hardware interfacing and testing for the development of various telecom

related products. According to Subbaiah:

―All the team members who constituted Sloka were extremely knowledgeable about the

telecom domain as they had worked in various capacities for leading tier-I firms like

Alcatel etc. before they joined Sloka. The team was well aware of the architecture of the

BS and had prior experience in the areas of protocol/stack development as well as testing

of products‖.

The common motivation behind coming together to take the venture forward was an urge

to create a product and be a part of the complete development cycle of creating a product.

Although all the members of Sloka team had worked for different tier-I firms but they

had mostly remained confined to their job descriptions and at times did not even know

how their modules were going to be used. According to Madhava who joined Sloka a

year later in 2005:





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―Basically my purpose of joining Sloka was to work on a product. In my previous

company there were things that we could not try out by ourselves, somebody used to give

us instructions and we did things never realizing why we did those things‖.

However, with Sloka, things were different and the very people who had been engaged

only in coding or following instruction in their prior jobs now had the opportunity to

design the product and take it to the market.

Choice of Location:

Sujai and most of the team members who joined Sloka had already worked in Bangalore

and felt that it was the best place to start the kind of company they wanted. Sujai knew

that in Bangalore he would have ready access to engineers with the kind of experience

that Sloka wanted. Bangalore, due to availability of quality opportunities, harbours loads

of engineers coming back from US, UK and other places, and these are people with the

right kind of expertise in the domain. Moreover, there was already a lot of expertise

available in Bangalore especially with respect to hardware manufacturing. Additionally,

well known VC’s regularly visit Bangalore to meet the start-ups, so entrepreneurs can get

a chance to meet them and raise money for their ventures. All well known technology

companies like Motorola, Intel, TI and Dell, several wireless companies and chipset

companies have their offices in Bangalore.

Lastly, the entrepreneurial environment in Bangalore is extremely supportive and the city

has a large start-up community. Bangalore also boasts of a very active network among

the various entrepreneurs such as open coffee club, business gyan, TIE and many others.

There are regular events showcasing and promoting entrepreneurs such as start-up





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Saturday, mobile Monday etc. So, all in all Bangalore was very important for Sloka’s

plan of growth and product development.

First Activities:

Sloka began its operations from a rented apartment in Bangalore. The first set of desktops

acquired were family owned PC’s of the founding team. Once Sloka was established,

Sujai contacted a chartered accountant and got the company registered at the registrar’s

office of Karnataka. Sujai also bought the domain name slokatelecom.com and created a

temporary website.

They also got a non-disclosure agreement in place with Nortel networks. Sloka team

stated exchanging information with Nortel from the first day, there was a lot of support

and encouragement from Nortel and that gave Sujai and his team a lot of confidence that

they are working with a very big company, so they also were credible players. They also

made company brochures advertising the kind of work they were doing and the product

3G/UMTS small BS that they wanted to make. They attended some international

conferences like the 3GSM conference to exchange ideas, meet potential customers,

suppliers as well as get a feeling of where they were in the product space. The idea was

also to let the people know that they were present in the market.





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Initial Opportunity

Sujai felt that it was a great opportunity for them if they develop the 3G/ UMTS BS and

sell it to Nortel. So the team set its sight on the development of the same.

Seed Investment:

Initially there were a few investors who had showed a lot of interest in Sloka and so Sujai

was confident that they would be able to raise enough money. One investor was

particularly willing to put in money but a minute examination of the clauses set forth by

the investor led Sujai to give up the proposed investment as it was not in the long term

interest of Sloka and its employees and there was a possibility of them loosing all the

equity to the investor.

But Sloka was in dire need of funds to carry out its development work. So, Sujai arranged

for personal loan and slowly availed as much loan as was possible. However, a few

months passed and nothing could be worked out. This led to a peculiar ―chicken and egg‖

situation. As there was no upfront investment in the company potential employees were

not willing to join Sloka and due to lack of people development work was suffering,

leading to a delay in the introduction of product prototype which was further putting

away the potential investors. According to Sujai:

―I think that recruiting people was the greatest challenge for me at that point of time‖.





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Finally some fresh graduates who were looking for opportunity in Bangalore where they

could get some experience joined them. Most of these new recruits included those who

Sujai and his team members knew through families and friends. At this point it was

imperative for Sujai to get funding but most VC’s in India either did not understand their

work or were not forthcoming enough with terms and conditions favourable for Sloka in

the long term. Up against the wall Sujai turned to his family and family friends for

financial help. In his own words:

―I went back to my family, my dad sold his land, my uncle sold his apartment, and my

brother gave me his entire savings…What helped in those days was that my family came

forward and with blind faith they just supported whatever we were doing and I think we

kept the ship going at that point of time‖.

Within about a year’s time, around October 2005 they were able to develop the product.

Sloka even qualified among the final four vendors chosen by Nortel to supply the

3G/UMTS BS with the likes of LG, Panasonic and Samsung which were all big names in

this domain. This itself was a big boost for a small Indian company and gave a lot of

confidence to Sujai and entire team at Sloka. However, Nortel had not promised anything

and there were enough indications from them that the deal with Sloka may not

materialize. Sujai had realized this fact and so he visited several investors based in both

US and India to solicit funds for further development but Sloka could get no funding

from VC’s. However, during his numerous interactions with VC’s Sujai was again and

again prodded by investors based in US to go in for WiMAX based products.





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Second Innings with WiMAX

Reasons for WiMAX:

Although WiMAX was there on Sloka’s agenda for the future but the interaction with

VC’s further strengthened this idea. Sujai and other team members decided that sole

dependence on 3G based projects was not in the in the long term interest of Sloka. The

problem with 3G technologies was that there are so many components that one company

cannot develop everything and whatever one does develop one has to be affiliated with

the likes of Nokia, Ericsson, Motorola etc. to be able to sell it to them. Another

realization was that it was very tough to get in to a cellular market because most of the

cellular operators are big and the cellular operators prefer to buy from the big tier-I

vendors. It is very tough for a tier-II or tier-III vendor to sell directly to a cellular

operator.

WiMAX on the other hand was a greenfield deployment. The equations were not skewed

like in cellular market, there could be extremely small wireless operator, and there could

be extremely big wireless operators in a business model like WiMAX, especially fixed

WiMAX. Fixed WiMAX operated in the unlicensed spectrum zone and did not require

huge sums to get a share of the spectrum. The requirement was a BS and depending upon

the power that the BS could emit, the number of subscribers would be decided, who

would each hold a Customer Premise Equipment (CPE). Only problem was the

interference due to public goods like nature of unlicensed spectrum which needed to be

controlled by various innovative methods like dynamic hopping for frequency.





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Even small operators could set up their small networks to provide Internet services using

WiMAX. That meant that if one could take risk there was high probability that one could

sell his product. The other important thing was Sujai’s belief that India needed broadband

Internet connectivity and there was a pent up demand which had not been satisfied. In

case of WiMAX unlike 3G, one could develop an application on one’s own and the

developed product could directly be sold to the operators. There existed no dependency

on any external vendor mandating any affiliation to them. So this led to a change in basic

strategy of Sloka and they finally decided to venture in to a totally new but promising

space the ―WiMAX‖.

Regulatory Issues:

When Sloka got started, Indian Government had no clear policy about WiMAX licenses

or the 3G licenses but there were enough indications that a policy would be in place soon.

By the time WiMAX related development was being contemplated in Sloka, Government

had already announced the tentative WiMAX policy and its spectrum (Exhibit-4). So, this

gave enough confidence to the Sloka team that they would soon have a market in India.

Initial Turmoil:

At this time prevailing atmosphere inside Sloka was not healthy, there were a few

individuals that were quite resistant to every decision or proposal being suggested by

Sujai. This was also the time when he resisted being pressurized by a group of employees

for equity related issues and brought in open the deliberations in front of the entire Sloka





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family for them to understand and decide on the future course of action. Because

everything was brought out, there were a few exits as the entire Sloka team decided and

came out against these people.

Another tumultuous debate during this time was related to shift into services. As the

investment was not forthcoming team members were getting desperate and wanted to

shift into services, take up work which incidentally they were being offered with a view

that they would shift into product when they were well off as a company. But Sujai put

his foot down strongly knowing very well that once the core people are put in to services

mode it is very difficult to pull them out and that may actually mean end of product for

ever. This was not something he wanted Sloka to do a few years hence, and it was

certainly not why they had started Sloka. He was ready to close Sloka rather than go with

the services model as he did not find it challenging or motivating enough. Finally team

saw his point and stuck to their task.

New Opportunity Recognition:

The one year that they spent in the industry equipped the Sloka team with a lot more

intricate knowledge about the Indian wireless market. In Sujai’s words:

―That one year gave us enough inputs on how the market is shaping, how the equations

are formed, whom to sell to and how you can sell to, how can you enter this space and so

on‖.

But entering WiMAX was easier said then done. Sujai and team had to analyze what is it

that they could do well within WiMAX and how they could go about and whom to target.

After a lot of introspection Sujai and his team decided that they understood wireless





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technology and it is the Radio Access Network (RAN) side that they could do really well.

But RAN has multiple dimensions to it like core network, BS, CPE etc. They knew that

they could develop only the BS and they could not go in for the CPE development or the

mobile handset development because neither they could compete with Taiwan and China

on the cost of mobile handset nor could they generate the same volumes for the CPE

market as the Asian giants. So they decided to focus only on the small BS.

Learning WiMAX:

The next important issue was to acquire knowledge about WiMAX standards and

protocols without which no development could proceed. Sloka team was composed of all

experienced engineers who had worked on existing 3G technologies like GSM, GPRS,

UMTS, and each time they moved from one to another development work posed a

completely new challenge. Although the top level architecture may be similar but the

underlying algorithms etc. are all different. So, taking on a new standard did not bother

the team as they had done that before.

But this knowledge could not be acquired from any academic institute or research

institute in India at that time as none offered any courses or material related to WiMAX.

Sloka team had to search for the relevant documents themselves. They got the IEEE

documents where they could study the standards. Apart from IEEE documents several

other references on the Internet were dug up, and a team at Sloka comprising Subbaiah,

Madhava, and Krishnan went through all the documents, which was really helpful in

enhancing their understanding of the WiMAX. However, reading and understanding the





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standard documents is one thing and to bring it in to a real implementation is quite

another. According to Madhava:

―Reading the standard was helpful in a way to understand how the protocol works and

how the things should be done but finally you need to apply your experience in those

things, which we applied from the starting‖.

Structure of the Development Team:

Having worked with top tier firms all the core team members were well aware of the

structure of the development teams in such companies. Such companies usually have

development teams with strength of 300 to 400 while Sloka had a total strength of 30

members. The reason such companies have huge teams is because they have very

stringent processes to be followed in order to ensure highest quality. Also since their

development is pretty spread across different locations so they need to follow such

processes to be able to communicate better. But on the flip side this leads to high costs.

Moreover only 10-20% of the team actually is involved in high level design and then they

pass on the work to lower level. This is what Sloka team sought to eliminate. They had a

core team consisting of 5-10 members who were involved in design as well as coding and

rest members were all followers who could do the jobs as was instructed (Exhibit-1). So,

the founding team played the role of anchors and the rest of the team formed followers.

Another very important characteristic of the Sloka development team was their

versatility. According to Madhava:

―We were a small team working on very specialized product, we had a lot of experience

behind us but the idea is that team is small and so you need to do multiple things‖.





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Development of Prototype:

Finally, the decision was to develop a cost effective WiMAX based BS. The team began

by deciding upon the specifications of the BS. The basic requirements of a small BS are

quite different from large BS both in terms of area to be covered and the robustness of the

BS. A conventional large BS caters to an area of 40 sq Km whereas the small BS was

targeting an area of around 3 sq Km. The specifications of the BS in terms of capacity

were decided by looking at the market as well as the government regulation stipulating a

power output of no more than 29 dBm from any BS apart from other general WiMAX

compliance guidelines. So, initially it was decided that one BS should be able to support

about 10-15 subscribers and be as compact as it was possible to achieve.

The question of how to go about with development came next. There were two main

strategies that could have been adopted, one was akin to the one followed by tier-I

companies wherein each and every component is developed by the company right from

the scratch i.e. radio frequency controller portion, network element etc. However, this

would have required huge investment to recruit an entire team of professional and a lot of

equipment as well. Also the time required for such a scale of development work could be

quite high. The other approach was to be able to use the already available components

available for free (software) or even commercially (software as well as hardware) and

then further build the system over and above it to create a product in shortest possible

time. This process would not only bring down the expenditure required in R&D but also





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time required for development would come down drastically. So, the latter approach was

accepted as the design philosophy for the product development.

Partnership with Wavesat:

Once the specifications were discussed and finalized the BS content was broken down in

to hardware, software and testing effort. Initially more focus was given to hardware as

most team members had much more exposure on the software side and were confident in

that domain. On the hardware side there was the analogue portion, base band portion and

the RF portion. With low cost at the heart of entire development it was amply clear to the

team that a cost effective BS could only come from ASIC2. Although ASIC loosens one’s

grip on the configuration but it comes much cheaper as compared to developing

everything from the scratch and they did not have the time or resources to develop the

base band. So, they started scouting for the chipset vendors. After having reviewed the

price bands of several players in the chipset space, Sloka finally decided to team up with

Wavesat3, a Canada based semiconductor manufacturer. Wavesat was very active in the

chipset space especially equipment related to WiMAX and had its own solution chipset

for the CPE.

However, Wavesat license too required a lot of money and Sloka at that point of time did

not have that much money. But fortunately at this time one of family friends who was an

investment banker stepped forward and after due diligence he invested in Sloka in his

personal capacity. Using this money Sloka was able to get license from Wavesat and this

2 Application Specific Integrated Circuit 3 http://www.wavesat.com/en/about-wavesat.html





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marked the beginning of development process for WiMAX. Once Sloka got the license,

they also got some reference design documents from Wavesat, which gave a lot more

information that provided them a lot of guidance, on the way forward and how they could

carry the development further. The decision of teaming up with Wavesat was a very good

one for Sloka as it laid the very foundation of their product strategy. Although Wavesat

was a very big company but it took Sloka very seriously and every time they visited India

they made it a point to visit Sloka and spent lot of time with the Sloka team engaged in

development. Speaking about partnership with Wavesat Sujai says:

―They always supported us, encouraged us, always promoted us, our products, in

different forums they made introductions to customers. They were one of the biggest

champions that we had got in the WiMAX space. And since they had far reaching hands

they were much more tuned in to the WiMAX world their support helped us. So, we are

quite indebted to them from that perspective‖.

Product Strategy:

As was already realized by the team at Sloka there was indeed difference between the

large BS and small BS and given the difference the signal to be received by BS from an

area of 3 sq Km or less was much cleaner than the conventional BS. So chipsets being

used in the small base stations did not need to be as robust as the ones required in

conventional large base stations. Even marginally lower quality of chipsets could be used

and they could provide same quality under the given conditions. The idea was to use the

chipset used by Wavesat for making CPE for making the BS. As the CPE volumes were

expected to be very high this would enable economies of scale in the manufacture of the

particular chipset which would significantly bring down the cost of BS. Moreover, they

could use the Wavesat CPE for their own solution as well.





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The general belief among the technology experts was that the CPE chipset could not be

used for the purpose of BS. However, the Sloka team did not share this view. On

analyzing the CPE they found that there were certain parts which could function even in

the BS and some parts which were required to be rewritten. Sloka team was planning to

develop software defined BS (SDBS4) which would allow user to have a soft and smooth

upgrade. So, when one moves from one feature to next feature, instead of changing the

hardware one can simply reprogram the software and it becomes ready for the future. So,

this would translate in to a very cost effective BS as recurrent expenditure on hardware

could be avoided.

It was also decided that BS being developed was to be put on the tower to cater to a fixed

area (Exhibit-2). But to be put on the tower the form factor of the BS was very important

because if it had to be put on the tower one cannot have a BS that is 20 kg in weight or 40

kg in weight. Such BS was not available in the Indian market but companies like

Alvarion (Israel based WiMAX company) and Telsima (US based WiMAX company)

had already brought out their products in similar category that weighed around 4-5 kg.

The other products that these companies were offering differed in their power output and

thereby were targeted at very densely populated networks and less dense networks. Sloka

team saw an opportunity for developing such a compact BS for India and they set a target

for them to develop a BS weighing not more than 3 Kg with differing power outputs to

meet the urban and rural (less dense networks) needs.

4 Patent Pending





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Development Cycle:

Once the chipset was finalized, the team made aware of the platform to be used and the

requirements agreed upon, the team set to work with the aim of developing a quick

working prototype in the shortest possible time. Apart from the chipset vendors they also

took decisions regarding controllers, PCB’s etc and began search for various vendors to

source the components of the BS. Most of the team was highly experienced and well

aware of the components involved in BS at least on a high level as well as some of them

were aware of the lower level issues related to the intricacies of BS as well. However, the

development work was itself a learning process and since no one could guide the

development the technical team regularly engaged in discussions and meetings among

themselves, chalking out a direction and trying to realize the product that was envisaged.

The criteria for choosing the various components included cost of the component,

capacity and performance for the end application, ready availability, stability of the

supplier, roadmap of the company and effort required in the usage of the component with

in the product.

On the software front the team was much more knowledgeable. They began with some

high level design analysis and then they began to code. With their prior experience they

had an idea about what should be where and the sequence of activities required. Apart

from the baseband which was provided by Wavesat rest of the MAC which was like the

heart of the BS was developed by Sloka. They developed the complete protocol stack and

the necessary drivers for it as well. From software perspective BS network element and

Subscriber Station (SS) network element (same as CPE) were developed as two different





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softwares running on different modules and subsystems, they were integrated together to

enable the communication between the two elements through the established protocol

stack.

On the hardware front things were more difficult. They had to make their own PCB

designs and had to do prototyping as well. They actually went through the whole

hardware manufacturing cycle wherein they designed, did the schematics, generated the

gerber files, procured several components, gave it for PCB manufacturing, got it

assembled and also did a lot of testing. For PCB manufacturing Sloka team scouted

around Bangalore which has an active hardware development industry around it. They

got boards developed by several vendors in order to assess the right mix of good quality

manufacturing, timely delivery and proximity. Proximity was essential for PCB

development because it was an iterative process and involved a lot of interaction with the

manufacturer. Finally they zeroed on 1-2 manufacturers for their work. RF design gave a

lot of trouble to Sloka team and in order to solve the issues related to RF they signed a

Memorandum of Understanding (MoU) with certain contractors, who acted as external

consultants in the work and were paid accordingly. Finally they developed the necessary

hardware including the RF power amplifier.

But the entire development cycle was constantly disrupted due to the lack of resources.

There was never enough money to actually last the complete development cycle. Sujai

had to constantly prioritize and since the salary of employees and other such expenditure

became very important so equipment had to wait. One such example was that of

oscilloscope. Although not very costly equipment but when it was required, entire work





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had to be stopped as there was no way to find out the nature of output signal generated.

This led to a lot of delay in the development. Same was true for other testing equipment

such as signal generator, spectrum analyzer etc. which are extremely critical in the

development phase. According to Subbaiah:

―I strongly feel that if you want to develop a great product one thing that is important is

to have infrastructure and should be available all the time to you. If it is not available you

have to stop there is no other work‖.

To circumvent the lack of testing equipment Sloka team used some of the facilities of

SAMEER (Government funded lab) on a payment basis. The reason was to be able to use

the costly equipment for analyzing the output of the product and conformance testing.

Prototype Developed:

The first prototype was completed in about eight months and it was an network

processor based solution with a PC attached to it. The first solution was more of a proof

of concept rather than the final product. For the demonstration arranged for their

prototype the development team made a call on the wireless network and made PC talk to

it as it was the most easily available platform. So CPE could communicate with the BS

when one made a call. After this Sloka even arranged a demonstration of their prototype

for Motorola wherein they made a call and they transmitted a movie recording over the

wireless.

From their experience Sloka team knew that they would need a network management

system to fully realize the potential of the BS and make it marketable and acceptable

among the users. So, they decided to involve a team of youngsters, who were eager to





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learn and so were given access to the development environment. They started the

development work but soon Sloka team realized that it was too important a component to

be left to a third party. Subbaiah then took a call and decided to incorporate the

development of NMS and billing modules as an integral pat of the BS software

development. NMS team was headed by Madhava, however another problem related to

NMS development team was the absence of a team leader. A mediating project leader

who could translate the requirements in to different modules for the team was missing

and this had to be taken up by Madhava. But this was very time consuming exercise as it

was difficult for the naïve development team to understand Madhava’s ideas. As the

development work proceeded search was launched for such a project lead and finally in

late 2006 they got a team leader and this made the work more efficient.

Going to Market

Development of the Final Product:

However, the prototype was very far removed from the final product. There were several

other issues before it could be made in to a marketable product. Two important

parameters that separate a prototype from the final product are robustness and level of

optimization. Next phase for Sloka was to make the product robust, make it failure

resistant and to make it run optimally by ensuring minimum resource usage. Additionally

it had to have at least the minimum features to be able to sell and compete in the market.

They had to concentrate on each module at a time. Whenever they felt some robustness is





23

required they started working on that and then they started optimizing it however

whenever they started optimizing it robustness of the product suffered. So, they had to

decide on this tradeoff as well as which module takes preference over the others. Initially

when Sloka started testing they saw that software was running for some 2-3 hours and

then it used to crash. Finally this was sorted and it emerged that some basic thing like

certain failure case had not been handled properly, more related to the debugging part,

but it took massive effort from the Sloka team.

From software perspective external interfaces such as the one for NMS were very

important as they are the ones that actually connect one to the external world, so it needs

to be very robust and this requires a lot of cleaning of the code and that’s where Sloka

started putting in more of effort. The interface was a troublesome issue and time and

again it gave problems because Sloka team did a lot of changes from the prototype phase

and each time when they made a change they had to make changes somewhere else as

well. This led to a lot of mismatch and to integrate all this was very time consuming. So,

in the final product interfaces were finally straightened up, GUI was made user friendly

and a lot of features were added to the product such as support for classifiers, billing

modules etc. In the whole process Sloka team developed efficient software algorithms

which allowed them to program a low end microprocessor. Further many new ideas were

generated and people were asked to work on them for newer versions.

Although the product was functionally in a ready state but Sloka team realized that it had

to be packaged in an appropriate way. Since the BS was to be placed outdoors on a tower





24

it needed a weather proof enclosure to take care of the internal electronics. The choice of

material for the outer casing as well as the design of the casing was of paramount

importance for the overall product to function. This was more a problem of mechanical

design rather than hardware or software but at Sloka no one was an expert in mechanical

design.

They set down, discussed the problem and finally decided to invest money in enclosure

development. They searched for vendors who could take up the design work, located

three different vendors based in Taiwan, Bangalore (India) and Coimbatore (India). After

interacting with all the vendors and ascertaining the quality of the work, they approved of

the Bangalore based vendor. Bangalore based vendor had the advantage of proximity to

Sloka and so instant order placement and corresponding delivery could be expected at

times of need.

Finally Sloka team able to come up with two configurations of products one weighing 5

Kg and the other weighing less than 2 Kg to suit the needs of differing network density

based requirement (Exhibit-3). Both the products could be fitted with any type of

antennae using specific type (female type N) of connectors.

First Customers:

Sloka’s first customer was a Canadian company called EION. EION was looking for a

technology partner, basically they wanted to collaborate or acquire the technology, so that

they could use it to go to the market and sell WiMAX equipment. EION came to know of

Sloka through Sloka’s chipset partner Wavesat who recommended Sloka for their





25

product. Initially they wanted Sloka to merge with them or acquire Sloka but Sujai was

not very keen on that option. Sujai made it clear that they would like to pursue another

option wherein Sloka sells the equipment to EION either directly or EION could license

Sloka’s technology so that they could use it to go to the market. In the licensing model

the IP will still be with Sloka but the margin that one could earn was lesser in such a

model as compared to complete sale. Finally they decided on the licensing model and

concluded the agreement in May, 2007 and Sloka got their payments by July, 2007.

EION wanted to do a trial of Sloka’s product so they were sold around 20 BS for the

purpose. So, that was the first sale and also the first licensing agreement. Once Sloka

signed up they started to give EION the technology that they needed so that they could

start manufacturing and then they could go to the market. Fortunately for Sloka, this was

also the time when Sloka needed to raise some money again for continuing its operations.

Second customer was Supernet Technologies (a RT Networx Company), which is a

Wireless broadband solutions company, developing technology to deploy networks for

broadband wireless communications over the Internet-from the first leap to the last mile.

They took Sloka’s equipment and then won the bid for network deployment in a French

town Saint Medard en Jalles. This deployment took place in November 2007 and was the

first WiMAX BS deployment in France. Another customer was on the horizon with talks

having reached advanced stage with a company in Indonesia. This customer too was

informed about Sloka by Sloka’s chipset partner Wavesat.

Licensing Issues:





26

Although Sloka had agreed to the licensing model for its customer but initially they were

not sure of how to actually go about it. Sloka team understood that giving the source code

to the customers was not a feasible and it was to be avoided. But given the nature of the

product and its need for interfacing there were several portions of the code that had to be

opened up otherwise customer would not able to integrate those with their systems.

Sujai spoke to a few friends in the IT industry and they gave some initial inputs. Second

Sloka team studied some of the top Indian companies to understand how they went about

doing licensing, i.e. what is it that they offer and the approximate pricing of their product.

Armed with this knowledge Sloka team was able to figure out the process. There were

non-critical portions of the BS as well as certain interfacing codes that Sloka gave them

as a code but there were critical elements that actually defined the BS, so that remained

closed.

Marketing Activities:

Marketing activities at Sloka were handled by Sujai alone right from the beginning.

Initially Sloka team was focused on a development process that was internally driven and

actual interaction with the market, and actual customers was minimal. Although Sujai

talked to several telecom operators and ISP providers about the product Sloka’s

customers actually approached Sloka instead of other way around. After making its first

sale Sloka became more proactive in scouting for customers. With increase in the

marketing related activities team was expanded and Clifford Joseph joined Sloka to assist

Sujai in marketing department in early 2008. Clifford had prior technical experience with





27

a leading Indian IT company and he was also involved in marketing activities in his

subsequent job for a leading telecom company based in London. The immediate benefit

of his joining was that Sujai could now concentrate more on conceptualization of

marketing activities and financing of Sloka. Sloka team over time became more customer

centric and learned to go out of way to satisfy the customer requirements. For instance,

Sloka even started shipping the trial units to customers free of cost to see if they have

some interest and then sometimes work with them closely. The following statement by

Sujai sums up the evolution of marketing in Sloka;

―We are a now bit more sensitive to the customer requirements, long ago we were cut off

from the customers because we were developing in our own little office where the

customer doesn't come in and we don't know how exactly the customer in the field will

take it but off late we are directly in touch with the customers. On regular basis we get

ideas about where we are going wrong, what features he needs more urgently, what he

needs a little late, so we talk to him, bargain with him. So I think we are more and more

becoming a company of product engineering, taking marketing requirements in to the

product development.‖

Promotional Activities:

Sloka started advertising right from the beginning in the sense that they made a website

to enable interested parties to reach them and also put up their proposed BS and its

features on the web site. They also made brochures in the first three four months, with

pictures of the BS in the 3D modeling tools and some features. Then they attended a

3GPP conference and distributed the brochures and interacted with the people in the

conference. The purpose of attending such a conference at this time was two fold, firstly

Sloka wanted to let people know that they had arrived on the scene and secondly they

wanted to see the response of the people in the conference to such as a product. So above





28

activities were more towards making the company visible among the right audience and

get their ideas legitimized and ratified by associating with the leading technology forums.

Sujai also attended several bar camps and forums, where he talked about activities of

Sloka. This not only enabled visibility among peers but also built a positive image in

terms of recognition for Sloka which may lead to a favourable impact on the VC’s who

are in close touch with start-ups communities. Over the years Sloka team also started

actively participating in certain forums; like WiMAX forum in Asia and the US.

Positioning:

During the early days Sloka team was not clear about how to position its product.

However, slowly they realized that it was very difficult to break in to the large telecom or

Internet service provider market as large firms preferred to buy from big 3 or 4 vendors in

the international telecom space. The primary customers for their product were small

telecom service providers or small Internet service providers who could deploy small

networks to offer WiMAX based Internet services. Since the spectrum they were using

was unlicensed, small operators could at a very low investment set up such networks.

These networks could provide broadband services to remote places or connectivity

between two establishments of a firm with in the city or even inter firm connectivity at

very low investment, complete with billing services (for small ISPs) and network

management services.

Market Information Acquisition and Customer Service:





29

For keeping a watch on the market, Sloka team resorted to varied means such as sector

reports, participating in various technical and entrepreneurial forums, and kept them

updated via news items and various web portals. After having made the final product and

having completed the sale, Sloka proactively set out to receive the feedback to further

work upon its product in an incremental manner. Sloka was regularly involved in

conducting interviews with its customers and operators to understand the direction of the

market and to better understand the product that the customers desired.

In terms of customer service and support, although Sloka did not create a separate

division for the same, they worked closely during the installation phase for their

customers to enable the engineering team of the customer to develop an understanding of

Sloka’s product. Teams of engineers from Sloka regularly visited the customers during

installation phase and even afterwards for problem diagnosis and solution. The

relationship between Sloka and its customers has been based on a high degree of trust and

this has led to very good interaction with the customers. They have been forthcoming

with their problems enabling Sloka to constantly improve their product, but the flip side

has been that the new development work has suffered. Given the limited resources, small

team and small customer base, all the complaints have to be taken care off by the same

team and this has hampered the furthering of original development work planed by Sloka.

Customers actually put the product through much more rigorous testing then Sloka team

with their limited resources could do and then they came back to the Sloka development

team to request for fixes or enhancements. For instance one of Sloka’s customers had an





30

excellent testing team and their criterion was that the instrument should not crash even

after 15 days of continuous operation. They required that there should be no drop in

service level and the system had to be stable for 15 days. So it was a huge challenge for

Sloka team and they had to clean a lot of the portions to make sure it did not go down

which finally they did it although it took a lot of time. Another instance was related to the

development of GUI for the BS. Sloka team thought they would put up an NMS and they

started doing the GUI for the NMS but customers also wanted some GUI for the BS

itself. Initially it was not planned but after getting this input it was incorporated in to the

product. The result was a much more robust and user friendly product.

Pricing:

Sloka had no prior idea about pricing related issues. Hardware cost was a tangible

component for Sloka. However, since the cost component of their product included

software it was very difficult to put a cost to the entire product. To sell their product

under licensing model they learned the basic licensing issues from their contacts in the IT

industry and also the approximate pricing of it. At the same time Sloka also realized that

their solution was much more sophisticated than most IT companies. So, they decided

upon a pricing strategy based on their market perception and the value they thought they

were adding to the consumer’s product. They decided on a multiplying factor from their

gut feel over and above the pricing that was calculated using the IT company pricing

model that they learnt.





31

Technology Standards and IPR:

The BS had to go to the field and interact with several other components and so Sloka

development work was with in the accepted standards set up under WiMAX. The reasons

being firstly proprietary standards are not cost effective as neither do they have ready

made ecosystem nor can they pick up the volumes which are possible for well accepted

standards across the world, an example being the ubiquitous GSM phones. The low cost

of the phone is because of the volumes it has generated. Secondly there is enough scope

for innovation and development with in the standards such as better algorithms for

routing, better power management and so on. So for a product to be innovative it need not

be a proprietary one. In fact highly successful innovations by big tier-I firms have been

within GSM standards but with much enhanced features.

Mr. Arvind who joined Sloka in January, 2008 as a Project Manager, was the person

responsible for IPR filing and follow up. Sloka filed for an international patent for

software defined BS. In the IPR that Sloka has developed, the software runs on an

extremely low power consuming microprocessor therefore the cost of the running is low

and also the size is small, so compactness with low energy footprint is being achieved.

Sloka has set the process for patenting in place but it is a time taking and cumbersome

process and they had not done it before. They applied through the World Intellectual

Property Organization’s (WIPO5) Patent Cooperation Treaty (PCT) path which enables

5 See for more details http://www.wipo.int/portal/index.html.en





32

patenting in several countries at the same time. Also because cost is involved in the

process so Sloka initially was intent on only going in for US and Indian patent. Sloka had

several others patentable products/technologies in pipeline but they wanted first this

patent to push through and use this experience to get more patents in the future.

The motivation behind the patents was threefold, first was the valuation of the company,

as VC’s and other players in the market look at patent as an important criteria for

valuation. Secondly, it differentiates Sloka’s product from others and prevents them from

copying their techniques. Lastly, at the time of selling their products to the customers,

Sloka can tell them that they have a patent for the same and so this adds credibility in the

customers perception about the organization, quality of the product and people they are

dealing with.

Routinization and Formalization:

Technological Routines:

As has been already mentioned team had a strong software background and so they were

a lot more confident about the software related development activities. They had a fair

idea about development time, the pitfalls, etc and being aware of the best processes in

existence in software, they simply inherited several relevant processes. However, since

hardware faced much greater problems a few routines based on learning by doing were

established. Sloka production ran in to long cycles and many times the whole project got

delayed because of hardware cycles. The hardware development team was always





33

working in a serial mode, with only one cycle at a time, only when it failed then another

cycle was taken up and that used to take up a lot of time. At times there were some

unforeseen errors that would crop up in the hardware cycle so they had to redo the whole

thing. As a result one of the routines, Sloka team developed was that they realized the

need to start with at least 3-4 designs parallely and the execution of all of them would

happen simultaneously. As a result hardware cycle time got reduced and even if

something did happen to the first two designs others could still succeed.

On the software side, Sloka decided on a release cycle of 8 weeks, so every 8 weeks they

would be having a release of a newer version. At the beginning of each cycle they lay

down a specific number of tasks to be completed during the period dependent upon the

available resources. But most of the times it could not be done because of either

incomplete analysis of the task by the team or unforeseen issues. To solve these issues a

routine was formed where in complete analysis of each task by team members was made

mandatory and the team reserved 60% of time for the specified tasks and the remaining

for catering to the delays and other intrusions in to the plan so that the schedule was not

encroached upon.

Another very interesting routine was implemented on the software side and was known as

the version control. Every change developers make in the software is captured and

documented, so that the system captures what were the changes before and what were the

changes that a developer added to the product. For example, if someone made certain

change say, 945, between 944 and 945 all files that have been changed, deleted, modified

etc. can be viewed. In the early days if the company wanted to release something to a





34

customer there was no process. The latest version was taken up and if the testing was fine

they released it to the customer. But if after three days another customer came and

reported a bug, the team took up the latest version on offer and tried to fix the problem

and released it as soon as possible. But since in three days Sloka could not complete

testing, quality of software was not guaranteed. However, as a matter of best practice

every time a release is made one has to test the product fully and a lot of testing time is

required for that. So either one has to compromise on testing or one will have to make the

customer wait for the product and one of the two had been happening at Sloka for a long

time. Testing team was always working on the latest and unstable version which was not

a good practice and it also stopped other ongoing development as developer could not

implement latest changes and has to wait for the release to be over.

In order to overcome this problem Mr. Arvind persuaded Sloka to adopt a version control

method. It has a tree structure with trunk and branches, the trunk is basic code and is

always there but outside the trunk one has to start a branch when one wants to make a

release. So development team can proceed on development without any hindrance

whereas the release team can continue to test the product fully, validate it, and verify it.

Another advantage is that unnecessary features which are not required by the customer

are not being released to them.

Administrative Routines:

Another instance of a problem leading to the formation of a routine was related to

network administration within the company. The development process begins with





35

loading BS and the SS on existing systems. Most machines are configured with a certain

default Internet Protocol (IP) address. One of the machines was configured as a BS with

certain IP address (say 192.168.1.50). Unfortunately, another person in the company was

also using same IP address (192.168.1.50) and that was actually an SS. So everything got

messed up and Sloka team had to waste lot of time trying to figure reasons for the mess.

After this incident a system was put in place whereby in a given range of IP addresses

portions were allocated, a particular range was meant for specific purpose, for example,

for a BS there is a certain range and when any one was to use specific IP as a BS, person

was required to register it with the IT administration so that there was no possibility of IP

clash of any kind.

Sloka also developed several routines in order to bring more structure to its operations as

it evolved from an ad-hoc start-up like structure to more professional organization. For

instance the inventory management and scheduling had to take in to account that the

hardware does not come on time, components don't arrive on time, custom clearance has

to be featured in to the time for final delivery. So they developed thumb rules to

anticipate the shipping delays before they started committing the numbers.

According to Arvind:

―Initial motivation for this came from the fact that we were taking too long to make a BS,

we used to take almost 2 days to make one BS because the roles were not clear, steps

were not clear and we had to formalize it, so that was the initial motivation but we took a

broader perspective instead of focusing only on production and assembly we looked at

the whole process from procurement of components to sending quote, invoice then

production followed by testing, assembly and finally packaging and delivery and post

sales support.‖





36

Another important initiative taken by Arvind and fully supported by Sujai was to put in

place the flow of material through the processes such as customer order placement and

delivery system. Arvind interacted with all the members of the team and after getting to

know their roles in the production process prepared flow charts depicting the flow of

material as the process went forward. Having prepared these charts, he discussed with

Sujai and obtained his feedback. Having incorporated those feedbacks he convened a

meeting of all members of the Sloka team and explained to them the flow and sought

feedback. After going through a series of iterations the processes were finally approved

and complete ordering process has been formed as a formalized process with

documentation completed by March 2008. Before formalization similar process was

followed but was not really put down as a standard procedure. Several benefits of this

formalization have accrued such as it has clarified the roles of each and every individual

because when things were ad-hoc roles and corresponding accountability were also not

clear. Also it led to optimization of certain routines as it was found that certain material

transfer could simply be avoided by following a specific flow.

Concluding Thoughts:

Sujai and team had achieved a few milestones in terms of developing a high end product

from India (refer Exhibit-6); however this was only the first stage of the long process of

building a successful company. They had several challenges lined up in front of them.

Foremost challenge was to acquire Indian customers for their product, till now both their

customers had been from other countries. Moreover, the WiMAX technology was yet to





37

make its impact felt and there was already a buzz about LTE (Long Term Evolution)

which was being promoted as the next logical step towards 3G and above. Many experts

were of the view that WiMAX may actually be overshadowed by LTE6 (Exhibit-4). At

the same time the broadband market in India had not picked up the volumes it was

expected to and this could affect the growth plans of Sloka. Government was yet to

release spectrum for the 3G services and WiMAX and this was impacting the WiMAX

rollout plans of service providers. Apart from BSNL no other service provider had

actually gone forward with WiMAX deployment and even BSNL was moving in a

measured manner. ISP’s were facing increasing pressure from convergence and they too

were looking for newer ways to attain growth, mostly by getting in to data management

services. No small ISP’s, which were the target customers for Sloka had emerged with

any concrete business plan. All the above mentioned threats were very real and there was

an urgent need to review the future direction of the company.

On the financial side Sloka was yet to get any major investor on board. Overall profit

figures and balance sheet (Exhibit-5) was not so strong given that only two customers had

been acquired. For continuing the development work the team needed to be paid regularly

and this could prove difficult in near future with dwindling sources of funding given that

whatever could be obtained from family and friends was almost fully exploited. Then

there were several development side challenges such as further up-gradation and

improvement of the product to make it on par with the offerings from competitors. In the

6 Refer http://wimax.tmcnet.com/topics/wimax/articles/48393-nokia-stop-making-its-only-wimax-enabled-

device.htm

Refer Business world 23/01/2009, http://www.businessworld.in/index.php/Telecom/What-Lies-Beneath.html

http://www.businessworld.in/index.php/Telecom/What-Lies-Beneath.html

http://www.businessworld.in/index.php/Telecom/What-Lies-Beneath.html





38

development process itself, testing was highly inadequate and a lot more work needed to

be done in this direction by developing comprehensive test cases and bringing in

automation in testing.

Although no Indian company was known to be active in WiMAX space but things were

more difficult on the international stage. Telsima, which was started by an Indian origin

entrepreneur, had become very active in India with its office having been set up in

Bangalore and Gurgaon. There was a chance that some Indian companies could team up

with WiMAX developers like Alvarion and offer their products in India. So, possible

competition was brewing in the WiMAX space and Sloka needed to respond

appropriately not just to the upcoming competition but also to the above mentioned issues

that could threaten the very existence of Sloka.





39

Exhibit-1

Sujai

CEO

Subbaiah

CTOFinance

Upendra

Operations

Arvind

Product Mgmt.

Madhava

MAC

Raju

TestRam

IP

Srini

Platform

Anand

Hardware

Mastan

Hardware

Neel

Mechanical

Vartha

NMS/AAA

Chaitanya

Test

Deepa

Test

Chidambar

Platform

Pratap

NMS

Abhishek

NMS

Ramaprasad

NMS

Mangala

NMS

Kavya

NMS

Pavan

MAC

Madhu

MAC

Amir

MAC

Sales/Mktg

Vishnu

IT

Raju Kutty

Office

Jacob

Admin

Sloka TelecomOrganization Chart

(Source: Company Documents, 2008)





40

Exhibit-2

Sloka Fixed WiMAX Network Solution

(Source: Company website)





41

Exhibit-3

Sloka Products

(Source: Company Documents)





42

Exhibit-4

News Items

TRAI sets terms for India auction

Posted By WiMAX Day On 29.Sep.06 @ 5:23 pm In India, 3.4 ~ 3.6 GHz, 2.3 ~ 2.69

GHz, A-WiMAX, Auction

NEW DELHI (WiMAX Day). The Telecom Regulatory Authority of India (TRAI) has

released the Recommendations on Allocation and pricing of spectrum that was

announced on 19th September. The TRAI confirmed that it recommends the spectrum

2.32.4 GHz, 2.5–2.69 GHz, 3.3–2.4 GHz and 3.4–3.8 GHz as being suitable for WiMAX.

TRAI suggested that 200 MHz of spectrum should be made available immediately, and

an additional 100 MHz made available in 2010. In the allocation of spectrum, TRAI

recommended that 15MHz be available per operator in a contiguous block, and 12 blocks

would be allocated to operators in large cities on a regional basis. One block of 15MHz

should be allocated to operators who may deploy a network in cities with population

under 1 million. The minimum pricing for the spectrum TRAI recommended that for

main cities each 15 MHz block should cost 100 million Rs (US$2.1 million), secondary

areas at 50 million Rs and the third area at 20 million Rs.

Article printed from WiMAX Day: http://www.wimaxday.net/site

URL to article: http://www.wimaxday.net/site/2006/09/29/trai-sets-terms-for-india-

auction/





43

What Lies Beneath

Why the launch of WiMAX is being deliberately delayed

M. RAJENDRAN

23 Jan 2009

Worldwide interoperability for microwave access,

popularly called WiMAX, may seem like an unfortunate

victim of the deferment of 3G. But in reality, it is part of

a well-orchestrated strategy of the GSM lobby to keep it

at bay as long as GSM’s own broadband wireless

technology to rival WiMAX is not ready. GSM is

developing LTE or Long Term Evolution, whose global

commercial launch is at least two years away while

mobile WiMAX, which allows download speeds up to

300 mbps on the go, has been rolling out across the

world since early 2008. Mobile operators such as Bharti

and Vodafone, which sought 3G spectrum for high-speed

services, had opposed introduction of mobile WiMAX.

They are now joined by Reliance Communications and

Tata Teleservices as they launch their GSM services.

Their objective is to capture as much of the voice market

and hold back the high-speed data market from opening

up till they are financially ready to do it themselves. ―It is a case of more than 30 times

faster speed,‖ says Kapil Dev Kumar, chief operating officer of Gurgaon-based

Smartdigivision. Typically, 3G can offer up to 10 megabits per seconds of download

speeds while mobile WiMAX offers 300 mbps, besides better voice clarity. But in linking

GSM’s 3G auctions to broadband wireless (where mobile WiMAX is the only technology

available), and delaying both, the babus in the telecom ministry and some of India’s

biggest mobile companies have ensured that they can delay the launch of WiMAX to as

close to LTE’s commercial launch as possible. Otherwise, other than the fact that they are

both high-speed internet technologies, there is little similarity between the two. 3G will

roll out on 800 Mhz, 450 Mhz, 1900MHz and 2.1 Giga hertz spectrum, while WiMAX

will be on 2.3 GHz and 2.5 GHz spectrum. 3G will be largely on mobile and will be used

in desktops and laptops too via data cards. WiMAX, on the other hand, is largely for

laptops and desktops while WiMAX handsets for mobile services are still not

commercially available. One argument that has been used to link 3G to broadband

wireless has been that broadband wireless is being offered at a very low licence fee.

Cellular Operators Association of India wants a spectrum fee for mobile WiMAX on a

par with 3G. But WiMAX supporters argue that 3G will get 5+5 MHz of spectrum

(enough for 3G services) while broadband wireless requires a minimum of 20 MHz. So

while 5+5 MHz of 3G spectrum is priced at Rs 2,020 crore, 20 MHz of BWA spectrum is

priced similarly at Rs 1,010 crore. However, sources in the Telecom Regulatory

Authority of India and Department of Telecommunications say eager equipment

manufacturers such as Ericsson, Huawei and ZTE have begun lobbying for LTE. "They

are trying to convince us — similar to what they did in 1995 — that 4G (LTE) is the





44

future, not WiMAX,‖ says a senior Wireless Planning Commission member.

Interestingly, Sweden’s Ericsson is a known WiMax basher. It has positioned itself in

India to capture a major share in 2.3 and 2.5 gigahertz bands — bands that are meant for

broadband wireless. ―It is a ploy to corner spectrum allotted for WiMax and also to delay

the auction,‖ says a senior WiMAX Forum executive, who requested anonymity. Clearly,

there’s more to 3G-broadband wireless deferment than meets the eye.

[email protected]

(Businessworld Issue 27 Jan-02 Feb 2009)

Source: Retrieved from http://www.businessworld.in/index.php/Telecom/What-Lies-

Beneath.html on 12/02/2009

http://www.businessworld.in/index.php/Telecom/What-Lies-Beneath.html%20on%2012/02/2009

http://www.businessworld.in/index.php/Telecom/What-Lies-Beneath.html%20on%2012/02/2009





45

Exhibit-5

Balance Sheet for Sloka (year ending 2007 and 2008)

Amount in Rs

As at 31st March

2008

As at 31st March 2007

Sources of Funds

Shareholders' Fund

Share Capital 100,000 100,000

Share application money pending

allotment

21,838,121 14,630,425

21,938,121 14,730,425

Loan Funds

Unsecured loans 1,973,875 2,216,895

23,911,996 16,947,320

Application of Funds

Fixed Assets

Gross Block 7,440,401 5,367,403

Less: Accumlated Depreciation 1,950,615 966,565

Net Block 5,489,786 4,400,838

Capital Advances 228,279

5,718,065 4,400,838

Current Assets, Loans and

Advances

Sundry Debtors 19,829

Cash and Bank Balances 310,505 554,935

Loan and Advances 2,845,420 1,841,395

3,175,754 2,396,330

Current Liabilities and Provisions

Current Liabilities 3,993,071 289,901

Provisions 44,390 11,000

4,037,461 300,901

Net Current Assets (861,707) 2,095,429

Misc expenses not written off 456,366 467,628

Profit and loss account debit balance 18,599,254 9,983,425

23,911,978 16,947,320

This casestudy has been prepared by Prageet Aeron, Doctoral student at Indian Institute of Management, Ahmedabad, under the guidance of Prof. Rekha

Jain, Indian Institute of Management, Ahmedabad for academic discussion only and does not represent appropriate or inappropriate handling of a business

situation.

46

Working on

3G/UMTS

BS

Foundation

laid for

compact, cost

effective BS

First prototype created which

was ordinary microprocessor

based BS

Defined the

architecture

Developed the H/W

boards

S/W development

began

Test architecture

developed

Rack solution

developed from

prototype solution

H/W: Controller board

and RF front end developed

S/W: features added for

MAC and other

applications

Network Management

System (NMS) work

started

Improvements and

modifications suggested

by customers incorporated

Different versions of BS

(5.8 GHz and 2.4 GHz)

developed with differing trans-receivers and front

end

Heat dissipation

identified as a problem area and solved

IP for SDBSA filed and

several routines

established

First strategic and

technological shift with

focus on WiMAX

March 05 Jan 06 July 06 July 07 July 08

Timeline

Exhibit-6

Technological trajectory followed by Sloka