Broadband, the new paradigm of India

When the Government announced its broadband policy in 2004, there were skeptics who did not believe that we could suddenly leap frog from the 33k/56k dial up to 256K on broadband. Of course we had many enthusiasts as well. We could also see the basic service operators digging roads or what was left of it, to put in brand new fiber infrastructure. The IT votaries certainly did not mind the digging, hoping that it will all lead to new benefits and we will be delivered from the misery of dial up network. In fact American politicians (John Kerry?) thought that Bangalore was all wired up for broadband, way back in 2004

Now, there is an estimated 2.2M broadband subscribers in India today and we are not on course to reach the target of 9M by this year. Apart from that, 20 million subscriber line is the target for us by 2010. It seems to be a tough call, considering the infrastructure issues. However, some policy changes can help shift the gears towards rapid deployment. Allocation of frequencies for BWA (broadband wireless Access) is the immediate need of the moment.

High-speed Internet access will be a key requirement for India to keep itself ahead of the curve in IT for one thing. And more importantly BWA roll out will help us to integrate the vast majority living in rural areas and help us to bridge the digital divide as well as open up opportunities for rural youth.

SME could benefit from broadband by accessing shared data centers and making use of VoIP and other services. This will ultimately help them attain productivity goals and be more competitive. Telecommuting will be in increasing focus as urban areas get clogged and people end up spending long hours in commuting. Broadband allows people to work from home or remote locations. In fact, some IT companies may even find it useful to expand capacity without having to add additional office space and associated costs. Consultants and contractors can also log in from their own or shared offices.

Increasing options in infrastructure

Two major factors that determine the broadband growth are - infrastructure and Content. Initially, the key bottleneck was infrastructure. In the beginning, ADSL was the leading technology option and it required good copper. We have around 40M copper connections, most of them in the urban areas. BSNL and MTNL did move quickly in the initial phase. But these days, we often hear lead times of months, if not weeks, for a new connection. This is mainly because of cumbersome procurement policies of public sector undertaking and the consequent delay in installing DSLAMs (Digital Subscriber Line Access Multiplexer). Other technology options like, FTTH and wireless (mostly Wimax) have ensured that the squatter on the copper infrastructure will not be controlling the market. Both FTTH and Wimax will be leading edge technology options in the near future, as costs of CPE (customer-premises equipment) will start falling.

BPL (broadband over Power line) is finally coming of age and could be the new option. BPL is very well suited for last mile connectivity in high-density urban apartment complexes and office buildings. This technology has been around for a while, but it is only maturing now. Surprisingly, the cable route has not picked up in the growth of broadband, mainly because the multi system operators (MSOs) are happy with cable TV revenue. With competition coming in for cable operators from DTH (Direct To Home) services, one could see some action here.

The yet to be solved issue of 'content'

We, in India, however have a major problem, that of content. Most Indian netizens today use English and it often limits the vast majority who are not well versed in that language. If we look at Korea, then one can see the impact of local language content.

But with IPTV and Bollywood right behind, we may have a new situation and new business opportunities opening up. Clearly the key to broadband business is content and not connectivity. Service providers will have to find new ways of delivering content and getting customers. With Bollywood generating so much video content, it should be a great opportunity for broadband service providers to look at content based offering and not depend on bandwidth based ARPUs.

We require education-oriented content as well. And we need most of these in local languages. Web content in local languages is limited at this time and we have seen that in Asia , the IT penetration has a lot to do with language (in countries like China, Korea and Taiwan). If the education and training content is made available in local languages we can bring in IT to vast majority quickly.

While in the West the connectivity is mostly with unlimited monthly rate basis, in India we see download limits for data transfer. While some service providers claim to give broadband connectivity, the speeds are often limited, sometimes as low as 128Kbps rather than 256 or 2MBps.

The broadband players will also have to keep a watch for 4G. (This is one more reason why we should encourage SME WISPs (Wireless Internet Service Provider) in the Wimax space, as otherwise incumbent mobile operators may prefer 4G)

Broadband as know today will also have competition from mobile service providers. We have Vodafome in India now and they can bring in new technologies. Mobile operators already have a major challenge with huge numbers taking on mobile connection though with low ARPU levels. Therefore many of them with an installed infrastructure suitable for BWA, will look at content-based business models. That means developers and companies who can turn around quality content in local languages will be in demand. The action in broadband is just happening

The author is the managing director of Convergent Communications, a networking company specializing in Wireless networking. Kedlya is also a member of executive counsel of MAIT (Manufacturers' Association for Information Technology) and has about 30 years of experience in the industry.