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Fixed Wireless Access and Satellite to experience the fastest growth amongst all the broadband technologies

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CIOL Bureau
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The market for broadband access in India is one of the most dynamic

markets in the telecommunication market space. Due to the economic slowdown and lack of

awareness of the benefits of this technology amongst the customers the concept of

broadband has not picked up as expected. IDC in its report titled, " Broadband

Equipment Market Forecast and Analysis 2001 – 2005
" predicts a healthy

growth rate for different broadband access technologies. IDC expects Fixed Wireless and

satellite broadband access to be the front runner in the broadband access market ahead of

alternative technologies such as cable and DSL. Overall broadband equipment market is

expected to increase from Rs. 153.42 million in 2001 to Rs. 665.25 million in 2005

(excluding satellite).

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The broadband area is stratified by fundamentally different

technologies involved. IDC in this report tries to present separate set of opportunities

and challenges for equipment market for different broadband technologies mainly including

DSL, Cable, FWA and Satellite.

Cable

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Cable is supposed to have the most widespread penetration in the

country and should be the ideal platform for broadband access but the basic problem of the

existing broadband infrastructure is that it is not suitable for a two-way communication,

which is essential for a broadband access. Also the prices of upgrading them is pretty

high. This thus hampers the adoption of cable modem technology.

Despite these problems and competition from other broadband

technologies, cable modems will still proudly coexist with other broadband technologies

and will carve a niche for itself in the India homes and SMEs.

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Increased demand, particularly among work-at-home households and

internet users will continue to drive consumer adoption of cable modem services. Future

expansion of the data-over-cable market will be driven by increased Internet use and the

development of compelling image- and video-rich applications and IP telephony services.

However, mass-market adoption of cable modem technology is still hampered by a number

of issues including scaling problems, installation and provisioning challenges, and

competition from other broadband technologies.

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Digital Subscriber Line (DSL)

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The DSL market in the country is expected to grow at a healthy rate and

attain a respectable rate at the end of the forecast period.

DSL has been commercially available, for some time now, many factors

have come together to push the technology to the point of mass-market deployment around

the world. However, DSL is still plagued by distance limitations, regulation issues,

installation and provisioning challenges, and competition from other broadband

technologies, most notably cable modems on the residential side and fixed wireless and

other high-speed technologies on the business side. However with the overcoming of these

hindrances DSL is destined to achieve tremendous success.

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Fixed Wireless Access (FWA)

Real competition has just begun in the broadband marketplace with FWA

as a late-market entrant. FWA is an increasingly attractive alternative since it allows

competitive providers to bypass the local loop generally controlled by incumbent carriers.

Moreover, FWA is well suited to installations in rural and remote locations because of its

wireless infrastructure and ability to reach customers not served by DSL or cable modem

services.

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The FWA will have a major chunk of the Indian broadband pie. There will

be lot of investments for increasing the infrastructure next year and on an overall level

a healthy growth rate is expected in the total equipment market.

However, a number of factors continue to slow adoption of FWA. Competition and service

provisioning are generally not well developed partly because of the high cost of licenses.

Furthermore, the economic slowdown and recent capital crunch has negatively impacted many

FWA providers worldwide, many of which are new market entrants, dependent upon a steady

stream of market funding.

Satellite

Satellite is one of the unexplored broadband access technology which

has immense potential not only in terms of direct to PC connectivity but also multicasting
and ISP links.

IDC expects number of direct access subscribers to reach 2.1 Million in

2005 from 0.1 Million in 2002 with a CAGR of 114%. The satellite direct access market is

expected to acquire a sizeable chunk of the broadband access market India due to the fact

that is ubiquitous in nature and enterprise demand for high speed fat data pipe. A lot of

issues, which are a hindrance for other broadband access technology, can be bypassed by

using satellite as a broadband technology.

Although in the ultimate analysis all the broadband technologies will

have their share in the broad band pie but it is the satellite and fixed wireless

technology which is expected to take the major chunk provided government policy framework

plays a facilitator partner for these services.

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