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).
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
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.
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.
Digital Subscriber Line (DSL)
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.
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.
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.