India poised for the broadband leap

NEW DELHI: It's stocktaking time for broadband in India. Broadband take-off is constrained by high ILD costs, lack of local content and wrong perceptions. A handful of service providers launched broadband through a variety of last mile technology, but due to lack of volumes, the commitment of service providers was found wanting. After much hype about how this amazing service would change the surfing experience of users, retail customers today are still a frustrated lot, downloading mails through dial-up connections at snail's pace.

Skeptics meanwhile started writing off the feasibility of broadband in a country like India. Some serious questions, very basic to the sector were asked -- What is the definition of broadband in India? Are we talking of email download speeds at 40 Kbps? Or in the days of terabyte speeds should we be happy with download speeds of even 2 Mbps? Earlier, such conflicting questions plagued the minds of stakeholders.

Today most people converge on some common elements in the definition of broadband in India which is download speeds of 128 Kbps and above, "always on" connection and no dial-up dependency for connectivity. The Telecom Regulatory Authority of India (TRAI) is in the process of issuing guidelines on broadband in which the speed limit is likely to be prescribed at 128 Kbps. It will not comment on the technology in the last mile and shall look at the quality of service in the next phase of evaluation.

So what are the major issues that have posed as obstacles for the growth of the sector today? "Lack of awareness and maturity levels of customers is the major issue," said CEO of TouchTel, in Delhi and the northern region, Rajiv Kohli. "There is a perception that broadband is an expensive proposition. Customers still question whether they really need it. People haven't yet enjoyed the pleasure of surfing and downloading at high speeds. The other important facility is the ability to surf and use the telephone at the same time," he added.

TouchTel offers various packages for broadband connectivity with the most basic package starting at Rs 200 per month. Sify, another broadband service provider, seconds this. Said Sify CTO, Rustom Irani, "Most people access the Internet through dial up because this is affordable, easy to establish and suitable for the kind of Net usage that currently exists."

Second, the high cost of international bandwidth acts as a major hindrance to service providers' ability to provide affordable broadband connectivity at high speeds. "Despite steep fall in international bandwidth rates, cost of bandwidth in the retail segment is still very expensive at Rs 30 lakh- Rs 35 lakh for a full circuit 2 MBPS line," said Bharti Telesonic CEO, N Arjun.

Service providers have to build in the cost of international bandwidth, when offering packages to retail customers. Referring to the issue, broadband equipment vendor UT StarCom Marketing VP Yogesh Bijlani said, "Unless service providers offer broadband at sub Rs 1,000, in the Rs 700- Rs 800 range, broadband cannot take off in the retail segment."

This leads us to the issue of lack of appropriate local content in the country. It is widely believed that content and applications would drive broadband penetration in the country. Volumes have failed to take off in the absence of appropriate local content. "Most of the relevant content today is hosted in foreign servers which require expensive bandwidth connectivity," said Arjun.

Added Sify's Rustom Irani "Content aimed at broadband access needs to be available. These include graphics- rich news sites, video streaming, online games, video chats, music files and so on. All these are currently not easily available for an Indian audience, simply because the demand doesn't exist with most users still discovering what they can do with Internet such as search, chat, email, etc."

A large hunger for broadband connectivity is expected to come from our communication needs like video conferencing, video chats and telecommuting. Entertainment is the next sect of demand driver comprising movie-on-demand, online music downloads, online gaming, etc. Service providers like Bharti and Reliance today are actively pursing alliances to provide acceptable content to Indian customers.

DSL appears a strong favorite access technology because of the large copper networks in place but growth is restricted here by the Basic Service Operator's (BSO) refusal to unroll their copper to ISPs. This leads to DSL service providers (non-BSO's) requiring to lay their own fiber, making the provisioning an expensive and very time consuming affair.

However, not all subscribe to that view. Aksh Fiber Optics, has developed its own fiber, which is much cheaper than market rates. It has taken leased lines from BSNL and wired 400 villages around Jaipur with its own fiber to demonstrate that cheap broadband is possible.

"Cable operators are best placed to trigger the broadband revolution because they have control over the content and a captive subscriber base. But they lack funds and structured approach," said Niraj Gupta, an industry veteran and the former chief of Flag Telecom in India.

"Internet by cable operators can overcome limitations of speed due to poor quality of copper in PSTN. However, this requires investments to upgrade existing quality of coaxial cable as well as, expensive cable modems at the subscriber end, and the head-end equipment at the cable operator's end. Besides, Internet over cable service, has not really taken off due to the fragmented nature of this industry," summed up Sify's Irani.

Sify is aggressively launching its home broadband access service across the country using its countrywide backbone to deploy a fixed wireless broadband access solution. In addition to making the service available in residential buildings, the company is tying up with cable operators on a revenue-share basis.

Nortel Network's Chauhan, is optimistic about the sector's take-off. "Notwithstanding the earlier hype, I think the broadband industry is poised for take-off only now. With NLD networks in place, and ILD costs fast dwindling, you will see more action in the last mile. I think you will see service providers taking up the broadband pitch more aggressively in the days to come."

There are signs now that broadband is picking up again. Service providers like Sify and TouchTel have experienced good growth in their broadband launches. In coming months, TouchTel expects the number of new broadband subscribers to be 10,000 per month. Sify has connected over 400 buildings in Mumbai, and is expanding its services into Chennai, Delhi, Bangalore, Hyderabad, Pune, Chandigarh, Noida and Gurgaon.

Apart from the optimism shown by broadband providers, industry associations have recognized that despite initial hiccups there is huge potential for broadband in India. In anticipation, both CII and FICCI are in the process of undertaking studies to identify the sector's potential, obstacles, which hinder growth and suggest remedies thereof.

(CNS)