Thursday, May 6

Indian Broadband Race

The broadband race in India is picking up. Anand Parthasarathy in The Hindu Reports about the broadband happening in India and also informs about the types of broadband and its features. The report covers the broadband initiative of the players like ...

* BSNL's Direct Internet Access Service (DIAS)

* Dishnet's DSL

* ZeeNext's Ethernet

* Sify Infoway 's WiFi

* Reliance Telecom's WiMax

Another Story from Business World India (TRAI's broadband recommendations : Shake-up signals)

UNBUNDLE, compete, achieve. That, in short, is the message of the Telecom Regulatory Authority of India's (Trai) final recommendations on broadband in India. The 113-page paper defines broadband as an always-on data connection with a minimum capacity of 256 kbps. But the meat really is in its 12-odd recommendations, some of which are bound to cause mayhem.

If adopted together, they could take India to 20 million broadband subscribers by 2010 reckons Trai chairman Pradip Baijal. He reckons the recommendations will help "slaughter the prices of broadband". Kunal Bajaj, the consultant for Trai who worked on the report, reckons that two recommendations are key for that - reducing the cost of equipment and unbundling. Read more on Business World

Broadband India:Recommendations on Accelerating Growth of Internet and Broadband Penetration [PDF]

Executive Summary of Recommendations

In April 2002, India was adding 0.28 million new mobile phone connections per month. Tariffs were high and fixed by the regulator, with only a couple of operators in each circle. Today, operators are adding almost 2 million new mobile subscribers per month, almost 8 times that of April 2002. Many regulatory steps were taken to arrive at today's scenario
by allowing enhanced competition and reduced costs to benefit consumers. While not all steps were accepted instantly by operators or the public, today consumers and the overall market are in a much better situation. Internet and broadband roll-out has the ability to have even farther reaching effects than the reforms in telephony did. Not only will broadband enable people to communicate with each other, but also to do business more efficiently over longer distances, be better
educated, have access to better health services, benefit from better governance, and have enhanced entertainment services. Availability of broadband services at affordable pricelevels will have significant impact on gross domestic product (GDP) and attract new investment, create jobs and a larger more qualified labor pool, and increase productivity through infrastructure creation and access to new and improved services. While internet growth rates in India have been flat, and at times declining over the past three years, other countries like Korea, China and Malaysia have been doubling and tripling the size of their internet and broadband subscriber base. India currently has 0.4 internet connections and 0.02 broadband connections per 100 persons, while Korea has 25 and China has 1.4 broadband connections per 100 persons, with its current level 50% higher than what it was just six months ago. Korea has achieved its success story in a span of less than five years, going from less than 1 broadband subscriber per 100 persons in 1999 to the levels it has reached today. By 2002, nearly 30% of their GDP was
transacted on broadband. The lessons that India learns from these examples can be applied to our current situation to realize the same explosive success. In this document, the Authority has identified eleven major hurdles preventing growth of
internet and broadband services. These hurdles include:

* Price

1. Subscription prices of broadband services in India are 60 times higher than those in Korea, which translates to 1,200 times higher when considering purchasing power (Paragraph 1.8)

* Access to the customer in the last mile

2. Lack of access to copper in the local loop and the high costs of duplicating this existing infrastructure (Section 3.4)

3. Low quality of cable TV infrastructure and the lack of organization in that industry which makes upgrade difficult (Section 3.5)

4. High costs of using DTH and VSAT technologies, and restrictions preventing them from being used for delivering broadband internet services (Section 3.6)

5. Policies preventing terrestrial wireless solutions from being effective alternatives to bridging the last mile to customers (Section 3.7)

6. Barriers in obtaining right of way clearances that are stalling network installation efforts (Section 3.9)

* Costs of backhaul networks

7. High prices in domestic leased circuits, even though there are multiple competing players (Section 4.1.5)

8. High costs of international leased circuits and problem with access to landing stations (Section 4.1.6)

9. Ineffectiveness of NIXI thus far to be able to deliver on its objectives (Section 4.2)

* Fiscal policies

10. Policies which prevent availability of low cost access devices, do not create incentives for further investment, and add direct cost to providing and purchasing broadband services (Chapter 5)

* Creation of content and applications

11. The lack of locally relevant content and applications, especially for broadband, which is caused primarily by a lack of users and the absence of a "changeengine" to drive the growth (Chapter 6)

We have addressed these hurdles with twelve sets of recommendations for creating an environment that is more conducive to attracting investors, entrepreneurs and consumers to contribute to the spread of these services. These recommendations include:

* Definition and goals

1. Broadband is an "An always-on data connection that is able to support various interactive services, and has the capability of a minimum download speed of 256 Kbps." This will be revised upwards in the future (Section 2.1)

2. India can achieve 20 million broadband and 40 million internet subscribers by 2010, which translate to penetration levels of 1.7% and 3.4%, respectively. This is a bare minimum target and will need to be upgraded as progress is made (Section 2.2)

* Access to the customer in the last mile

3. Enabling the use of the existing infrastructure on the incumbents' copper to reach customers via DSL (Section 3.4.2)

4. Decreasing artificial costs in the operation of DTH and VSAT platforms, while allowing broadband services to be offered via these technologies (Section 3.6)

5. Allowing terrestrial wireless solutions to spread more effectively as a means to reach customers with today's technologies, as well as those in the near future (Section 3.7)

6. Enabling right of way clearance systems to be further streamlined for both current and future build-out efforts (Section 3.9)

* Costs of backhaul networks

7. Allowing customers to realize the benefits of competition in domestic leased lines while compensating for the current lack of such competition in "within city" links (Section 4.1.5)

8. Identifying the steps that need to be taken to make NIXI effective and attractive for ISP's of all sizes to willingly partic ipate (Section 4.2)

* Fiscal policies

9. Encouraging the availability of low cost access devices through depreciation, donation and recycling of used PC's (Section 5.3)

10. Decreasing to the level of duties on mobile phones the current overall levels of duties for imported items used in broadband networks, and equalizing duties Growth of Internet and Broadband on inputs and domestically manufactured goods with those that are imported (Section 5.4)

11. Providing the appropriate tax structure to enable faster growth, without the Government having to forego significant revenue (Section 5.5)

* Creation of content and applications

12. Outlining how the Government should proceed in being more aggressive in its efforts to create content and applications available online for interacting with citizens, and thereby serve as a leading example (Chapter 6) Once these recommendations are implemented, India can reach broadband penetration levels that are 50 times where we are today within a couple of years. The growth that has been witnessed in a few years in India in the telephony space and in Korea in broadband, can be replicated and surpassed.

**** Download the Full Report in *PDF* (Righ Click on the link and Choose 'Save Target As')****

Related Links :
* Consumer Broadband Report for 2004 [PDF] prepared by Nagendra Technology Consulting

* Reliance kickstarts broadband operations with TV channels

* Birds-Eye.Net India Broadband Operator Directory

* CIOL : News : India poised for the broadband leap