Are we Leading to a Broadband Boom?

Bitcom India


The Government of India had announced in 2004, the broadband policy,which enumerated 3 million connections  by 2006, 9 million by 2007 and 20 million by 2010.  Broadband growth is slow but at7% per month by 2010 there will be 40 million internet connections and 20 million Broadband  connections. There will be over 240 million broadband subscribers in Asia-Pacific by the end of 2011. Broadband connection is defined as a minimum of 256 Kbps ‘always-on’ connection. Various technology options such as Optical Fibre, Satellite, DSL, Terrestrial Wireless, etc have been considered.That broadband internet connectivity is no longer in the realm of luxury is well known Just that it took Indian authorities several years to realise this. In June 09 end a decision by the Telecom Regulatory Authority of India (TRAI) to redefine broadband as 2 Mbps (1MBps = 1 million bytes of data transfer per second) and not the dismal 256 Kbps as it is at present is a very welcome move TRAI had earlier proposed to improve the quality of broadband services by specifying the maximum number of subscribers that can be packed into a single unit of bandwidth, in a consultation paper issued in Jan 09, the telecom regulator had said that under international practice, Internet Service Providers (ISPs) ensure that only 50 subscribers are accommodated in a single 2 Mbps line. For corporate subscribers, the international average is at 25 users. While TRAI had not suggested any specific ratio for Indian ISPs, it has sought industry views on the same. There have been complaints from the subscribers regarding inadequate broadband speed being provided by Internet Service Providers. Most of the complaints alleged that the available broadband speed is lower than the subscribed speed. The move by TRAI was aimed at ensuring that subscribers get the speeds for which they have sought the connection for, as the subscribers with 256 Kbps broadband line may not get that even that speed. The telecom regulator had proposed to set up a monitoring mechanism wherein subscribers could get the assured speeds. In countries around the world broadband penetration is a key economic indicator In fact several studies have shown that broadband has made a deep impact on both local as well as national economies. A US Department of Commerce study submitted in late 2006 found that broadband directly contributed to a rise of 1.4 per cent in national employment numbers 1.2 per cent growth in business establishments and a 6 per cent rise in housing rentsAlthough similar studies have not yet been carried out in India it is clear that broadband can contribute tremendously to several growth areas. The entire business process outsourcing (BPO) industry  depends upon reliable broadband connectivity Broadband helps doctors conduct remote surgical and consultancy procedures through telemedicine software that runs off the Internet using broadband connections. Companies can raise productivity levels by implementing broadband based video-conferencing , instead of travelling. From a consumer a point of view the TRAI announcement is just the beginning to getting real broadband speeds cheap .Although one major service provider reduced its broadband tariff by 43 per cent only recently, Indian prices are far higher than any other country that it compares itself with. Even a slow 100 Kbps line costs the equivalent of $16 in India whereas in Korea it is less than a dollar and $3 in China. If TRAI has its way India’s broadband prices will halve which will also provide a much needed impetus to create new demand (India has just 1.1 million broadband connections compared to more than 50 million in China) and sustain a growth rate that incentives companies to offer services at lower rates.Having said that, broadband growth also depends upon 3G mobile connectivity and how quickly new broadband technologies such as WiMax are implemented. That India is hungry for broadband is no secret. The question is: will the collective strength of TRAI, Department of Telecommunications and indeed service providers be able to satiate that. It is interesting to note that while there are countries which offer speeds of over 20Mbps; India is still stuck at 256 kbps. Changing the definition of broadband will have major ramification for operators if they want to claim subsidy from the Government.If offering a minimum of 2Mbps speed is made mandatory, operators will have to ramp up their network. “We do not think it is feasible to move from 256 kbps to 2Mbps in one shot. If at all the definition has to be revised then they should move to 512kbps, otherwise it will be too costly for both operators and subscribers,” said a GSM player. However, the WiMax industry is backing the proposal. According to WiMax players, the technology will enable operators to offer more than 2Mbps of wireless broadband services.