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Bus. Std: Broadband Blueprint

July 14th, 2004 · No Comments

My Business Standard column:

One of the most important documents for India’s digital future has barely been discussed in the media. What happens to the TRAI (Telecom Regulatory Authority of India) recommendations on broadband and internet (available at http://www.trai.gov.in) will have far-reaching implications for each of us in our personal and business lives, and we aren’t even engaged in the debate.

First questions. What broadband? Why broadband? How broadband? Broadband connectivity, as defined in the TRAI report, is always-on connectivity of 256 Kbps or higher. While one can argue about the connection speed, that is a big leap from what is advertised today (64-128 Kbps).

Broadband is the endgame for the computer, communications and consumer electronics industries. Besides making Internet access faster, broadband can make possible a wide variety of applications. For example, video-conferencing can connect far-flung offices and also enable distance education, telemedicine can bring medical attention to remote areas, video-on-demand can time-shift entertainment to suit our convenience, voice-over-IP can bring telephony costs down even further, multi-player online gaming can now become a reality, and enterprises can access business applications centrally.

The two most common modes of broadband access are xDSL and cable. DSL works on regular telephone lines, and is the most popular way to deliver broadband. Cable companies can also provide broadband by virtue of the fact that they too have a wired connection coming into homes and enterprises. Other possibilities for providing broadband are via satellite and through wireless technologies.

The problem in India, as we have all experienced, is connectivity. TRAI has estimated that bandwidth in India costs 1,200 times more than South Korea, which is the most wired nation today. The end result is few in India have experienced the world of broadband.

While there is a lot of talk about building out India’s infrastructure in terms of its roads, ports and airports, we also need to act rapidly to build out our digital infrastructure. From education to healthcare, and entertainment to ecommerce, the world of broadband can also lay the foundation for booting up the domestic IT industry and help improve productivity across India’s industrial sector.

This is the context of the TRAI recommendations. TRAI has sought to address 11 hurdles that hinder broadband growth in India: price, access to the customer (lack of access to the incumbents copper for DSL, low quality of cable TV infrastructure and lack of organisation, high costs for DTH and VSAT, policies preventing wireless solutions from spreading, clearances for right of way), costs of backhaul networks (lack of effective competition in the within city networks, high costs of international bandwidth, ineffective implementation of National Internet Exchange of India), fiscal policies (high taxes and duties, and lack of incentives for faster growth), and content and applications (lack of locally relevant content and absence of change agent to drive growth).

TRAI hopes that the implementation of its recommendations will boost the Internet subscriber from last year’s 4 million to 40 million by 2010, along with a hundred-fold increase in the broadband user base to 20 million.

One of the most important recommendations of TRAI is that of local loop unbundling. In simple words, it means that the incumbent telcos (BSNL and MTNL) need to open up access on their last mile to others for an appropriate fee. This way, others do not need to replicate what is an expensive last-mile infrastructure. While the concept is sound, this is a non-trivial decision for the government-owned telcos. The interests of a few are likely to supercede those of many.

What India needs is a complete unshackling of all regulation to ensure that every Indian household and enterprise has access to affordable broadband by 2010. We need to think 5-10x the estimates of TRAI. To make that happen, we need to think disruptively. India needs to become a hotbed for next-generation wireless and other technologies which can deliver broadband to homes and enterprises rapidly. It does not matter if others have done it or not. We need to lead the way. Just like South Korea did a few years ago.

Let us set a goal of providing a whole solution of hardware (access device), software, broadband connectivity and tech support for Rs 700 per user per month. Of this, broadband access (512 Kbps or higher) should cost no more than Rs 250 per month. Now, let us work backwards and figure out what we need to make this happen. If we can imagine 100 million users in five years, this is a market of Rs 30,000 crore per annum for broadband service providers to fight over. The world of commPuting as a utility would have arrived. For once, let us hope TRAI is wrong with their estimates.

Tags: Bus. Std. (ICE World) Column

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