Broadband in India

The Telecom Regulatory Authority of India has released a set of recommendationsintended to boost adoption of the Internet and broadband in India. The aim is to replicate the rapid growth in mobile phones in India. The target is to have 40 million Internet connections and 20 million broadband connections by 2010.

The Financial Express provides an overview:

To start with, if the recommendations are accepted, the fixed line operators have to specifically choose between the two methods of unbundling shared unbundling and bit stream access. They also have to suggest the terms and conditions like pricing for unbundling, which will be reviewed by Trai.

In simple words, local loop unbundling is the method as per which the owners of the last mile copper (primarily the incumbent) are usually mandated to share their infrastructure with other licensed service providers wanting to provide broadband services.

Under shared unbundling, competitive providers have access to either voice or data portion of the line. Under bit stream access, the local loop operator installs high speed access links to its customers and allows competitive providers access to this link.

The regulator has broadly identified eleven main hurdles to growth that need to be addressed like high price for broadband, high cost of equipment, high taxes and duties, lack of locally relevant content among others. Prices for broadband in India are 1200 times higher than in Korea, said Trai chairman Pradip Baijal. Broadband has been defined as an always-on data connection with 256 kilo bits per second of data rate.

In order to increase broadband penetration via very small aperture satellites and direct-to-home, Trai has suggested open sky policy, removal of various restrictions on size of antenna and throughput. It has also suggested reductions in licence and spectrum fees. Moreover, the authority has called for delicensing of spectrum bands used for wireless broadband technologies like Wi-Fi and WiMax.

The Business Standard adds:

The Telecom Regulatory Authority of India (TRAI) has asked for a reduction of customs duty on optic fiber cables and other supporting equipments for broadband networks to 5 per cent, a five-year service tax holiday for internet service providers and setting up of a group of ministers to push e-governance in order to bring in a quantum jump in internet usage in the country.

TRAI chairman, Pradeep Baijal said yesterday that he was hopeful that if the Centre accepted these recommendations on accelerating growth of internet and broadband penetration in the country, the rates for internet usage would come down to Rs 300 to 400 per month per subscriber from the current Rs 700.

He told reporters that by 2010, the Authority expects the total number of internet subscribers to jump to 40 million which would translate into a penetration level of 3.4 per cent from the existing 0.4 per cent, in the country.

The recommendations would be submitted to the department of telecommunications. These include liberalising the cable television market, by making Direct to Home and VSAT platforms interactive. This would reduce the cost of these services and create an open sky policy in the sector.

The Hindu writes about the current scenario:

On the ground, Indian customers now have multiple options to the dial-up Internet connection:

  • BSNL’s Direct Internet Access Service (DIAS) delivers speeds between 128 KBPS and 2 MBPS at distances ranging from 2.5 kms and 5 km from digital telephone exchanges.

  • Dishnet (its Internet business is now part of VSNL/Tata Indicom) pioneered the use of the Asymmetric Digital Subscriber Line (ADSL) technology where a telephone wire delivers always-on Net connection even while normal voice calls are made.

  • Cable TV network has a lot of unused bandwidth and its use to deliver Internet was pioneered by players like Hathway, In2Cable, Sify and Asianet. However the cost of the special Cable modem has proved a disincentive and various players are still juggling pricing options.

  • Another option that is being tried in housing colonies in many metros by new entrants like ZeeNext is to provide bandwidth in bulk via leased line to neighbourhood servers and then extend it to the individual houses or offices by Ethernet CAT cable.

  • Sify Infoway led in proliferating the neighbourhood cybercafe, first with broadband wired connections and then with WiFi. Indians for the first time could wirelessly connect to the Net from their own laptops.

  • On April 26, Reliance Telecom joined global players like BT and France Telecom to become the latest members of the WiMax Forum, a 98 strong partnership of telecom companies who hope to promote the new broadband wireless standard 802.16, which is theoretically capable of delivering connectivity at up to 70 MBPS and at distance of up to 50 kms compared to the 1-11 MBPS and few hundred metre range of today’s widely used Wifi standard, 802.11b. Only other Indian member is Sify.

  • Published by

    Rajesh Jain

    An Entrepreneur based in Mumbai, India.