The Hindu Business Line : The rush to connect

After having exited the booming cellular business in India, why are the world's top telecom companies such as British Telecom and US based AT&T returning to the Indian telecom services market? Why is Videsh Sanchar Nigam Ltd, the company that brought Internet to India, no longer focusing on the dialup Internet segment?

The answer to both questions is `broadband'. And if you are among those who wonder why these multinational companies are laying their bet on something that has not caught on in India, check out these facts:

The broadband subscriber base in India has crossed 13.1 lakh as of March 2006, which is a whopping 400 per cent growth compared to 1.8 lakh broadband subscribers the previous year. Though these numbers still fall short of the target, the Ministry of Communications is confident of garnering the projected broadband subscriber base of 20 million by 2010. The number assumes significance when one looks at projections of developed nations. For instance, Australia hopes to reach only 5.9 million broadband users by the end of the decade.

The next big thing

Broadband is a connection with download speed of 256 kbps or more. Internet surfing or downloading is much faster compared to a dialup (56 kbps) or any other narrowband connection. While industry analysts admit that the initial response has been sluggish in India, broadband is however now being touted as the next big thing in telecom that would touch the lives of a farmer in a remote village as effectively as a high flying corporate executive. And the reasons for this optimism are not misplaced.

For one, both the Communications Ministry and the Telecom Regulatory Authority of India have given top priority to the task of taking broadband to even the deepest corners of the country. The recent decision to lower the national long distance licence fee to Rs 2.5 crore has attracted nearly 10 new players in the segment, including public sector utility behemoths such as RailTel and GailTel. Almost all of them have plans to make a beeline to the retail broadband segment, which means that this sector is poised to see some cutthroat competition to reach the next subscriber.

The second and the more important reason is that operators themselves are now exploring broadband technologies and devices beyond the traditional copper telephone cables connected to a personal computer (PC). Until now one of the major bottlenecks in the spread of broadband was poor PC penetration combined with the fact that 95 per cent of the country's copper cable network is with the State-owned Bharat Sanchar Nigam Ltd, which is in no mood to share the infrastructure with other players. So, while BSNL is rolling out its broadband services using ADSL (Asymmetric Digital Subscribers Link allows use of copper telephone pairs to provide a broadband connection with speeds of over 512 kbps. It provides `always-on' Internet connection that is automatically established once the PC and DSL modem are switched on.) other operators are exploring wireless technologies such as the Wi-Max (Worldwide Interoperability for Microwave Access), High Speed Downlink Packet Access (HSDPA) and Gigabit-capable Passive Optical Network (GPON) on devices like the mobile handset and the television.

(WiMAX is a wireless technology touted to be the prime mover of broadband. It helps deliver last-mile wireless broadband access as an alternative to cable and DSL. Can deliver up to 70 Mbps and ideally suited for rural areas. Meanwhile, GPON is set to bring in a scorching speed of over 1 gigabit per second delivering IP video services and high definition TV.BSNL has already floated a tender for procuring GPON equipment.)

Beyond BSNL's copper

Agrees Nripendra Misra, Chairman, TRAI, "Even if all the copper were to be used we would reach only five million subscribers. So we have to look at wireless technologies such as Wi-Fi for propagating broadband services. Private operators have already taken up the challenge and are charting out their own roadmap without depending on BSNL's copper."

Though global reports suggest that ADSL accounts for seven in ten of all broadband lines in the world, going by the initial interest, however, Wi-Max could emerge as the biggest mover of broadband in India. The Government-sponsored joint venture between Alcatel and C-DoT is working on a research centre in Chennai exclusively for Wi-Max broadband solutions. Wi-Max can provide data rates of up to 70 mbps over distances of up to 50 km and is best suited for rural broadband services. Most operators including Airtel, Sify and VSNL are exploring this technology.

`Fibre in the sky'

On the other hand, US-based networking major Hughes Networks is offering broadband based on satellite technology. Pranav Roach, President, Hughes Networks System India, said, "We are positioning ourselves to leverage on the country's growing telecom market. Hughes will use `fibre in the sky' — satellite bandwidth — to connect the areas not covered by other operators so far." The company is increasing its share in the Indian joint venture, Hughes Escorts Communication Ltd, to 74 per cent from the current 49 per cent. Roach said satellites offered a cost-effective way of reaching far-flung places when compared to terrestrial networks.

And if that were not enough for technological choices, Tata-managed VSNL, which was once the market leader in dialup Internet access, is now aggressively promoting broadband through TV cables. N. Srinath, Executive Director, VSNL says, "We are tying up with cable operators across the country to reach the end consumer. We are making investments wherever the cable operators' network needs augmenting and this includes laying our own cable." VSNL has already partnered 2,000 cable service providers to provide the last-mile link for its broadband services.

The `café' culture

Moving beyond the retail households, Sify, the largest private Internet service provider, is now expanding its iWay cyber-cafe chain to 153 cities with the addition of 58 new cities last year. The company added 836 new iWays during the year, averaging more than two cafes a day. Sushil Luniya, Vice President, Access Media, said the company wants to take broadband connectivity to the masses, not just in the urban centres but across smaller cities and towns."

Meanwhile, BT is scouting for an Indian partner to foray into the long distance segment along with Internet and broadband. One of the biggest broadband players in Europe, BT is awaiting regulatory clearances for its plans in India, where it had first entered as a joint venture partner with Bharti to offer cellular services in Delhi.

Interestingly, there's also a new breed of operators emerging on the scene — pure play broadband operators. With a low-cost business model and rock-bottom tariffs, companies like Aksh Broadband, Pacenet, Dishnet DSL and Hathway are becoming household names and taking on the might of large telecom players like BSNL, Bharti and Reliance.

Chennai-based Dishnet Wireless is betting big on WiFi. The company plans to cover hotels, restaurants, cafes, airports, railway stations, shopping malls, convention centres, educational institutions and public locations in big cities.

Networking rural India

Aksh Broadband, for instance, plans to tie up with State governments to connect rural India with a 1-Mb broadband connection for Rs 100 a month. The company has already entered into an agreement with the Andhra Pradesh Government to connect all the mandals and government offices in the State. The Rs 400 crore project envisages laying one lakh km of optic fibre cable across the state.

"We want to reach out to rural India to provide broadband connectivity with triple play capabilities at affordable costs. After Andhra Pradesh, we will be looking at Haryana, Kerala, Assam and Jharkhand. We have sent our proposal to the respective State Governments," said Y.L. Agarwal, Managing Director, Aksh Broadband Ltd.

Experts, however, say that wireless technologies like Wi-Max and 3G mobile technologies will drive broadband growth in the country since the network rollout is less expensive and faster compared to wire line technologies. Says Mr Ruchir Godura, Senior Vice President, Marketing, Telsima, "Of the 50 million copper lines in the country only 10 per cent has capacity to carry broadband. If we have to meet the target of 20 million broadband connections by 2010, at least 50 per cent of this will have to be on wireless technology. At the moment Wi-Max seems to be the ideal solution."

For the consumers all this means more choice not just for operator but also a choice of technology and the device they want to access broadband on. With more operators slugging it out to take a larger share of the pie, consumers can look forward to falling tariffs. Already one can get a 256 kbs broadband connection for as low as Rs 199 a month, making it cheaper than the dialup Internet. It is estimated that globally there are 200 million broadband users, which according to researchers at In-Stat is expected to top 400 million by the end of 2010. This means that India will have a 5 per cent market share of the global broadband business in four years time. A mouth-watering proposition and this time, if the approvals come through BT may hang around the Indian market for a long time.

tkt@thehindu.co.in