One of the most misused words in the telecoms
arena still remains ‘broadband’. And why not when most Indians (even
companies to an extent), still define broadband as faster connectivity to
net than traditional dial-up connection.
Broadband can play a crucial role in the GDP growth of a country. The
availability of the net, telephony and video on demand at low prices mean
that distance education, telemedicine, teleworking and research will become
easier. This means transaction cost for businesses will go down leading to
overall gains in productivity.
Studies conducted in world’s largest broadband markets like Japan, Korea and
US clearly show that it is household penetration that set fire in the
market.
With the all-in-one concept, demand for uninterrupted entertainment and
gaming grew which meant fatter pipes, therefore broadband. The positive
impact of this higher penetration reflected on per capita GDP of these
respected countries.
A paper submitted by TRAI in April 2004 state that over 30 per cent of
Korea’s GDP or $148billion were transacted on the net.
Back in India, known names like Hathway, Siticable, RoltaNet et al invested
close to Rs 51,000 crore and laid five lakh optic fibre pipes with the idea
of selling video, music, net and telephony at Rs 1,000 – Rs 1,500 per month
but was left with their back onto the wall.
With only about 1,00,000 subscribers logging in for their services, the
road ahead seemed foggy. As of now broadband penetration in India is just
around 0.02 per cent, which is two per 10,000 people.
Earlier in April 2004, Confederation of Indian Industry (CII) and Telecom
Regulatory Authority of India (TRAI) released some research papers, which
said that both state-owned Bharat Sanchar Nigam Limited (BSNL) and Mahanagar
Telephone Nigam Limited (MTNL) have to open up their doors as statistics
obtained proved that between them they own 98 per cent of fixed phone wires
that connect 42 million subscribers.
The report revealed that entering 10 million homes without the help of the
state-owned operators would cost close to $9billion (Rs 40,500 crore) and
three years flat with DSL technology.
If cable wires which gives two way broadband are laid it will estimates
around $3billion (Rs 16,200 crore). But if the sleeping giants (read BSNL
and MTNL) wake, it will cost around only $2billion (Rs 9,000 crore).
Following the facts and figures quoted by CII and TRAI, both BSNL and MTNL
recently announced their broadband plans. According to reports, both plan to
roll out their services from January 15, 2005 at Rs 500 per month. While
MTNL will launch their services in Delhi and Mumbai, BSNL will do it in
Kolkata, Bangalore, Chennai and Hyderabad on the same day.
The government is targeting around 10 million broadband service users by the
year 2007 and it hopes to follow the success story of mobile telephone
services revolution in the country.
Though the broadband connection at 256 Kbps costs Rs 3,000 in the market,
the PSUs have agreed to provide the same services at Rs 500 a month.
While VSAT could be used as small hubs, the government is also allowing
DTH operators to operate broadband Internet and uplink after fulfilling
necessary licensing conditions. The government is also relaxing the
conditions for outdoor use of frequencies to promote Wi-MAX and Wi-Fi.
The government has also decided to encourage and make small operators of
Cable TV to depend on the big players, such as BSNL, MTNL or any other
private players, and make use of broadband for their customers.
To reach the target of 10 million broadband connections by 2007, there are a
couple of things that has to be taken care of. Things like requests by
India’s telecom majors for cutting the import duties on broadband gear to
lower costs and boost usage will play a crucial role in the future of
broadband in India.
Gartner Dataquest forecasts that broadband Internet accounts will total
68.5 million or 58 per cent of all accounts by 2008. Let’s hope 2005 will
see the start of a new revolution.
|
