India Broadband Report, March 25, 2005

By Dr. Abhishek Puri

Real nirvana he can find, but Dr. Abhishek Puri is waiting for broadband nirvana. Hopefully one day he will buy a Mac and surf at 100 megabits per second. Meanwhile, he will suffer slow speeds and keep us entertained and informed. This is a once a week column. – Om

Broadband Madness: After making its geeks go through broadband equivalent of chinese water torture, Indian telecom and broadband providers have suddenly decided its time to open the pipes a little wider. What prompted them on a nation wide roll out now? Two reasons — the landline and wireless voice revenues are going south faster than hopes for a cool summer. They have realized data is the only way to survive. Ironically, the internet service provider is open to 100 percent foreign investment, and ISP licenses to be had for less than a penny. Still no takers! (Sky Dayton , are you listening!)

Less than 256 kbps is not broadband: In what is supposed to be far reaching decision by Telecom Regulatory Authority of India (TRAI) it mandated that speeds less than 256 kbps are not to be marketed as Broadband. It was seen that companies like Sify, Airtel and Tata’ s were marketing connections of 32,64 and 128 kbps as broadband. Would this have any effect on the telecom companies? I have my doubts. Post TRAI’s order, Tata’s were quick to add that 128 kbps should not be counted as broadband but refused to upgrade the speeds. For Airtel that offers it’s services as Airtel Broadband, there is a lacuna here. They would still market their slow 64kbps and above under the same brand name. It is the end consumer who looses out in the bargain. I believe that much more prudent step would have been to ban these telecom companies from selling anything less than 256 kbps.

Bollywood on Demand: Since Indian cable sector is disorganized and consumers have been weaned on flat rate monthly fees, premium channels and video on demand did not make much economic sense in India. But ADSL changes all that. ADSL gives an excellent platform for the introduction of the streaming video and content. Only getting content is not that easy even for state owned BSNL which is struggling to get TV networks on board. Reliance, apparently is facing similar challenges in getting entertainment channels on board which might be the real reason for their nation wide triple-play roll out.

Indian Telecoms head to the hinterlands: Like rest of the world Indian telecom and broadband providers are chasing the urban consumer, ignoring the rural consumers and smaller towns where demand is growing in parallel with economic affluence. Despite the madatory requirements in their licences, telecos have refused to address the crying need for infrastructure there. Being risk averse, they chose to concenterate on the bigger cities where they could ramp up numbers. But not all is lost, and there might be some positive developments for the rural India. TRAI has set up Universal Service Obligation fund where in the operators had to give 5% of their revenues to the same. Part of the funding was done from the Consolidated Fund of India (a black hole as far as tax payer’s money is concerned). Despite the financial incentives, it was only last week that BSNL, Reliance and Tata’s won the contracts for setting up infrastructure in the underserved areas. It is convienient to forget that BSNL was mandated to do just that, though it waited nearly 50 years to get around to meet its obligations.

Call Center Cool: The big towns are too expensive to live, and as a result the call centers are moving to tiny towns like Mohali (Read Dell-jit) Wipro is now looking at Calcutta (given that commies have turned over a new leaf and embracing capitalism. It means folks in these towns would have nice disposable incomes which means they can afford to buy a PC and broadband.

Fiber in every village: A recent Economic survey says that Optic Fibre had reached every nook and corner of the country. BSNL owns major part of the same.