Will the National Broadband Growth will it be on target

-         P N Chopra

Though over the past six month, the broadband subscriber base has grown on an average rate of over 20 per cent per month compared to around 4 per cent growth rate for mobile phones in the same period, it still seems rather difficult to make it to one million mark by the end of this calendar year,

Present Status of Broadband in the country

Player   

Customer base

Technology

Lowest Package

BSNL

1.75lack

DSL

Broadband, at 256 Kbps and 0.4 GB download for Rs 250 a month. No security deposit.

Sify

1.0 lack

Cable

Broadband at 256 Kbps and 1Gb down load for Rs 550 a month

Bharti

1.8 lack

DSL

Broadband at 256 Kbps and 375 Mb down load for Rs 349 a month

.Will Broadband Growth be as per target?  The Asia-Pacific telecommunications market grew by 5.7 percent in the last two years, according to an expert study, and it was planned that broadband penetration would reach 26 percent of households in the region by 2008.While TRAI recommended unbundling of the last mile for broadband, the Broadband policy stated that ”last mile copper loop is not a bottleneck for broadband services”, though it recorded that about 7 million copper pairs of the incumbent were suitable for broadband so far, less than 4 per cent of these have been put to use for broadband .In November 2005  there were 6 lac  odd broadband subscribers translating into one fifth of the target of 30 lac for this year. Though over the past six month, the broadband subscriber base is rising on an average growth of rate of over 20 per cent month on month compared to around 4 per cent growth rate for mobile phones in the same period, it still seems rather far to make it to the one million mark by the end of this calendar year.

    Broadband is fast becoming the household name in India. Each and every home is getting hooked on to the kbps zone. The tariff is getting cheaper every day, Accessing your bank balances right from your bedroom, booking airlines and railway tickets as well as your favorite hotel, catching singing live on your concert, shopping from your favorite shop online, as well as complex financial management of your stock market investments is now only by just a click. With broadband speeds getting faster by the day and rates slashing because of the competition, more and more users are hooking on to the broadband technology Broadband-which is nothing but a high bandwidth connection to the home-has become a common method of sending video, audio and data files. It enables you to complete mundane jobs like paying electricity bills etc.

    Let us see the emerging scenario in the country (See Chart at the top of the page) In the past six month only, as many as four lakh subscribers have signed up for their broadband connections. Companies like MTNL, Sify, BSNL and Bharti are trying their best to lure customers, with new attractive and cheaper broadband packages. Services are being xpanded and improved. Companies like Microsoft, HCL and BSNL are joining hands to make broadband a household name. Notably, BSNL is targeting one million subscribers by the year end (2005) and six million by the year 2007.

    Companies are focusing and investments are being made to make broadband a reality. Bharti is doing a pilot project for triple play, which will enable voice, broadband and cable all through one common cable. MTNL is also trying hard to ride the broadband bandwagon. Frost & Sullivan, a consultancy firm, estimates that investments in broadband to around Rs 1,767 crore in 2004. The government has realised that broadband is the next real big thing in telecom. An ambitious target of 40 million Internet and broadband subscribers has been set for 2008.

    The broadband policy 2004 provided a real boost to the sector. The TRAI recommendations helped reduce the cost of leased line (a key cost component and the delicensing of spectrum usage encouraged the use of wireless technology for broadband. Apart from that several other complementing factors have also helped the broadband cause. The prices of alliance regional languages and the HCL-BSNL-Microsoft alliance will take broadband growth story to a new level.

    Unbundling will not only ensure more choice to the end-users but will also enforce the incumbents to be more agile and responsive to customer needs. Everywhere in countries such as Japan, the UK, France and even Korea-broadband access was accelerated thanks to unbundling. The US is an exception in the sense that the unbundling hit the bread and butter of telephony service of the incumbent. ISPs have been championing the cause of competition in this sector.

    Broadband is the centerpiece of the communications minister’s 10-point agenda towards using information and communication technology to enhance national competitiveness. Thus, we need to ensure effective and sustained c ompetition in broadband access through transparent, effective and definitive mechanism for unbundling.

    In comparison to the above facts broadband is providing to be a bitter money churner than GSM for the government-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL). Broadband has average revenue per user (ARPU) of Rs.600 per subscriber compared to that of Rs.375 for GSM mobile services. BSNL added 50,000 subscribers in October 2005 and has achieved a subscriber base of 12 lakh. MTNL has a total subscriber base of 73,000 in the two metros-Delhi (39,000) and Mumbai (34,000). MTNL plans to add 5.5 Lakh subscribers by the end of this financial year; MTNL is looking to have an annual revenue of over Rs.1000 crore from broadband services, while BSNL would have a capacity that would have annual revenue of Rs.1,800 crore from broadband services from next financial year. Both BSNL and MTNL believe that broadband demand would accelerate in next few months. We believe that there would be no computer without broadband connection. We have a subscriber base of four crore for landline telephones. Out of the same at least one-crore would be the subscribers of  broadband services,’ said the expert from BSNL. MTNL and BSNL have made huge investments in landline networks and account for more than 95% of the total landline telephones in the country. Therefore, they are well placed to provide broadband connections using ADSL technology for providing broadband services, an operator need copper network till the customer’s promise. Broadband is turning out to be a big revenue source for the two PSUs. MTNL launched its broadband services commercially in April 2005. In seven months, it has managed a subscriber base of 1,10,000. The company has slashed tariffs for its broadband services to Rs.199 per month for 400 mbps of download. BSNL is adding 4,000 connections per day. It is also expanding its network very fast and the company has already covered 200 cities.

    A Dot committee mandated to formulate the new telecom policy is of view that the copper loops of BSNL MTNL should be unbundled on revenue share basis. However, it is not yet decided as to how the; revenue would be shared between BSNL and MTNL and the private operators. The committee feels that this would help stimulate growth.

    Inspite of all the effort the growth rate is rather slow and it is difficult to fathom how we are going to meet the planned target of 3 million by the end of 2005.

    The Telecom Regulatory Authority of India (TRAI) in the beginning of November, 05 asked the government to reconsider its; proposal to unbundled local loop and offer incentive to bring down the cost of access. The move comes in the wake of the slow takeoff of broadband services with only 0.61 million subscribers signing on as against a target of 3 million.

     As per the policy set out by the government in October 2004, a target of three million broadband subscribers was to be achieved by end 2005 by all services providers and half of that target was to be achieved by PSU operators.

     But according to the process report submitted by them, only 0.61 million Subscribers had taken broadband connections by September 2005, of which 0.26 million are with PSUs: and 0.5 million with the private operators. 'The actual achievement by various operators together is much below the policy target of three million by December 2005 which is likely to be missed.' it said. Trai has asked the department of Telecom to review some provisions of the broadband policy, it said in a statement. The government has already rejected the Trai's proposal to unbundle local loop, which would have allowed the private operator access to BSNL and MTNLs over four crore fixed line subscribers. The last-mile broadband access in the Metropolitan Area Network (MAN), performance wise is comparable to traditional cable, DSL or T1 offerings. IT will provide a wireless alternative to cable, digital subscriber line and T1, E1 for last mile broadband access. It will also be used for connecting 8.2.11 (Wi-Fi) hotspots to the Internet.

     For users, Wi-MAX will mean more broadnand access choices, paraticularly in urban centres hwere building access is difficult, in the suburbs where the user is too far from the central office and in rural areas which have poor telecom infrastructure. Unlike Wi-fi, which provides access within a limited area (300 ft), its big brother version provides upto 10 km of service area range. It provides total data rates of upto 280 Mbps per base station, enought to support thousands of users. WiMax solutions will hit the market shortly.

     Experts belives that a majority of people will access the INternet through the wireless technology in the future, While stating the relevance of these technologies, they feel that Wi-Fi and Wi-MAX will work together to 'enable companies to reach out;. It is necessary to underline the potential of these technologies for developing countries like India where the traditional wire line infrastructure is yet to reach. IT products are falling gradually, with the cheapest PC today coming for just Rs.10,000. The lunch of software.