But the achievement fell short of expectations and the policy initiative turned out to be a flop show. Against the government target of 20 million broadband subscribers by 2010, only 8.75 million connections have been provided by March end, 2010.
According to latest data released by the Telecom Regulatory Authority of India (TRAI), the watchdog of the telecom sector, though a number of companies are providing broadband services, the net broadband addition per month is just 0.1 million to 0.2 million in contrast to 18 million mobile connections per month. The broadband penetration is just 0.74 per cent compared with teledensity of 52.74 per cent.
Indeed, the government’s hopes ran high while announcing the policy six years ago as it worked on the premise that greater the penetration of broadband, greater would be the transformation in various sectors in the country. But poor infrastructure coupled with lack of proper policy initiatives have forced the government to take a re-look at its 2004 policy.
Internet and broadband services, besides helping take e-governance to the villages, enable growth in Information and Communication Technologies (ICT), which would in turn help the country become a competitive knowledge based economy.
Broadband and GDP
Research has proved that broadband services help increase the GDP. The World Bank report says, a 10 per cent increase in broadband penetration accounted for 1.38 per cent increase in per capita GDP growth in developing economies. This is much higher than the impact of mobile telephony growth on GDP.
“The primary inhibitors for broadband growth in the country are the lack of affordability and suitable infrastructure. The recent BWA (broadband wireless access) auctions are likely to enhance penetration of broadband across the country as it will overcome the limitation of high wireline infrastructure costs,” says Romal Shetty, Executive Director and National Head (Telecom) of KPMG.
The government can address the affordability issue by allowing private operators to leverage the infrastructure of public sector telecoms like BSNL/MTNL to ensure greater coverage at efficient costs, he says.
Currently, most of the broadband proliferation is taking place in the urban areas. There are 36.96 million wireline connections at the end of March 2010, out of which about 26.87 million connections are in urban areas.
In the market, as many as 104 service providers are providing broadband services.
Apart from Internet Service Providers (ISPs), Unified Access Service Licensees (UASLs), Cellular Mobile Service Providers (CMSPs) and Basic Service Operators (BSOs) are also permitted to provide broadband access under the existing licensing framework.
However, top ten service providers have occupied more than 95 per cent of market. Of this, 70 per cent of market is occupied by the state owned companies BSNL and MTNL underscoring the fact that majority of the service providers are unable to penetrate into the market.
Indeed, because of high investment and expected low returns, operators are hesitant to invest in small cities and villages or remote areas. In terms of infrastructure alone, TRAI believes that a rural fibre infrastructure to connect 3,75,552 villages will need a total investment of Rs 32,295 crore.
It is also a known fact that low literacy is a major concern for improving broadband utilisation. As per government data, the total English literate population is only 91 million and the total computer literates are only 87 million. Nearly 25 per cent of Indian population stay in cities, out of which, 32 per cent are computer literate.
“People in rural areas are not aware of how useful internet can be to them. Educating people and creating awareness about the benefits of computers and bringing in user friendly applications, may be in local languages, can also help,” says Deepti Chauhan, Senior Manager (Research) from Asit C Mehta.
Consultation paper
TRAI has sought suggestions from industry stakeholders with regard to simple software to enable the common masses to use the latest devices. Once a common user is exposed to broadband, there can be numerous applications to encourage masses to adopt broadband, says a consultation paper released by the TRAI.
Despite high utility and considerable demand, broadband services are not available to many citizens due to non-availability of required infrastructure. Though operators have created networks in the big cities, they were shunning the small cities and villages due to high investment and low returns.
“The quality as well as the speed of internet connections also needs to be improved. Of course, the WiMax auctions would help improve the broadband penetration. One of the key factors limiting the growth of broadband in India has been the constraint of last mile access. Therefore, unbundling last mile is what needs to be changed. Also alternative technologies need to be identified and efforts made to implement them,” says Chauhan.
Strategic plan
The Department of Telecommunication (DoT), which recently completed the Wireless Broadband Services auction, is now working on a strategic plan to increase the growth in this sector further.
“The government has decided to prepare a strategic plan for the DoT for the next five years. The plan will include key areas like various licensing issues, effective strategies for increasing broadband penetration, including in rural areas,” said Telecom Minister A Raja.
Pointing out that the growth of broadband will increase with the launch of 3G (third generation) and BWA (broadband wireless access) services, the TRAI consultation paper projects 5%, 20% and 40% households in the country to have broadband connections by 2010, 2012 and 2014, respectively.
National Broadband Plan
TRAI’s consultation paper on National Broadband Plan is posted on its website (www.trai.gov.in). All stakeholders may send their comments, preferably in electronic form, on the issues raised in the consultation paper by July 7, 2010. Comments will be posted on TRAI’s website and counter comments may be sent by July 15, 2010.
Initiatives in other countries
Australia: Government invested $ 3.8 billion in national broadband plan. Around 90 per cent of population shall be provided broadband access of 100 Mbps speed with fibre based network.
UK: Government invested $1.6 billion for development of network in rural areas.
Aim is to bring superfast broadband to 90 per cent of population. Private investment is expected to cover 70 per cent of optical fibre cost by 2017. Part funded by proposed landline duty of $ 0.8 per month on all fixed line in country.
USA : There is a national broadband plan to provide nationwide broadband, including rural areas. Government to provide $ 11.6 billion under various broadband programmes. Further $ 2.5 billion is made available for grants loan and loan guarantees.
Singapore: Next Generation Broadband plan started in 2006 with government subsidy of $ 0.7 million.
(Source: TRAI)
