Broadband base is 1 crore but growth is still slow

(Trai defines broadband when the minimum download speed of the internet is 256 kbps.) The latest figure depicts a growth of 42 per cent over 7.21 million achieved at the end of the same month a year ago.

The big jump in number, however, does not tell the real story that by all parameters India’s broadband penetration has been pathetic. In a country with a population of 118 crore and with spectacular growth in mobile telephony reaching 70 crore subscriber base, one crore broadband subscribers is extremely low.

Worse, even those having broadband access use it sparingly. Trai data shows that the average broadband use in the quarter ending June 2010 was only 389 minutes or 6.5 hours a month. Of the approximately 17 million (fixed) internet subscribers, only 10 million are broadband users. This implies that India still has a long way to go in terms of achieving the original target of 20 million broadband subscribers by the end of 2010, as was set out by the Broadband Policy 2004.

No wonder, of the 165 internet service providers (ISPs) only about 6 have some meaningful number of subscribers and within that the state-owned BSNL with 5.82 million users occupies 58 per cent of the market. Poor internet penetration is bad news for a fast developing country like India as it has been seen worldwide that economic growth and affluence also depends on the spread of internet usage.

Many factors

The latest KPMG-Ficcci report on Indian telecom industry pointed out that there are several reasons why broadband penetration is poor in the country. The most important one is the poor reach of optical fibre cables (OFC), the main carrier of internet connectivity. Laying OFCs under the ground is expensive and the cost can be justified only if the volume of usage is very high. This is why only BSNL, the oldest telecom company in the country, has the widest OFC network installed over many decades.    

Inadequate wireline infrastructure has resulted in the ‘last mile’ challenge in providing access, the report stated. The absence of local loop unbundling (LLU) further restricts competition in this space by not allowing a regulatory framework wherein alternative service providers can use the existing local loop of licensed service providers to offer broadband services. “Both these factors have predominantly undermined the growth of fixed broadband services currently being provided using DSL technology,” said the report.
Yet another reason is the high infrastructure cost at the subscribers’ end. One will have to have a personal computer (desktop, laptop or netbook) and also pay for the modem and installation expenses. On top of this, the rates charged by ISPs are considered to be high as the average monthly broadband bill ranges between Rs 750 and Rs 1,000 per subscriber - a far cry compared to the average monthly revenue of Rs 135 earned from GSM mobile subscribers.

3G push

As the government has recently awarded 3G licenses to many telecom companies, Trai hopes that the spread of broadband will now ride on the high speed 3G services as the GSM technology allows wireless connectivity which is less expensive than wired lines. As companies rolling out 3G services in some part of the country claim that their network can support an average download speed of around 7 mbps, broadband users are discovering many new usages like video chat, movie and music download and watch live TV in a jiffy.