Home Asia-Pacific III 2007 Broadband demand in India

Broadband demand in India

by david.nunes
Atul BindalIssue:Asia-Pacific III 2007
Article no.:8
Topic:Broadband demand in India
Author:Atul Bindal
Organisation:Bharti Airtel Broadband & Telephone Services
PDF size:344KB

About author

Atul Bindal is President, Broadband & Telephone Services at Bharti Airtel Ltd. He is a member of the Airtel Management Board and also chairs the Broadband & Telephone Services Management Board. Previously, Mr Bindal was Executive Director, South, for the Mobility Business and Group Chief Marketing Officer and Director of Mobility for Bharti Airtel. Prior to Bharti, Mr Bindal was Commercial Director, Asia-Pacific, with DHL and had served with AlliedSignal/Honeywell – he was VP & GM Asia, Middle East and Africa for their Power Systems Business when he left. Earlier, Mr Bindal worked in marketing, sales and general management with American Express, Lipton and Shell. Atul Bindal is a Mechanical Engineer from Delhi University, and a Post Graduate in Management from the Indian Institute of Management Calcutta.

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Broadband, increasingly, is the precondition of empowerment in today’s global economy. It is a fundamental human right for the 21st century. Worldwide, broadband is a powerful enabler and a catalyst for accelerated change for consumers, companies, organizations and nations. When fully deployed, broadband changes people’s behaviour and drives much more intense and productive use of information and communication technology, ICT, online content, applications and services. India, too, has realized that economies that adopt and absorb the benefits of broadband-enabled ICT services and applications quickly and deeply will achieve significant benefits in terms of productivity, innovation, growth and quality of life as well as discernible competitive advantage compared with economies that do not. To remain competitive in a globalised world, and to ensure the delivery of world-class public services, it is vital that the broadband opportunity be exploited to the fullest. Hunger for more broadband Today, India may still be struggling to reach the magic figure of nine million broadband subscribers that the Indian Department of Telecommunication had set as a target figure when it unveiled its Broadband Policy in 2004. However, there is a heartening piece of development that these figures mask. Despite the obvious shortfall, broadband growth in India has actually been on the rise in the past two years, with 18-fold growth from the early 2004 figure of just 48,000 subscribers. The total broadband connections in the country reached 2.47 million by the end of July 2007, with an addition of 0.05 million connections just in the month of July 2007. (Source: TRAI Report, August 2007.) This indicates that there has been rising demand, if not hunger, for broadband in India. While it is true that in Asia, India has one of the lowest broadband penetration rates, recent policy measures and government initiatives to promote broadband are expected to take the market to 30.1 million subscribers by the end of 2013 (household penetration rate is expected to reach around 8.9 per cent by 2013) and come close to the goal set by the government. (Source: ASSOCHAM and Frost & Sullivan Report on Broadband in India – 2007.) This growth is mainly driven by three factors, namely: infrastructure, access devices and content. In terms of infrastructure, digital subscriber line, DSL, is currently the major technology used in the country for broadband access and has been recognized as a preferred medium to deliver high-quality voice, data and video in a converged environment. Private and public sector players have already laid 695,124km of fibre backbone across the country. In terms of access devices, personal computer, PC, penetration in urban areas is increasing considerably with every passing year. Also, prices of access devices have fallen considerably as service providers roll out promotional campaigns that offer PCs and access at a bundled price of as little as US$10 per month. In terms of content, focus on localized content has now given way to data and multimedia-rich content for high-speed connections. Almost all broadband service providers have plans for superior content delivery, and not necessarily content development. Content developers and service providers have come together to provide live TV, Webcasts, telecommuting applications, streaming audio/video applications (VoIP, video conferencing), gaming, software on demand, remote education, telemedicine and entertainment to name a few. The varied content has become a major driver in urban markets, as these applications pull new customers and lead the current ones to migrate from narrowband to broadband. Broadband for rural India Broadband isn’t only about electronic game or video streaming. For India, it is also a tool for more high-impact public initiatives such as e-governance and e-education. India has the lowest tariffs in the world and easily affordable telecom products to help telecom services reach every corner of the country. Despite this, although urban tele-density is 35 per cent, rural tele-density is still extremely low. The next phase of India’s telecom growth, therefore, will focus upon its rural hinterland. This rural hinterland consists of over 600,000 villages, of which approximately 27,000 villages are not connected by either road or rail and have no power connections or telecom facilities. This is where the real hunger for mobile and Internet telecom services exists. To satisfy this hunger, the government of India has set several targets for itself and for the Indian telecom industry: • 150 million rural mobile phone subscribers by 2010, up from the current 30 million; • 8,000 telecom towers to be set up in rural areas within the current calendar year as part of the first phase; and, to • connect 100,000 villages through broadband and provide educational institutes, police stations and public health centres with broadband Internet services. From India’s perspective, broadband is the ideal technology platform to connect such a geographically diverse country and deliver the promise of convergence to continue develop and progress in today’s information-based global economy. Various government projects and corporate initiatives are driving the growth of broadband in rural India. Some of the projects/initiatives undertaken by the government and major multi-national and Indian companies are: • E-choupal, an attempt by ITC, India’s largest tobacco company, to connect the urban India of rapid growth and a world-beating information-technology industry, to the rural one, where 72 per cent of Indians live, many of them in feudal poverty; • Project i-Shakti, which is Hindustan Unilever Limited’s Internet-based rural information service, is a radical new way of reaching India’s rural consumers in an adaptive two-way dialogue; it has tremendous business as well as social benefits. It is an electronic platform that offers easy access to information and solutions on issues of key consumer importance such as health, hygiene, agriculture, veterinary advice, entertainment, education, etc; • Project Saksham: an endeavour by Microsoft India to enter rural markets and help spread IT in areas that remain untouched by technology. Driven by India’s mission of building a digitally inclusive society, Project Saksham is geared to set up rural kiosks, based on public private partnerships in around 200,000 villages; • Kisan Soochna Kendras: an initiative by Jaikisan (an NGO) to establish Kisan Soochna Kendra (multi-purpose business hubs) in the villages of India and by the end of year 2007, under an MOU with the Government of the State of Uttaranchal, put up over 3,000 Kisan Soochna Kendras in the State. Broadband has been modestly defined by the Indian telecommunications regulator as any ‘always-on’ connection that offers an Internet download speed of a mere 256 kilobits per second (kbps) – a far slower service than the ones that customers in the West might be used to. Still, for India’s rural population, it is likely to be worth the wait as their productivity and earnings will rise with the entry of even such modest broadband services. Village accountants in the southern province of Karnataka, the capital of which, Bangalore, is globally known for its software exports, are using handheld computers to capture crop patterns, reducing the time the government takes to collate such information from one year to 30 days. As connectivity spreads, farmers will be able to access the updated land records they need to get bank loans via the Internet. According to a February 2006 report of the US Department of Commerce, broadband adds about 1-1.4 per cent to the employment growth rate and about 0.5-1.2 per cent to the growth of new establishments. That would be a victory for Adam Smith’s invisible hand, a blow to all those who say markets don’t work for the poor and a testament to the wide-ranging benefits that growth in broadband services would bring.

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