Home Page ContentPress Releases TELECOM REGULATORY AUTHORITY OF INDIA Recommendations on National Broadband Plan

TELECOM REGULATORY AUTHORITY OF INDIA Recommendations on National Broadband Plan

by david.nunes

8th December, 2010
New Delhi-110002.
India today stands at the threshold of great opportunities. A growing and
robust economy, a young and increasingly literate population and wide
technological base give it the opportunity of emerging as a major power. At the
same time, it faces the challenges of reducing poverty and inequity. World over,
it has been recognised that Information and Communication Technologies play
a significant role in bridging the divide between the poor and the non-poor. In
our country, while voice communication has, doubtless reduced isolation, the
penetration of Internet and broadband has remained low, mainly due to a
limited spread of wireline telephones and non availability, so far, of Broadband
technologies. With the launch of 3G services, the stage is set for rapid spread of
Broadband. At the same time, there is an urgent need for a nation-wide
Broadband network to reach Education, healthcare, banking and other services
to all the villages. Such a network would truly help in realising the objective of
inclusive growth.
It is in this context that TRAI had initiated efforts, in July, 2009, for the
spread of broadband in the country. In May this year, again, it has launched a
Consultation Paper on the National Broadband Plan which has received wide
and enthusiastic response from all stakeholders. Based on the Consultation
process, TRAI has formulated the present Recommendations suggesting a
National Broadband Plan, to be executed by the year 2013. It is, doubtless, a
formidable task but a task that can be achieved.
(Dr. J.S.Sarma)
Chairman, TRAI
INTRODUCTION…………………………………………………………………… 1
ANNEXURE – I……………………………………………………………………142
ANNEXURE – II…………………………………………………………………..143
1. The Eleventh Five Year Plan(2007-12) of India highlights the need for
inclusive growth. In the Foreword to the Eleventh Five Year Plan
document, Hon’ble Prime Minister emphasised the need to ensure that
growth is widely spread so that its benefits, in terms of income and
employment, are adequately shared by the poor and weaker sections of
our society. For this to happen, the growth must be inclusive in the
broadest sense. It must occur not just in our major cities but also in our
villages and small towns.1
2. Although only the 11th biggest economy in the world, India is the second
fastest-growing behind China. According to a study by Morgan Stanley,
driven by a sterling demographic dividend, continuing structural reform
and globalisation, India is poised to accelerate its growth rate to 9-9.5%
over 2013-152. The underlying assumption in continuation of the growth
story is that growth-supportive policies are continued to be implemented.
The bottlenecks needs to be identified and measures initiated to ensure
that the country brings on board a very large percentage of its population
currently living in destitution.
3. The UN Summit on the Millennium Development Goals, from 20-22
September 2010, concluded with the adoption of a global action plan to
achieve the eight anti-poverty goals by the 2015. The eight goals agreed
to by the members are to: Eradicate extreme poverty and hunger,
Achieve universal primary education, Promote gender equality and
empower women, Reduce child mortality, Improve maternal health,
1 Planning Commission: Eleventh Five Year Plan (2007–2012), Foreword
2 http://economictimes.indiatimes.com/news/economy/indicators/India-to-become-worlds-fastest-growing-economyby-
Combat HIV/AIDS, malaria, and other diseases, Ensure environmental
sustainability & Develop a global partnership for development.3
4. Information and Communication Technologies (ICTs) are part of MDG
and have an impact on other MDGs. Target 18 of goal 8 mentions the
following: In cooperation with the private sector, make available the
benefits of new technologies, especially information and communications
technologies. Table 1 shows some examples as to how ICT can assist in
achieving other MDGs4. According to UN availability of broadband is
important for making important applications available to the population.
To quote from The Millennium Development Goals report, 2010 available
on the UN MDG website “.. a challenge in bringing more people online in
developing countries is the limited availability of broadband networks.
Many of the most effective development applications of ICT, such as
telemedicine, e-commerce, e-banking and e-government, are only
available through a high-speed Internet connection. But a significant
divide exists between those who enjoy fast access to an online world
increasingly rich in multimedia content and those still struggling with
slow, shared dial-up links.”
Table 1: How ICTs can help achieve the MDGs
Goal/Target Role of ICTs
1. Eradicate extreme
poverty and hunger
Increase access to market information
and reduce transaction costs for poor
farmers and traders
2. Achieve universal
primary education
Increase supply of trained teachers
through ICT- enhanced distance training
3. Promote gender
equality and
empower women
Deliver educational and literacy
programmes specifically targeted to poor
girls and women using appropriate
4. Reduce child Increase access of rural care-givers to
3 United Nations: The Millennium Development Goals report, 2010
4 Source: ITU: http://www.itu.int/ITU-D/ict/publications/wtdr_03/material/ICTs%20&%20MDGs.pdf
5. Improve maternal
6. Combat HIV/AIDS,
malaria and other
specialist support and remote diagnosis.
Enhance delivery of basic and in-service
training for health workers.
Increase monitoring and informationsharing
on disease and famine
7. Ensure
Remote sensing technologies and
communications networks permit more
effective monitoring, resource
management, mitigation of environmental
5. Experts are of the opinion that the impact of broadband on the GDP is
much higher than any other ICT. According to World Bank a 10%
increase in broadband penetration increases GDP of a developing
country by 1.38%. It is therefore natural that countries are concerned
about creating a robust broadband infrastructure that would sustain
high growth of broadband services. The inclusive potential of ICT is
evident at two levels: the benefits that it brings to poorer communities
and the capacity of individuals within these communities to participate
in new economic opportunities. ICT, particularly broadband, is,
therefore, seen as a powerful tool for inclusive growth.
6. ITU’s ICT Development Index (IDI) captures the level of advancement of
ICTs in many countries worldwide and compares the progress made in
bridging the digital divide. One of the main objectives of the IDI is to
measure the development potential of ICTs, or the extent to which
countries can use ICTs to enhance growth and development, based on
available capabilities and skills required to make effective use of ICTs
and enhance their impact. India stands at 117th position (out of 159
countries) in global ICT development index (Annexure-I)5 . In its
‘Measuring the Information Society 2010’ report released in February this
year, ITU stated that most poor countries rank at the low end because of
5 ITU- Measuring the Information Society 2010
the close relationship between ICT uptake and national income.
According to ITU, while high-speed Internet access is now available in
almost all countries, fixed broadband penetration in the developing world
remains as low as 3.5% compared to 23% in developed countries.
7. According to estimates by Indicus Analytics, by the year 2020, the 244
million households would have increased to about 288 million across
rural and urban India. Those households earning less than 75000 per
annum will fall from 23 million to less than 12 million in urban India
and from 96.7 million currently to less than 77 million in rural areas. If
we look at the projections for consumer durables penetration, more than
80% of households are expected to have TV, 2 wheelers, Refrigerator,
electric fan and Air coolers by the year 20206. It is also common
knowledge that the size of middle class is increasing significantly with
the result that purchasing power is increasing.
8. The Indicus Analytics report further states that, by the year 2020, Health
care expenditures will grow rapidly, and so will those for education. But
it will be recreation and communication that will drive household
expenditure the most (Table 3). The Indian household will move more
and more towards lifestyle enhancing expenditures7.
Table 3: Expenditure of Households: Services10
2000-01 2009-10 2019-20
Medical Care & Health Services 12% 11% 9%
Transport & Communication 36% 31% 25%
Personal Transport Equipment 2% 2% 1%
Operation Of Personal Transport
11% 7% 4%
Purchase of Transport Services 20% 15% 9%
Communication 4% 7% 10%
Recreation, Education & Cultural 9% 10% 11%
6 India 2010 to 2020, Indicus Analytics, December 28, 2009
7 India 2010 to 2020, Indicus Analytics, December 28, 2009
Education 5% 5% 4%
Others 4% 5% 7%
Miscellaneous Goods & Services 21% 24% 27%
Household Services And Durables 100% 100% 100%
Source: Expenditure Spectrum of India, 2009-10, Indicus Analytics
ICT role in development
9. Economy of the country and ICT has a recursive relationship. They help
each other grow. However, this does not happen by itself. Appropriate
measures need to taken to ensure that the window of opportunity is not
lost. Broadband is by far the most important element of ICT today,
having the largest impact of GDP. Broadband enables improved
performance of ICTs which in turn have a fundamental impact on the
way economies work and contributes to productivity growth by
expanding markets, increasing business efficiency and reinforcing
competitive pressure. Relative to other historical general purpose
developments, such as railways and electricity, the impacts may be
larger and materialize more rapidly. Broadband infrastructure enables
country-wide facilities like health care, education, energy, job training,
civic engagement, Government performance and public safety. As per the
World bank, in low- and middle-income countries every 10 percentage
point increase in broadband penetration accelerates economic growth by
1.38 percentage points—more than in high-income countries and more
than for other telecommunications services. In a similar study,
McKinsey & Company estimated that ―a 10 percent increase in
broadband household penetration delivers a boost to a country‘s GDP
that ranges from 0.1 percent to 1.4 percent.
10. Unfortunately, on the world stage India’s broadband story has not, so
far, been impressive. In absolute terms China and USA had about 120
million and 85 million connections respectively by June 2010 in
comparison to India’s 10 million. In a report8 comparing Internet and PC
penetration of BRICI countries (Brazil, Russia, India, China, and
Indonesia), Boston Consultancy Group states that penetration in India is
lowest on both counts.
11. Several countries worldwide, for example, the US, Japan, Australia,
Canada, Portugal, South Korea, Germany, Singapore and Finland have
identified broadband as a potential infrastructure, enabling the national
economic & social growth and already developed national plans for
creating nationwide broadband network reaching the unconnected areas.
The Governments of these countries have also allocated suitable financial
resources for creating countrywide high speed broadband network.
Studies worldwide suggest positive returns from investment in
broadband infrastructure. For example, an analysis for the European
Commission estimates that broadband can create more than two million
jobs in Europe by 2015, and an increase in GDP of at least EUR 636
billion. A study in Brazil reported that broadband added up to 1.4% to
the employment growth rate. In China, every 10% increase in broadband
penetration is seen as contributing an additional 2.5% to GDP growth.
Initiatives taken so far
12. The Authority has taken a number of initiatives in the past to promote
the growth of broadband. These include the Authority’s recommendation
on Accelerating Growth of Internet and Broadband Penetration dated
April 29, 2004 after which the Government issued Broadband Policy in
December 2004 laying down the targets for broadband connections. It
was estimated that the broadband connections would grow to 9 million
8 BCG Report: The Internet’s new Billion: Digital Consumers in Brazil, Russia, India, China and Indonesia
by the end of year 2007 and 20 million connections by the end of year
2010 in India.
13. Till now, the main emphasis has been on DSL technologies. Since
spectrum for 3G and BWA services has now been auctioned, mobile
broadband sector will also gain momentum. The Authority is of the view
that it is the appropriate time to treat the next decade as “Digital
14. Despite the known benefits of broadband, it is a matter of concern that
India had just 10.29 million broadband connections in the country at the
end of September 2010 as against the target of 20 million broadband
subscribers by 2010, set by the Broadband Policy 2004. The net
broadband addition per month is just 0.2 to 0.3 million in contrast to
around 18 million mobile connections per month.
15. The availability of 3G and Broadband Wireless Access (BWA) technologies
augur work for the growth of broadband. With a vice to accelerating the
growth of broadband, TRAI submitted a proposal of taking the
Broadband to all the villages to the Cabinet Secretary on 6th July 2009.
Government constituted an Inter Ministerial Committee on 4th August
2009 under the Chairmanship of the Administrator, USOF to draw an
action plan for extending broadband connectivity to all villages in the
country. The committee submitted a concept paper to Department of
Telecommunications in January 2010. This paper is under consideration
of DoT. TRAI has also perused the report on “Broadband connectivity to
Panchayats” by Shri Sam Pitroda, Advisor to PM, Public Information
Infrastructure and Innovations. Vide a letter dated 1.4.2010 from
Department of Telecommunications (DoT) (Annexure-II), sought the
recommendations of the Authority on review of the definition of
Broadband connectivity.
16. A consultation paper was issued on 10th June 2010 to seek the views of
stakeholders for the formulation of a National Broadband Plan. The
comments were posted on the TRAI web-site and open house discussions
were held with all stakeholders on 6th September 2010 and 19th October
2010 at Hyderabad and New Delhi respectively. These recommendations
are a result of above consultation process.
17. These recommendations seek to:
A. Make proposals for formulation of a National Broadband Plan
B. Propose an institutional framework
C. Suggest time schedule for creating a robust broadband infrastructure
D. Make proposals for funding of the creation of the broadband
E. Review the definition of broadband;
F. Address regulatory and other measures required to achieve introduction
and adoption of broadband.
Structure of these recommendations
18. Chapter 1 discusses International experiences regarding Broadband.
Chapter 2 gives present status of broadband. Chapter 3 discusses factors
influencing Broadband Demand elaborating present status and potential
for broadband demand. Various factors affecting the demand like
affordability, applications and content, awareness, literacy, utilization
etc. are also dealt with in detail in this chapter. Chapter 4 deals with
assessment of network requirement. Chapter 5 discusses the National
Broadband Plan Chapter 6 deals with measures to improve broadband
use. Chapter 7 gives the framework of National Broadband Plan.
1.1. The importance of broadband has been recognized worldwide. According
to ITU, for Governments, broadband is a way of promoting economic
development and social benefits; for telecommunication companies,
broadband offers a route to offset the current slowdown in the industry;
for businesses, in particular small- and medium-sized enterprises,
broadband brings the advantages of access to high-speed
communications, and the ability to reach a worldwide audience that were
previously only available to larger companies.
1.2. Countries world over have recognized the need for national broadband
networks. National broadband network rollout becomes economically
viable for two reasons. Firstly, research consistently shows that
investment in any ICT has a direct positive effect on GDP growth.
Secondly, broadband networks very quickly pay for themselves through
the benefits that get delivered across society in many different ways.
Since broadband network rollout can effectively be financed by
innovation and cost-savings in sectors such as health, education, energy
and transport, this makes them incredibly cost effective. Recent
estimates show that, in some countries, cost savings of 0.5% to 1.5%
over ten years in these four key sectors alone, could justify the cost of
building national point-to-point, fibre optic networks9.
1.3. Korea is the leading example of a country rising from a low level of ICT
access to one of the highest in the world10. At the turn of the millennium,
the Republic of Korea had a broadband penetration of just 1%. To
promote adoption of Broadband, the Korean Government launched Cyber
9 ITU- Speech by ITU Secretary-General, http://www.itu.int/en/osg/speeches/pages/2010-03-08-2.aspx
10 ITU: Broadband Korea: Internet case study March 2003
Korea 21, a programme offering affordable IT education to marginalized
groups like housewives, the elderly, and the disabled. Complementing
this, Korea embarked on a wide-ranging e-government programme,
investing US$ 24 billion in a national fibre backbone that provides more
than 28,000 Government departments and agencies with fast broadband
access. Today, Korea is one of the world’s most advanced broadband
markets – standing well ahead of either the US or Canada, for example –
demonstrating the power of political will in bringing broadband to the
1.4. The Internet is largely recognized as a general purpose technology, and
broadband is regarded as a basic infrastructure, in the same way as
electricity, water or roads. Many even consider the Internet as a
“fundamental human right,” and some countries have started to put in
place legislation stipulating that access to the Internet is a human right
for their citizens12. Finland has declared Internet as a legal right.
Recognizing the importance of broadband, several countries have
developed their “National Broadband Plan”, which has country-specific
broadband goals along with detailed action plans. Figure 1 shows
introduction of broadband in some of these developed and developing
countries. Some of the International practices in respect of broadband
initiatives are discussed in subsequent paragraphs.
11 ITU- Speech by ITU Secretary-General, http://www.itu.int/en/osg/speeches/pages/2010-03-08-2.aspx
12 World Telecommunication/ICT Development Report 2010
Figure1.1: Introduction of National Broadband Plan by developed and
developing countries13
Note 1: National Broadband plan not yet launched. (Thailand)
1.5. At the end of June 2010, there were 9.6 million active Internet
subscribers in Australia. The phasing out of dial-up Internet connections
continued with nearly 92% of Internet connections now being non dialup.
Australian also continued to access increasingly faster download
speed of 1.5 Mbps or greater. Australia now plans to build a high speed
National Broadband network in order to revolutionize workplace and
services including Education and health. It has passed a legislation to
this effect in November 2010. The Government’s National Broadband
Network will be built and operated by a new company specifically
established by the Australian Government to carry out this project. The
Government will be the majority shareholder of this company, but
significant private sector investment in the company is anticipated.
13 Source: Analysis mason
14 Source: Australian Government, Department of Broadband, Communication and the Digital Economy website,
1.6. The new National Broadband Network will Connect 90 percent of all
Australian homes, schools and workplaces with broadband services with
speeds up to 100 megabits per second, 100 times faster than those
currently used by many households and businesses. It aims to Connect
all other premises in Australia with next generation wireless and satellite
technologies that will deliver broadband speeds of 12 megabits per
second. The plan when implemented directly support up to 25,000 local
jobs every year, on average, over the 8 year life of the project. Under the
Government’s new national broadband network every house, school and
business in Australia will get access to affordable fast broadband.
1.7. The Government’s National Broadband Network will be built and
operated by a new company specifically established by the Australian
Government to carry out this project. The Government will be the major
shareholder of this company, but significant private sector investment in
the company is anticipated. The Government will make an initial
investment in this company but intends to sell down its interest in the
company within 5 years after the network is built and fully operational,
consistent with market conditions, and national and identity
security considerations. This company jointly owned by the Government
and the private sector will invest up to $43 billion over 8 years to build
the national broadband network. The Government’s investment in the
company will be funded through the Building Australia Fund and the
issuance of Aussie Infrastructure Bonds (AIBs), which will provide an
opportunity for households and institutions to invest in the national
broadband network. The network will provide provide fibre optic
transmission links connecting cities, major regional centres and rural
towns. It is expected to be rolled-out, simultaneously, in metropolitan,
regional, and rural areas, covering all towns with a population of more
than 1000 to achieve 90 per cent coverage of the FTTP network, and
remaining coverage to be delivered through wireless and satellite
1.8. The EU continues to be the largest broadband market in the world. In
January 2010, there were 123.7 million fixed broadband lines, up 9 %
since January 2009, and the average fixed broadband penetration rate in
the EU reached 24.8 %, up 2 percentage points over one year. Mobile
broadband take-up is growing in EU. The deployment of high-capacity
broadband on the other hand is currently limited. While 83.4 % of fixed
broadband lines in the EU offer speeds above 2 Mbps, only 23.2 % are
above 10 Mbps. Growth in mobile broadband was significant in
a number of EU countries in 2009. The estimated number of dedicated
mobile broadband cards (25.1 million) corresponds to about 20 % of all
fixed broadband connections, up from 10 % in 2008.
1.9. The Digital Agenda is Europe’s strategy for a flourishing digital economy
by 2020. The overall aim of the Digital Agenda is to deliver sustainable
economic and social benefits from a digital single market based on fast
and ultra fast Internet and interoperable applications. The Europe 2020
Strategy has underlined the importance of broadband deployment to
promote social inclusion and competitiveness in the EU. It restated the
objective to bring basic broadband to all Europeans by 2013 and seeks to
ensure that, by 2020, (i) all Europeans have access to Internet speeds of
above 30 Mbps; and (ii) 50% or more of European households subscribe
to Internet connections above 100 Mbps.
15 Europe’s Digital Competitiveness Report, 2010, http://ec.europa.eu/information_society/digitalagenda/
documents/edcr.pdf, European Commission’s A Digital Agenda for Europe, http://eurlex.
1.10. As per digital agenda for Europe, the Commission will work out an
ambitious European Spectrum Policy Programme in 2010 for decision by
the European Parliament and the Council that will create a co-ordinated
and strategic spectrum policy at EU level to increase the efficiency of
radio spectrum management and maximise the benefits for consumers
and industry;
1.11. Member States would develop and make operational national broadband
plans by 2012 that meet the coverage and speed and take-up targets
defined in Europe 2020, they would also take measures, including legal
provisions, to facilitate broadband investment, including issues such as
Right of Way. The member states would use fully the Structural and
Rural Development Funds that are already earmarked for investment in
ICT infrastructures and servicesand implement the European Spectrum
Policy Programme.
1.12. Broadband Access a Legal Right: Finland is the first country in the world
to make high-speed Internet access a legal right, obliging operators to
provide connections of at least 1Mbps to every citizen. The Finnish
Government reviewed its communications policy guidelines in December
2008. The guiding principle has been that telecommunications operators
are responsible for supplying communications services on market terms.
In future, however, if adequate communications services cannot be
provided on commercial terms only, public aid may also be used to
ensure that services are available to all.
16 Source: Digital Britain report, June 2009
1.13. In the policy review, two aims were set for the development of broadband
connections: a downstream rate of 1 Mbit/s by 2010 and 100 Mbit/s by
2015.By 2010, at the latest, every permanent residence and permanent
office of business or public administration body would have access to a
fixed or wireless subscriber connection with an average downstream rate
of at least 1 Mbit/s. The rate of 1 Mbit/s has been defined as a universal
service which a telecom operator subject to a universal service obligation
must provide to permanent residences and business offices at a
reasonable price by 1 July 2010 at the latest. By the end of 2015
practically all (more than 99 percent of population) permanent residences
and permanent offices of business or public administration bodies will be
no more than two kilometres reach to an optical fibre or cable network
permitting 100 Mbit/s connections.
1.14. The Finnish Government also offers a tax deduction and installation of
communications connections so that end-users that pay for subscriber
connection costs themselves benefit from the deduction. All future
transport infrastructures will be pre-installed with tubes into which
optical fibre may later be installed, or “blown”.
1.15. Germany currently has good broadband penetration that compares well
against international levels. Over 98 % of all German households have
broadband with transmission rates of at least 384 kbps. Based on the
currently accepted broadband definition of at least 1Mbps, penetration
amounts to approximately 92%. Well over 70 % of households have
access to transmission rates of at least 2Mbps, while some 20 % can
avail of high-speed Internet access through VDSL connections with up to
17 Federal Ministry of Economics and Technology: Innovation policy, information society,
telecommunications- “The Federal Government’s Broadband Strategy”, February 2009
50 Mbps. Some 21million of the 23million broadband connections in
service today are DSL lines operating through the standard telephone
1.16. In February 2009, the German Government issued “The Federal
Government’s Broadband Strategy”. Working together with the federal
states (Länder), local authorities and industry, the Federal Government
intends to give a massive boost to the development of the broadband
network in Germany. The aim is to have nationwide capable broadband
access by no later than the end of 2010 and a total of 75 percent of
households should have high speed broadband access with transmission
rates of at least 50 Mbps by 2014.
1.17. Measures to achieve the short-term target of achieving blanket coverage
capable of broadband access will focus mainly on sustaining and
expanding financial support for local authorities and using instruments
to improve financing options available to companies. The long-term goal
of developing high-speed networks nationwide will be achieved by
applying in addition more incentivised elements within the European
regulatory framework. Apart from offering financial support, the package
of measures will also provide stimulus to use synergies from
infrastructure projects.
1.18. As of March 2010, Internet users in Japan is 94.08 million of which
32.04 million are Broadband subscribers of this 32.04 million, 17.79
million have FTTH facility while 9.74 million are covered by DSL and 4.35
million by cable. An average speed of 100Mbps to 1Gbps is available to
all household on FTTH, while DSL offers a speed of 50 Mbps.
1.19. Japan Strategy 2015 seeks to utilize digital technologies, creating a
condition of digital inclusion throughout the economy and society. The
scope of the strategy covers following three priority areas:
(a) Electronic Government and Electronic Local Government
(b) Healthcare and Health Fields
(c) Education and Human Resource Fields
1.20. It also aims at development of infrastructure for existing industries,
including small and medium enterprises and development of
infrastructure for e-commerce that enables joint material procurement,
joint sales, etc.
1.21. In New Zealand, the number of broadband subscribers was 1.3 million in
June 2010. Sixty % of broadband subscribers had a data cap of 5GB or
more. Subscribers with upload speeds of 256kbps or more account for
nearly 80 % of broadband subscribers.
1.22. The Ministry for Communication and Information Technology issued “The
Digital Strategy 2.0” in response to the changes and challenges of a
rapidly evolving digital world. In the next five years, the Government is
committed to delivering fibre-to-the-premise connections to businesses
and public institutions (such as secondary schools, tertiary and research
institutes, hospitals and libraries) in major centres, and significantly
increased bandwidth connections throughout the entire country. This
will enable speeds of a gigabit or more. Openness is a central principle of
Digital Strategy 2.0. Any network sponsored by Government has to
conform to open access principles. Open access means multiple
18 http://www.med.govt.nz/templates/StandardSummary____43904.aspx,
connection providers can use the infrastructure to offer services to
1.23. The Government will invest at least $500 million into broadband
infrastructure over the next five years, to get fast broadband to New
Zealand homes and businesses. $340 million of this investment was
announced as the first stage of the Broadband Investment Fund (BIF).
1.24. This Strategy recognises the convergence of broadcasting,
telecommunications and the IT sectors. Over the next two years, the
Government will ensure that conditions are in place for innovation to
flourish across these converging sectors.
1.25. By following the policy, New Zealand aims to rank in the top half of the
OECD for broadband uptake, speed and coverage by the year 2010. By
the year 2012, 80 % of users will have access to broadband connections
of 20 Mbps or higher and 90 per cent will have access to 10 Mbps or
higher. Open-access urban fibre networks will be operating in at least 15
cities and towns. Terrestrial broadband coverage for 93 to 97 % of the
population, with more affordable satellite solutions for remote locations.
By the year 2018, 80 per cent of homes or premises will have access to
fibre, or equivalent high-bandwidth capable technology. 90 % of users
will have access to broadband connections of 20 Mbps or higher.
1.26. As at the end of year 2009, the Number of fixed residential broadband
connections in the UK was 16.8 million. 71% of the adults have
broadband facility of which 15% have mobile broadband facility. The
average broadband speed in the UK is 5.2Mbps.
1.27. As per Digital Britain Report of June 2009, the goal is to secure the UK’s
position as one of the world’s leading digital knowledge economies. The
report sets out a vision for some of the UK’s critical communications
issues, and aims at enabling Britain to be a global centre for the creative
industries in the digital age, delivering an ever wider range of quality
content, including public service content, within a clear and fair legal
framework; The Digital Britain report set out 86 recommendations and
actions across a wide range of areas. These include:
(a) Delivery of a Universal Service Commitment in broadband at a level of
2Mbps by 2012, and establishment of a Project to deliver at least 90%
coverage of Next Generation broadband to homes and businesses by
(b) Delivery of a Digital Radio Upgrade from FM to DAB and from MW to
FM, by the end 2015;
(c) Establishment of a work programme to improve digital skills in the UK,
to ensure that the demands are met of sectors such as digital
information and communications that are vital to the future of the UK
economy and to enable UK citizens to participate fully in the wider
benefits of the digital economy; and
(d) Encouraging investment in this new technology – which could increase
web speeds to up to 100 Mbps – by giving companies maximum
incentives to invest.
1.28. Federal Communications Commission (FCC) formulated the National
Broadband Plan in 2010. The plan recommends the six goals to serve as
19 http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-301294A1.pdf & US National
Broadband Plan
a compass over the next decade including (i) At least 100 million U.S.
homes should have affordable access to actual download speeds of at
least 100 Mbps and actual upload speeds of at least 50 Mbps. (ii) Every
American community should have affordable access to at least 1 Gbps
broadband service to anchor institutions such as schools, hospitals and
Government buildings.
1.29. The Plan envisages making available 500 MHz of spectrum for the
broadband services, as well as creating incentives for universal
availability and adoption of broadband. It also aims at ensuring universal
access to broadband network services through utilisation of the Connect
America Fund (CAF) to support the provision of affordable broadband
and voice. It also envisages the launching a National Digital Literacy
Corps to organise and train youth and adults to teach digital literacy
2.1. Pursuant to recommendations of TRAI, Government formulated
Broadband Policy of 2004. In this policy, broadband was defined as an
“always on” connection with downloads speeds of 256 kbps or more.
There were 0.18 million broadband connections at the end of March
2005. These broadband connections have grown to 10.30 million by the
end of September 2010. Considering the growth during the 5 year period
from 1st April 2005 to 31st March 2010, the Cumulative Annual Growth
Rate (CAGR) iso about 117%. A comparison of quarterly growth for the
last two years is given in Figure 2.1. In the quarter ending September-
2010, broadband registered a quarterly growth of 8.8% and Y-O-Y growth
of about 43%. Non broadband Internet connections consist of dial up
connections working upto 56.6 kbps and other connections with speeds
less than 256 kbps.
Figure 2.1: Internet & Broadband Connections in Millions
Broadband Non-Broadband
Sep-08, 4.9
Sep-08, 7.34
Dec-08, 5.52
Dec-08, 7.34
Mar-09, 6.22
Mar-09, 7.32
Jun-09, 6.62
Jun-09, 7.43
Sep-09, 7.21
Sep-09, 7.42
Dec-09, 7.84
Dec-09, 7.23
Mar-10, 8.75
Mar-10, 7.43
Jun-10, 9.47
Jun-10, 7.25
Sep-10, 10.3
Sep-10, 7.6
Sep-08 Dec-08 Mar-09 Jun-09 Sep-09
Dec-09 Mar-10 Jun-10 Sep-10
2.2. The broadband growth has not only been slow but also biased in favour
of urban areas. More than 60% broadband subscribers are in the top ten
metros and tier-I cities and more than 75% connections are in top 30
cities. Just 5% of the broadband connections are in rural areas which is
meagre compared to about 31% of total mobile telephone connections in
rural areas. Figure 2.2 gives the broadband penetration for top 32 cities.
Figure 2.2: Broadband DSL Connections by Cities
Source: CII Study20
2.3. In comparison, Internet services through non-broadband connections
have penetrated well in smaller cities & towns (with population less than
0.5 million). In these cities, Internet usage has grown from 5% in year
2000 to 36% in year 200921. Smaller towns have overtaken top 8 metros
in terms of Internet usage. Figure 2.3 gives the spread of the Internet
across different category of cities and towns.
20 Deployment models and required investment for developing rural broadband infrastructure in India
21 IAMAI & IMRB I CUBE Report 2009 -10
Figure 2.3: Internet Spread across the Cities
Source: IMRB & IAMAI I-cube report 2009-10
2.4. In India, claimed Internet users22 have increased by 20% between
September 2008 and September 2009. Similarly active Internet users23
have increased from 42 million to 52 million from September 2008 to
September 2009. Nearly 25% of Indian population stays in cities. Out of
which, 32% of them are PC literate. Of the PC literate population, 72%
claim to have used the Internet, of whom 73% are actively using Internet.
The penetration of Internet usage is low at 24% (i.e. claimed Internet
user / urban population) among urban individuals24. This indicates that
a person capable of using the Internet is not using it due to a perceived
lack of utility. Figures 2.4 gives details of claimed and active Internet
22 Claimed Internet user is an individual who has used at any point of time in the past. This gives indication that how many
Indian has experienced the Internet in their lifetime.
23 Active Internet User is an individual who has used Internet at least once in the last month.
24 IAMAI & IMRB I-Cube report 2009-10.
Figure 2.4: Internet Users claimed and active
Source: IAMAI & IMRB Survey- I-cube report 2009-2010
2.5. A large proportion of users access Internet from office and cyber café.
Cyber cafes continue to dominate the share (37%) among various
sources. However, accessing Internet through home has steadily declined
over the years. This year, an interesting pattern has emerged with 4% of
users accessing this medium through alternative sources such as mobile
and kiosks. Figure 2.5 gives locations from where users access the
Figure 2.5: Internet Access points
Source: IMRB & IAMAI I-cube report 2009-10
2.6. There were about 1.8 million data card subscribers at the end of
September 2010, whose advertised speed is upto 3.1 Mbps. There are
also 274.05 million wireless data subscribers who are able to use the
Internet from their mobile device at the end of September 2010. At the
end of September 2010, a growth of 94.11% on year-on- year basis has
been noted in wireless data subscribers. However, most of these are on
2G mobile networks with limited data capabilities.
2.7. While broadband has been deployed using Cable Modems, xDSL
technologies, fiber and wireless, in India xDSL has been predominantly
used. xDSL can be easily deployed on existing copper pairs going to
subscriber’s premises. Figure 2.9 gives the technology wise breakup of
broadband connections. It is evident from the figure that 86.89% of total
broadband connections are on DSL. The most common DSL technology
deployed is ADSL2 and ADSL 2+. These technologies typically support
download speed upto 2 Mbps for copper loop length of less than 3 Km
from the exchange. Higher speeds are possible on shorter loop lengths
and pre-qualified copper pairs.
Figure 2.9: Technology wise broadband connections
(In Percentage- September 2010)
Source: TRAI
2.8. Internet Service Providers (ISPs), Unified Access Service Licensees
(UASLs), Cellular Mobile Service Providers (CMSPs) and Basic Service
Operators (BSOs) are permitted to provide broadband access under the
existing licensing framework. There are 105 service providers who are
currently providing broadband services. However, top ten service
providers have captured more than 95% of market and top 5 service
providers have about 90% share. State owned companies BSNL and
MTNL together have about 70% market share. This indicates that despite
of having license for provisioning of broadband services, majority of
service providers are unable to penetrate into the market and market is
still dominated by few players only. Figure 2.10 gives the market share
of different service providers.
Figure 2.10: Market Share of Broadband
Source: TRAI
2.9. One way to assess concentration of market power is by using HHI25
(Herfindahl-Hirschman Index). Based on market share of top 10 service
providers, HHI changes in the last five years is given in figure 2.11. The
figure shows that not only the market is concentrated but the
concentration is getting worse with time.
25″HHI” means the Herfindahl-Hirschman Index, a commonly accepted measure of market
concentration. It is calculated by squaring the market share of each firm competing in the market and
then summing the resulting numbers. Value of HHI more than 1800 is considered as concentrated
Figure 2.11: HHI of Indian Internet Market
2.10. Although broadband penetration is low in India, the entry level tariff for
broadband services has come down drastically from Rs. 1500/- per
month in 2004 to Rs 200/- a month in 2007. Most of the service
providers are charging broadband monthly rental between Rs 200/- to
Rs 1600/- and providing various options for data transfer. Some service
providers even provide unlimited download packages. Some of the service
providers are already offering broadband services having zero rental
schemes. However, in such schemes per Mb download charges are
comparatively high ranging from Rs. 1.00/- to Rs. 2.00/- per Mb.
2.11. ITU’s ICT Development Index (IDI) captures the level of advancement of
information and communication technologies (ICTs) in many countries
worldwide and compares progress made. Its main objective is to provide
policy makers with a useful tool to benchmark and assess their
information society developments and to monitor progress that has been
made globally to close the digital divide.
2.12. The index combines 11 indicators into a single measure that can be used
as a benchmarking tool globally, regionally and at national levels. It
includes such indicators as households with a computer, the number of
fixed broadband Internet subscribers and literacy rates. India stands at
117th position (out of 159 countries) in global ICT development index
and at 20th position (out of 27 countries) in ICT development index of
Asia Pacific region (refer table 2.1).
Table 2.1 : ICT Development Index (IDI), 2008, 2007 & 2002
Asia Pacific Region
Korea (Rep.) 1 3 7.68 2 7.23 2 5.84 -1
Japan 2 8 7.12 7 6.89 17 4.79 -1
Hong Kong, China 3 11 7.04 10 6.78 12 4.98 -1
Singapore 4 14 6.95 15 6.47 16 4.79 1
Australia 5 15 6.90 14 6.51 14 4.97 -1
New Zealand 6 16 6.81 16 6.38 18 4.72 0
Macao, China 7 24 6.29 28 5.73 23 4.33 4
8 42 5.07 42 4.77 39 3.25 0
Malaysia 9 56 3.96 55 3.66 50 2.71 -1
Maldives 10 68 3.54 72 3.11 87 1.97 4
Thailand 11 76 3.27 75 3.03 74 2.13 -1
China 12 79 3.23 77 3.03 90 1.96 -2
Iran(I.R.) 13 84 3.08 86 2.73 92 1.94 2
Viet Nam 14 86 3.05 93 2.61 106 1.59 7
Philippines 15 90 2.87 95 2.61 81 2.02 5
Fiji 16 91 2.81 88 2.69 85 2.00 -3
Mongolia 17 95 2.71 94 2.61 86 1.98 -1
Sri Lanka 18 105 2.51 104 2.32 99 1.74 -1
Indonesia 19 107 2.46 108 2.15 109 1.57 1
India 20 117 1.75 116 1.62 116 1.21 -1
Lao P.D.R. 21 118 1.74 117 1.60 123 1.09 -1
Myanmar 22 119 1.71 118 1.60 104 1.66 -1
Cambodia 23 120 1.70 120 1.53 122 1.10 0
Bhutan 24 123 1.62 124 1.48 117 1.15 1
Pakistan 25 128 1.54 127 1.45 144 0.92 -1
Bangladesh 26 137 1.41 137 1.34 128 1.05 0
Nepal 27 142 1.34 141 1.27 131 1.04 -1
Papua New Guinea 28 151 1.08 150 1.06 137 0.99 -1
Source: Measuring the Information Society 2010, ITU-D
2.13. According to the World Economic Forum India is ranked 43rd out of 133
economies in the Network Readiness Index (NRI)26 2009–2010, with an
impressive 11-place improvement since 2008. (refer figure 2.6) 27. India
stands at 22nd position among 133 countries in Government success in
ICT promotion.
26 The framework illustrated in Figure below translates into the NRI, whose three main building blocks or
subindexes (environment, readiness, and usage) comprise a total of 68 variables, regrouped into the following
nine pillars:
27 , 2
Global Information Technology Report 2009-2010, world economic forum
Figure 2.6: Network Readiness Index 2002-2009
2.14. In a report28 comparing Internet and PC penetration of BRICI countries
(Brazil, Russia, India, China, and Indonesia), Boston Consultancy Group
states that penetration in India is lowest. Penetration of Internet users in
India was only 7%, which is expected to reach 19% by 2015 (refer figure
2.7). Similarly, PC penetration in India was only 4% at the end year
2009, which is expected to reach 17% by 2015. As per the BCG report,
Internet users in Indian spend on an average only half an hour online
each day, which is lowest rate among all the BRICI countries.
Figure 2.7: Internet Users in BRICI Countries
Source: BCG Report29
28 BCG Report: The Internet’s new Billion: Digital Consumers in Brazil, Russia, India, China and Indonesia
29 BCG Report: The Internet’s new Billion: Digital Consumers in Brazil, Russia, India, China and Indonesia
2.15. As per BCG report many digital consumers in BRICI countries have
learned to use the Internet in large part through their mobile phone
connections. In India, mobile Internet user base has tripled from 2007 to
2009 (Figure 2.8) 30.
Figure 2.8: BRICI Mobile Internet Users
Source: BCG
30 The Internet’s New Billions: Digital Consumers in Brazil, Russia, India, China and Indonesia
3.1 Use of ICT, particularly broadband, is driven by a number of social,
economical and technological factors. The need for inclusive growth has
never been felt more than it is today. As it is important to include the
large rural population in governance and decision making process it is
equally important to provide life enhancing urban-like amenities to the
rural population including health, education and entertainment. Experts
are of the opinion that the impact broadband on the GDP is much higher
than any other ICT. It is therefore natural that countries are concerned
about creating a robust broadband infrastructure that would sustain
high growth of broadband services. Deregulation and competition has
driven down revenues from traditional services like plain old telephone
service (POTS) and are forcing service provider to look for new streams of
revenues and they find immense potential in broadband. Convergence of
communications, media and IT is driving a host of new broadband
services and creating new revenue streams across sectors and industries.
The bottom line is, for a country like India, the Government can play a
critical role in diffusion of modern ICT such as broadband.
3.2 ICT has brought rural areas much closer to the markets and has
improved business transactions. India’s technological capabilities and
rising exports in information technology (IT) have been one of the major
drivers of growth. Goldman Sachs Economic Research paper on “India’s
Rising growth Potential” (Global Economics Paper No: 152) dated
January 22, 2007 indicates that India’s GDP (in US$ terms) will surpass
that of the US before 2050, to make it the second largest economy.
3.3 The underlying assumption in continuation of the growth story is that
growth-supportive policies are continued to be implemented. The cited
report emphasizes that to continue growing, India will have to educate its
children and its young people (especially its women). Lack of education
can be a critical constraint to the growth of the knowledge-based IT
sector, as well as in the move to mass employment in manufacturing. It
is important to educate people to take the advantage of the demographic
3.4 The demographic dividend arises from the fact that more than 50% of its
population of India is below the age of 25 and more than 65% hovers
below the age of 35. This makes India one of the youngest countries in
the world. It is being increasingly recognized that what matters is not the
size of the population, but its age structure. A population “bulge” in the
working age groups(15-64 years), however large the total population, is
an inevitable advantage. Thus, India, which is beginning to be
characterized by such a bulge, is seen as advantaged, despite its large
population. (Fig 3.1)
Figure 3.1 : Changes in population pyramid31 –India (1971-2016)
31 Population commission
3.5 In the above context it is absolutely essential that the information and
communication technologies (ICT) be harnessed to the utmost potential.
The inclusive potential of ICT at two levels: the benefits that can be
brought to poorer communities and the capacity of individuals within
these communities to participate in new economic opportunities.
3.6 ICT, particularly broadband, is seen as a powerful tool for inclusive
growth. With improving broadband penetration, wireless Internet access
and growth of the country’s economy, the “bottom of the pyramid” is
being seen as a lucrative market conducive to further growth of ICT. In
recognition that the country’s development is unsustainable if it fails to
include the large proportion of disenfranchised population into the
growth process, the Government of India has integrated “inclusive
growth” as the conceptual corner stone of its 11th Five Year Plan. The
entire underprivileged section is the potential user of ICT. However, for
the ICT sector, reaching out to the poor and needy is not just a business
venture, but is aimed at improving the standard of living of the poor
population of the country. If handled properly the underprivileged section
of the society offers the ICT industry a huge opportunity to grow and
flourish and this in turn would fuel the growth of the country.
3.7 Apart from demand pull to meet the target of Millennium Development
Goals (MDGs), technology push with rapid technological innovations,
enhanced processing capacity of devices, huge availability of memory
space in hand held devices, increasing digitization of content and ease of
managing and distributing the content online have changed the way
people use the telecom services now.
3.8 The growth of the broadband has been slow in the past. In order to
assess the demand of the broadband and to plan for future requirement,
stakeholders’ views were invited. Majority of stakeholders are of the view
that innovative technologies are facilitating use of ICT in all facets of life.
They feel that new applications, changing life style, and affordability of
these services to people is likely to enhance broadband demand
manifold. The following paragraphs to deliberate on various issues
having direct impact on broadband growth:
• Technological Innovations
• Capable Hardware & affordability
• Enhance purchasing power driven from economic growth
• Broadband growth driven by new content and applications
• Broadband requirement fro Important application
A. Technological Innovations
3.9 Liberalization and competition in the telecommunications market have
brought new and innovative technologies in the market. Convergence of
communications, IT and entertainment and media along with widespread
of IP technology are set to increase broadband use. Broadband will help
service providers to realize new revenue streams and bolster up their
bottom lines that have suffered decline due to reducing margins of
traditional voice services.
3.10 Technological innovation permits new ways of creating, distributing,
preserving, sharing and accessing digital content. As economies move to
become more knowledge-intensive, information-rich activities will
increase; new content will be created, collected, managed, processed,
stored, delivered, and accessed. With a broadband connection each user
can become a producer of content. This will spawn new businesses and
give further boost to utilization of broadband.
3.11 Adoption of applications like cloud computing, server farming and
decentralization of the processes will further require robust and scalable
broadband infrastructure with higher emphasis on quality.
Developments like smart grids in power management and GIS/GPS in
transportation are revolutionizing public infrastructure but need high
bandwidth, robust and reliable networks. Smart grids with smart meters
and advanced ICT has potential of reducing transmission and
distribution losses in India’s power sector by 30% through better
monitoring and management.
3.12 Miniaturization of devices, high processing with enhanced storage power,
supporting multi-functions has created an environment facilitating users
to create transmits and store huge contents. Such exchange of
information also require high speed network emphasizing broadband
3.13 Various wireless and wireline technologies are evolving which facilitate
high speed broadband access. Recently, ITU’s Radio-communication
Sector (ITU-R) has completed the assessment of six candidate
submissions for the global 4G mobile wireless broadband technology,
known as IMT-Advanced. Harmonization among these proposals has
resulted in two technologies, “LTE-Advanced” and “Wireless MANAdvanced”
being accorded the official designation of IMT-Advanced,
qualifying them as true 4G technologies. With fiber in the access and
wireless 4G one talks about delivering 100 Mbps data rates.
B. Capable hardware and affordability
3.14 The capabilities of smart phones bundled with pre loaded features and
inbuilt applications permit access to new domains using Internet access.
Data cards and Wireless Broadband CPEs facilitate availability of
broadband anytime, anywhere further fueling wireless broadband
3.15 The smart phones are handy, have huge memory, and can
support wide range of data applications. They are likely to
become more affordable with rising volumes and economies of
scale. As per the study report “Internet Device Landscape” conducted by
Intel Corporation, the number of Smart phones would increase to 18
million in the year 2014 from 2.5 million in the year 2010.
3.16 According to the IDC report, India Mobile Handsets Tracker, Q1 2010,
June 2010 release, Indian Mobile Handsets industry grew to record
36.35 million shipments for the first time in a single quarter in Q1 2010
(January-March 2010). There was a growth of 39.5% year-on-year (Q1
2010 over Q1 2009) in terms of unit shipments. Table 3.1 and Figure 3.3
show percentages of growth in shipments of handsets with new,
innovative features over the last three years – 2007 up to 200932. Table
3.1 shows that presently, only about 2% of the handset are capable of
accessing the high speed Internet. The number of smart phones is likely
to increase exponentially after launch of 3G and BWA services. Studies
32IDC analyst view point : India Mobile Handsets market evolution along important demand
trajectories gathers pace http://www.idcindia.com/analyst_viewpoint/index.asp
show that iPhone users are five times more likely to use the
mobile Internet than the average mobile consumer.
Table 3.1 : India Mobile Handset Shipment
Source: IDC’s India Mobile Handsets Tracker, Q1 2010, June 2010 release
C. Enhanced purchasing power driven by economic growth
3.17 The Indian economy is growing fast and has become the 11th largest in
terms of the market exchange rate at $1,235 billion (India GDP)33. In
terms of purchasing power parity, the Indian economy is ranked fourth
33 International Monetary Fund data for 2009
in the world. McKinsey study34 forecasts that Indian incomes will almost
triple over the next two decades. The report forecasts that India’s real
GDP growth rate over the coming two decades generally range between 6
and 9 percent per year. Average real household disposable income will
grow from ` 113,744 in 2005 to ` 318,896 by 2025, at a compound
annual growth rate of 5.3 percent.
3.18 Spending power in emerging market economies35 grows rapidly owing to
strong economic growth. Total consumer expenditure in emerging market
economies (EMEs) experienced a period growth of 66.0% in real terms
between 2000 and 2009 reaching US$7.5 trillion. In 2010, it is expected
to increase by a real annual growth rate of 6.9% (in fixed US$ constant
terms) to reach US$ 8.0 trillion. Although consumer spending in most of
these economies is dominated by essential goods and services, there will
be a gradual shift in spending patterns by 2020 when consumers will
have more room for discretionary spending. India is projected to have the
lowest per capita spending amongst EMEs at US$ 690 (fixed US$
constant terms) in 2010, followed by Vietnam (US$793), the Philippines
(US$1,301) and China (US$1,399). Nonetheless, China, India and
Indonesia will witness the highest period growth in per capita consumer
expenditure amongst EMEs of over 80.0% in real terms between 2010
and 2020. As incomes of the rising middle class increase and spending
potential of consumers in EMEs grows, there will be a gradual shift in
consumer spending patterns from basic necessities like food and housing
to household goods, communication, education leisure and recreation.
34 The ‘Bird of Gold’ : The Rise of India’s Consumer Market, MGI report May 2007
35 Source: National Statistical Offices/OECD/Eurostat/Euromonitor International
Emerging market economies covers 25 key economies which include Argentina, Brazil,
Chile, China, Colombia, Egypt, Hungary, India, Indonesia, Kazakhstan, Malaysia,
Mexico, Morocco, Peru, Philippines, Poland, Romania, Russia, Saudi Arabia, South
Africa, Thailand, Turkey, the UAE, Ukraine, and Vietnam.
3.19 McKinsey Global Institute (MGI) analysis shows that with the projected
growth of GDP rural incomes in India will continue to rise, leading to a
further significant decline in the level of rural poverty. It is projected that
by 2025 the size of the rural deprived class will decline from 515 million
people today, or 65 percent of the population, to 266 million, or about 29
percent of the rural population (Figure 3.2). With the rural population
growing by 116 million over the next 20 years, the potential for telecom
services especially broadband will grow exponentially.
Figure 3.2: Rural Poverty
3.20 MGI analysis also indicates that rural growth will be accelerated from a
compound annual rate of 3.9 percent during the past two decades to 5.1
percent during the next two. By the end of 2025, rural consumption will
have nearly tripled, creating a large potential market worth over 26
trillion Indian rupees ($577 billion). By way of comparison, in 20 years
the rural Indian market will be larger than the total consumer markets in
countries such as South Korea or Canada today, and almost four times
the size of today’s urban Indian market. MGI forecast that per-household
spending in rural India will reach current levels in urban India by 2017
(Figure 3.4).
Figure 3.3: Rural Consumption Growth
Figure 3.4: Per Household Consumption in Rural India
3.21 The above analysis clearly forecasts continual growth of Indian economy,
which will spread into rural areas as well in the coming future. Rural
masses will be stronger economically enhancing their purchasing power
and consumptions of goods & services other than their basic needs. This
will definitely spur the demand of broadband in the rural areas provided
suitable connectivity and applications are made available.
D. Broadband Growth Driven By New Content and Applications
3.22 The broadband ecosystem includes applications and content such as email,
search, news, maps, entertainment, e-government, e- commerce, ebanking,
e- education, and e- health. Ultimately, the value of broadband
is realized when it delivers useful applications and content to end-users.
3.23 3.26 Networks, devices and applications drive each other in a virtuous
circle. The wide availability of fast and reliable networks and versatile
devices to connect to those networks encourage innovators and
entrepreneurs to develop exciting and useful applications and content.
These new applications draw interest among end users, bring new users
online and increases usages among subscribers. This growth in the
broadband ecosystem reinforces the cycle, encouraging service providers
to boost the speed, functionality and reach of their networks.
3.24 Usage of Internet is spreading across various activities. There are
different requirement for urban and rural population. Leisure activities
music and video downloading, searching information especially
education related is gaining popularity and showing considerable
increase in usage pattern in rural India (Figure 3.5 & 3.6). As compared
to urban areas music / video on Internet is more popular among the
rural users. 67% of rural users access the Internet for this purpose as
compared to 45% in urban areas.
Figure 3.5: Various purpose of accessing Internet (Urban)
Figure 3.6: Purpose of accessing Internet (Rural)
Source: IAMAI & IMRB Internet for Rural India 2009
3.25 In response to the consultation paper, some of the stakeholders pointed
out the need for increasing the scope of broadband from just e-mail to
more value added applications, effective use of broadband in automation
of operations and functions, innovative use of technology in imparting
education, health services, enhancing e-commerce activities and
adopting e-governance on large scale.
E. Broadband Requirement for Important Applications
1. e-Education
3.26 One of the eight goals of the United Nations’ The Millennium
Development Goals (MDGs) is to achieve universal primary education by
2015. India has committed to meeting the MDGs. India has reported that
from the projected trend of NER in India the country is likely to achieve
100% NER well before the 2015 dead line36
3.27 The Eleventh Five Year Plan places highest priority on Education as a
central instrument for achieving rapid and inclusive growth. India has
notified ‘Right of Children to Free and Compulsory Education Act 2009’
36 Millenium Development Goal India Country Report 2009.
bill for providing free and compulsory education to all children aged 6-14
with effect from 1st April 2010. India has various target for education at
under the different plans and scheme some of the major targets are:
1. Shiksha Abhiyan (SSA) (2001): useful and relevant elementary
education for all children in the 6-14 age groups by 201037.
2. Rashtriya Madhyamik Shiksha Abhiyan (RMSA) (2009): providing
universal access to secondary level education by 2017 and universal
retention by 2020 and Have a secondary school within 5 km of every
habitation and higher secondary school within 8 Km38.
3. National Literacy Mission (NLM) for adult literacy: Achieve 80%
literacy rate, Reduce gender gap in literacy to 10%, Reduce regional,
social, and gender disparities.
3.28 In India there are 7,85,000 primary schools, 3,21,374 middle schools,
1,13,524 high schools and 58,390 pre degree junior colleges in India. In
these schools about 92% primary schools, 82% middle schools 65% high
school or higher secondary schools managed by Government / local
bodies or aided by Government.
3.29 There is shortage in part of infrastructure for education as well as
personnel. Under 11th five year plan over 12 lakh, teachers’ posts have
been sanctioned and 10.22 lakh recruitments reported. Under RMSA
major targets include strengthening of 44,000 existing secondary
schools, opening of 11,188 secondary schools, mostly through upgradation
of upper primary schools, appointment of 1.79 lakh additional
teachers, and construction of 80,500 additional classrooms.
3.30 Various initiative are there from Government for increasing use of ICT in
education. The Scheme of Sarve Shiksha Abhiyan (SSA) has a
component of Computer Aided Learning (CAL), wherein a provision of Rs
37 http://india.gov.in/sectors/education/sarva_shiksha.php
38 Report to the people on Education 2009-10, Ministry of Human Resource Development
50 lakh per district has been made as Innovation Fund.39 The Centrally
Sponsored Scheme “Information and Communication Technology [ICT] in
School” was launched in December 2004, to provide opportunities to
secondary stage students to develop ICT skills and also for ICT aided
learning process. It has a provision that each secondary and higher
secondary school will be serviced with broadband connectivity of at least
2 Mbps capacity.
3.31 Internationally countries also emphasizing the various program in
education through ICTs. In USA Virtually every school in the country has
Internet access. The FCC’s has issued new E-Rate Order which will help
bring affordable, super-fast fiber connections to America’s New Zealand
has a “Digital Strategy 2.0” plan. It has a plan to Develop and implement
a National Education Network in which by 2012 all educational
institutions, libraries, schools and researchers will be connected. France
has a proposals related to the Development of “Digital Universities”, in
which it is proposed that develop digital services for the administration of
universities, including virtual offices and online enrollment. United
Kingdom has launched a Digital Britain program
3.32 In India, many states have provisions in their IT policies for encouraging
the use of IT in schools/ colleges/ education institutes. Some of the
states like Maharashtra, Kerala, west Bengal etc. has included the
participation of private entities for providing the IT infrastructure and
training. Kerala has launched programs like IT@school, akshaya project
for encouraging the digital literacy in state.40
39 mid term appraisal of 11th Five year plan 2007-12 , planning commission of India,
40 Information Technology Policy Towards an inclusive knowledge society 2007, Department of Information technology, Government of Kerala
3.33 Availability of applications and content in education is also increasing.
Given the diversity of the country’s educational, linguistic and social
situation, there exists a need for a wide variety of digital content
and resources for different subjects, curriculum, ages/grade levels
and languages
3.34 Overall 14.25% schools are having the computers. Only 6.01 primary
schools are having computers. 29.41% of upper primary schools are
having the computers and 56.10 % Upper primary with higher secondary
schools are having the computers41. This data is for 2007-08, it is
expected that till now i.e. in 2010 some more upper primary and higher
secondary school may have the computers.
3.35 It may be projected that all the upper primary and higher secondary
school may have the computer by 2012. Therefore, broadband demand
for all upper primary and higher secondary schools i.e. 376,227 schools
may be projected by 2012. After considering the utility of broadband in
education, various initiatives to increase the literacy and education it can
be projected that there is strong possibility that all the schools may be
covered on broadband by end of twelfth five year plan As per the figure
3.11, there are total 1,02,403 Government or Government aided schools
are there in India. All these school will required at least 2 Mb broadband
3.36 Based on above it is clear that there will be good demand of broadband
from education sector and at least 2 Mb connectivity will be required for
each education institute connection.
2. e-Health
41 Elementry Education in India. Progress towards UEE, Analytical tables 2007-08 published by National
University of Education Planning and Administration (NEUPA) & Department of School Education and Literacy.
3.37 Healthcare is potentially one of the most important areas where
broadband can make an impact. It has been estimated that at least USD
5 trillion is spent worldwide on providing healthcare and savings of
between 10% and 20% could be achieved through the use of telemedicine
delivered by broadband. A World Health Organization report revealed an
estimated shortage of almost 4.3 million medical staff worldwide, with
the situation being most severe in the poorest countries. Medical advice,
monitoring, diagnosis and training delivered through broadband can help
a great deal to overcome these gaps. Training of professionals in all
sectors can be delivered through broadband video and other
3.38 Millennium Development Goal (MDG): In order to make progress in
achieving the MDGs which include reducing child mortality, improving
maternal health, combating HIV/AIDS, malaria and other diseases, etc.
by the target date of 2015, it is essential that countries and communities
everywhere are enabled to take advantage of ICT revolution.43 ICT
applications in the health sector can bring efficiency gains, much as they
can for education, employment and other priorities of the MDGs. ICT
applications could, for example, improve the monitoring of demand for
and supply of HIV/AIDS drugs, which would be highly relevant given the
current lack of funding for these drugs. ICT technologies offer the
potential to empower citizens with medical information and knowledge
that can facilitate improved decision-making and care. ICT in health care
can reduce costs and help to mitigate the impact of the crisis44.
42 http://www.broadbandcommission.org/report2.pdf
43 http://www.broadbandcommission.org/report2.pdf
44 United Nations e-Government survey 2010
3.39 ICT can contribute significantly towards achieving the vision, goals and
objectives as well as broad strategies as articulated in the XIth Five Year
Plan for the years 2007-12. Health Infrastructure is an important
indicator to understand the healthcare delivery provisions and
mechanisms in a country. As per the available information, 75% of
health infrastructure, manpower (including the qualified consulting
doctors practice) and other health resources are concentrated in urban,
23% in semi-urban (towns) and only 2% in rural areas; where as 70% of
population live in the rural areas. Hospital beds per 1000 people are 0.10
in rural as compared to 2.2 in urban areas45. There is acute shortage of
specialist manpower at the PHCs and CHCs.
3.40 ICT innovation may be leveraged to bring about a paradigm shift in the
way health care delivery is managed. Broadband can be leveraged to
achieve higher capacity and quality in health care segment. However, ehealth
applications will require various video based applications and
high-bandwidth networks are essential for these services to function
properly. With rapid advancements of technologies and development of
innovative bandwidth intense applications, this requirement is likely to
increase multifold. Connectivity will enable medical care providers to
share data throughout their geographically dispersed clinical delivery
sites, and to a lesser degree, reach the patient at home or at least at a
central place in the village. To the extent that health care becomes
dependent on access to computer networks, policymakers need to pay
special attention to the needs of the medically underserved population to
ensure that lack of network access does not further impede their access
to care46. Thus, it is amply clear that there will be high bandwidth
requirement in health care segment. Demand exists in health care
45 Current status of E-health in India source: http://openmed.nic.in/1265/01/skm12.pdf
46 http://knowledgecommission.gov.in/downloads/documents/wg_med.pdf
segment; however there are constraints at the supply side. Therefore
effective solutions at supply side need to be worked out.
3.41 ICT have clearly made an impact on health care. It has improved
dissemination of public health information; enabled remote
consultation, diagnosis and treatment through telemedicine; facilitated
collaboration and cooperation among health workers, including sharing
of learning and training approaches; supported more effective health
research and the dissemination and access to research findings;
strengthened the ability to monitor the incidence of public health threats
and respond in a more timely and effective manner; and improved the
efficiency of administrative systems in health care facilities. This
translates into savings in lives and resources, and direct improvements
in people’s health.47.Ultimately, the value of broadband is realized when
it delivers useful applications and content to end-users.
3.42 In order to reap the benefits of ICT in the health sector, it is desirable
that all Health care establishments have broadband connectivity and are
well connected. A common national Electronic Health Record (EHR) be
maintained. The Government should ensure the development of a webbased
network, connecting all health care establishments, in both public
& private sector. This will enable electronic recording of data and would
be accessible to authorized users, whenever & wherever they need it.
This will also facilitate identifying solutions to specific medical
challenges. A National eHealth portal should be developed that may
facilitate interaction amongst various stakeholders to share information
and facilitate provision of health care services. In addition, it is pertinent
to ensure that all the manpower in the delivery chain have adequate ICT
47 Improving Health, Connecting People: The role of ICTs in the Health Sector of Developing countries, A Framework
paper, Infodev, working paper No. 7, 31 May 2006
training. Relevant web based applications needs to be developed to
ensure automation of the entire process and data sharing mechanism.
3. e-Commerce
3.43 e-commerce is the use of electronic communication and digital
information processing technology in business transactions to create,
transform and redefine relations for value creation between or among
organization or between organizations and individuals.
3.44 E-commerce in India is still in a nascent stage and businesses are not
able to harness the full potential of ecommerce in India. There are several
challenges that the businesses must overcome. The most important
challenge in India for the development and implementation of ecommerce
on a large scale is the unavailability of proper broadband connectivity,
which is essential for a hassle free online e-commerce experience.
Therefore even to those people who have access to the Internet, the
browsing experience is very limited due to slow connection. The cost of a
broadband connection in India is also higher than in other countries.
The other technological challenge facing the Indian markets of
ecommerce is the use of credit and other smart cards by the Indian
3.45 Another big achievement of ecommerce already is that it has helped to
drastically improve the services of the Government sector. For example, it
is now possible and easy to pay your telephone and electricity bills
online, which would otherwise have taken hours together in lines to pay.
3.46 Indian economy is composed of a very large number of small and
medium enterprises, who would be at a maximum benefit with ecommerce.
A survey on “ICT adoption among MSMEs (micro, small and
medium sized enterprises) in India” by Internet and Mobile Association of
India (IAMAI)48 indicates that B2B e-commerce market size (in terms of
transaction value or value of business is generated) as on December,
2007 was USD 78 billion. B2B e-commerce has been increasing at a
rapid pace and was expected to touch USD 89 billion by December, 2009
at a CGR of 8.77%. If projection are made for same growth pattern it
would be around USD 100 billion by the end of year 2010. Each SME
may require 2 MB/s for providing E commerce facility to its consumers
4. e-banking
3.47 Access to basic financial services continues to be an unrealized dream for
millions of our citizens; even more so for the citizens in rural and remote
areas. The National Sample Survey data reveals that 51.4% of nearly
89.3 million farmer households do not have access to any credit either
from institutional or non institutional sources. Only 13 per cent are
availing loans from the banks in the income bracket of less than Rs.
50,000. A large percentage of rural population does not have a deposit
account which means that they do not have access to even basic
financial services. Banks find it difficult to operate large number of tiny
accounts and micro transactions profitably. Currently, a bank branch in
India serves about 16000 people – a number very high when compared to
the developed countries.
3.48 The Australian Government in its report49 “Government Role in Business
to Business e-commerce” estimated that in the banking sector cost per
transaction is reduced from $ 3 over the counter to $ 0.02 over the
Internet. It has the potential of furthering financial inclusion by making
48 www.iamai.in
49 www.archive.dcita.gov.au
small ticket retail transactions cheaper, easier and faster for the banking
sector as well as for the small customers.
3.49 The Reserve Bank of India has been actively involved in harnessing
technology for the development of the Indian banking sector over the
years. The cumulative expenditure on ‘computerisation and development
of communication networks’ by public sector banks from September
1999 to March 2010 aggregated to Rs 22,052 crore. On an annual basis,
the expenditure on ‘computerisation and development of communication
networks’ registered a growth of 23.2 per cent in 2009-1050.
3.50 Apart from this, Number of braches of PSB that have implemented CBS
increased from 35464 as on March 31,2008 to 44304 as on 31st March
2009. The computerization of the banking sector, which is regarded as
precursor to other technological initiatives, is almost in completion stage.
The Proportion of the PSB branches that achieved full computerization
increased from 93.7 percent as of end of March 2008 to 95 percent as of
March 2009. That During 2008-09, the total number of automated teller
machines (ATMs) installed by banks grew by 25.4 percent51.
3.51 Edgar, Dunn & Company in their Global Advanced payment Forecasts
suggested that there would be around USD 1842 Billion transaction in
the year 2015.
3.52 Department of Post (DoP) has also shown need for large scale technology
induction and automation to not only to cut cost but also to improve the
quality of service. Towards this goal, India Post has already started
setting up the Mail Business Centres (MBCs) as a key component for
mail management. The MBCs are envisaged as frontline business wings
of India Post offering one stop solution for varied mailing needs of the
50 Appendix Table IV.10 to Report on trend and progress of banking in India 2009-10
51 Economic survey 2009-10
customers, undertaking the task of collection, processing and delivery of
bulk mail. For faster mail movement and improved quality of service,
Automated Mail Processing Centres (AMPCs) are also being set up. India
post also has plan for networking, once the networking of post offices is
completed it can start various online services.
3.53 Money transfer can be an important component of the financial service
and the scope of instant Money Order (iMO)/electronic Money Order
(eMO) can be extended by tying up with international payment gateways.
With increasing monetization of Indian economy, there is a huge
potential in the money remittance market. In fact, several agencies have
come in the market with innovative products to facilitate the remittances.
Money remittance market of India Post which is at about Rs.8000 crores.
3.54 There are a total of 155,015 post offices in the country. (Position as on
31-03-2009). Of these 24,835 are departmental post offices. Up to 31-3-
2009 a total of 12604 departmental post offices have been computerized.
The DoP proposes to effect computerization and networking52 of
remaining departmental Post Offices (10841) and all Branch Post Offices
(129553)by the year 2012. The major applications currently used in the
computerized post offices of the Department are Meghdoot and Sanchay
Post for Postal and Savings Bank operations respectively. These
applications are LAN based solutions. Consequently, there is a need for
communication between these applications and between the various post
offices where the data are residing in a distributed architecture (LAN
Based). Some later applications like e-Post, e-MO etc have been
developed based on WAN architecture. But these are peripheral
applications which again need to be synthesized with the Post office
information system.
3.55 Since the number of computerized post offices is increasing and as all
the Departmental Post Offices and Extra Departmental Post Offices will
52 Annual Report 2009-2010, Department of Post, Government of India
be computerized during XIth Five Year Plan period, India post also has
proposal to set up local training center in each division. These training
centres will impart familiarization training to staff of Postal Accounts
Offices on Postal/RMS Offices and to the Accounts staff of field units
about the Accounting Procedures. For performing its operation Each Post
office may require at least bandwidth of 2 Mb/s.
5. e-Governance
3.56 Government of India has drawn up a National e-Governance Plan (NeGP)
in May, 2006 with an outlay of approximately Rs 6000 crores for
delivering Government and private services at the doorstep of the
citizens. The vision of this plan is to – “Make all Government services
accessible to the common man in his locality, through common service
delivery outlets and ensure efficiency, transparency & reliability of such
services at affordable costs to realize the basic needs of the common
3.57 NeGP has been implemented through three main components: State
Wide Area Networks (SWANs), State Data Centres (SDCs) and Common
Services Centers (CSCs).
3.58 The CSCs are envisioned as the front-end delivery points for
Government, private and social sector services to rural citizens of India,
in an integrated manner. Department of Information technology (DIT) has
planned to deploy 104881 Community Service Centers (CSC) in rural
areas all over the country under NeGP in order to deliver e-governance
services in the rural areas. The Scheme has been approved at a total cost
of Rs 5742 Cr. over 4 years, of which the Government of India is
estimated to contribute Rs 856 Cr. and the State Governments Rs 793
Cr. The balance resources would be mobilized from the private sector
3.59 Once all the 2.5 lakhs CSCs are established and all the Government
service delivered online, the utility of broadband will increase for rural
masses. The CSCs are envisaged to provide high quality and costeffective
video and data services in the areas of e-governance, education,
health, agriculture, entertainment as well as other private services. As
the video content are supposed to consume sizable bandwidth, the
bandwidth requirement for each CSC would be approximately 2 Mbps,
which may increase in future.
6. E-entertainment and Social behavior
3.60 The socio-economic structure is changing with enhanced
emphasis on networking. Apart from simple applications like email,
instant messaging, educational information, text chat etc,
the focus is shifting to applications like video download,
advertisements, gaming and video chat. Evolution of the web to
provide more personalized services, likely adoption of Web 3.0
and increasing web networking will enhance Internet bandwidth
requirement. The changing life style and enhanced popularity of
networking sites encourage people to be connected online.
3.61 As per the study by Comscore metrics, more than 33 million
Internet users (aged 15 and older) in India visited social
networking sites in July 2010. Internationally, Facebook itself
have more than 500 million active users in July 2010, out of
which 50% active users log on to Facebook in any given day.
Total 700 billion minutes were spent by users per month just on
Facebook. Each user on an average creates about 90 pieces of
content each month. According to the report, India now ranks as
the fastest growing market and seventh largest market worldwide
for social networking, after the US, China, Germany, Russia,
Brazil and the UK.
3.62 In India, Internet is becoming the routine for a user in urban
areas. Almost half of the Internet users are going on-line 4-6
times a week. Internet usage has gone up from 9.3 hrs/ week to
15.7 hours per week i.e. a steep rise of 70% (Figure 3.8).
Figure 3.7: Internet Users Routine (Urban)
5 Source: IAMAI & IMRB Survey- I-cube 2009-10
Figure 3.8: Internet Usage (Urban)
7 Source: IAMAI & IMRB Survey- I-cube 2009-10
3.63 Video consumption is happening across multiple platforms –
right from TV to Online, Mobile and across newer devices like
tablets. It is interesting to note that rural users are more
inclined to these activities as compared to urban. Nielsen
conducted a survey (sample size: 27,000 online consumers in 55
countries) on video consumption habits and found that claimed
TV viewership is higher than average in the emerging BRIC
economies, Brazil, Russia, India and China. 70% of online
consumers watched video over the Internet. Penetration is
predictably highest among younger consumers. Mobile Video is
already used by 11% of global online consumers: penetration is
highest in Asia-Pacific and among consumers in their late 20s.
A. Broadband Target
4.1. Broadband policy announced by the Government in December 2004 set a
target of 9 million broadband connections by the end of the year 2007
and 20 million connections by the end of the year 2010. The achievement
has just been 10.30 million broadband connections by the end of
September 2010. The analysis of the broadband growth for previous
quarters (December ‘08 to September ‘10) indicates quarterly growth of
about 0.7 million (Table 4.1).
Table 4.1: Growth of broadband subscribers
Broadband subscribers
(in Millions)
Increase in
subscriber in the
qtr (in Millions)
Sep’08 4.90
Dec’08 5.52 0.62
March,09 6.24 0.72
June’09 6.63 0.39
Sep’09 7.23 0.59
Dec’09 7.83 0.61
March’10 8.75 0.92
June’10 9.45 0.70
Sep’10 10.29 0.83
Average 0.7
4.2 The present broadband growth has been primarily using DSL technology
on copper loop. About 86% of 10.3 million broadband connections are
provided using DSL technology. Sluggish growth of broadband has been,
among other factors, due to limited availability of adequate infrastructure
to support broadband.
4.2. While the availability of copper loops in the country is estimated to be
about 40 million only 8.9 million broadband connections have been
provided using DSL technology till now. Ethernet/LAN has contributed
about 6.12% of broadband subscribers. With conservative estimates of
about 50% copper loops being fit to support DSL connections, the
number of wireline broadband subscribers is projected to increase to
16.6 million subscribers and 22.2 million subscribers by the year 2012
and 2014 respectively, if DSL remains the predominant technology.
4.3. India has approximately 80 million cable homes, which are expected to
grow to 103 million by 2014. TRAI has, in its recommendation on
“Implementation of Digital Addressable cable TV Systems in India” in
August, 2010, recommended that all cable TV homes will be digital &
addressable by the year 2013. The plan envisages that all major cities
having population of one million and above would be digitally
addressable by the end of the year 2012. As per the industry
information, 70% of cable TV homes (i.e 56 million cable TV homes) are
in cities having population of more than one million. All cable with digital
addressability if upgraded to optical fibre will be capable of supporting
broadband given that fiber backhaul for providing broadband service is
ensured. Even with the modest assumption of just 50% and 70% of cable
with digital addressable systems providing broadband, the number of
broadband connections provided by cable network by the end of 2012
and 2014 will be 28 Million and 72 million respectively.
4.4. The spectrum for 3G and BWA technologies for provision of high speed
data services has been allocated recently. It is expected that wireless
broadband will be available to subscribers from early 2011. There were
687.71 million wireless subscribers at the end of September 2010. Out of
687.71 million wireless subscribers, about 274 million wireless data
subscribers (i.e 39.8%) are able to use Internet services from their mobile
device. The mobile Internet user base has tripled from 2007 to 2009. We
also have 1.5 million high speed data card subscribers. The high growth
of data subscribers, capable of using Internet through mobile devices,
makes available a ready population which could adopt broadband.
4.5. In the TRAI’s recommendations on “Spectrum Management and
Licensing Framework” dated 11th May 2010 it is estimated that number
of smart phones will be about 120 million by the year 2014. Even at a
conservative estimate, there would be 80 million smart phones. It
indicates high growth rate in wireless broadband segment. While most of
the smart phone users will be expected to become wireless broadband
subscribers, only those subscribers having minimum download speed of
2 Mbps or more will qualify for broadband as per the proposed definition
by the year 2014. Lot of network evolution both in wireline and wireless
segment is expected by the year 2014. Wireless networks would be
expected to adopt IMT advance supporting much higher download speed.
At the same time, a robust network on optical fibre is expected to be
available. As such, subscribers will get more choices from different
competitive technologies and forecasting of expected number of
subscriber is difficult.. Thus, preference of subscriber may be shifted
toward wireline broadband. The mobility support on wireless broadband
networks would drive its adoption.
4.6. The growth projections of mobile subscribers is likely to be maintained
and expected to reach 888 million mobile subscribers by 2012 and one
billion mobile subscribers by 2014. Considering that the percentage of
the data subscribers is atleast maintained, if not increased further, the
number of data subscribers through mobile device will be 353 million
and 398 million by the year 2012 and 2014 respectively. With a
conservative estimate, it is expected that atleast 7.5 % of data
subscribers capable of using Internet (i.e 26.5 million subscribers) will
adopt broadband by 2012 and about 15% (i.e 59.7 million subscribers)
by 2014.
4.7. The expected growth of broadband using wireline technologies will be
44.6 million and 94.2 million for 2012 and 2014 respectively. However
contribution of wireless broadband technologies by the year end 2012
and 2014 is expected to be 26.5 million subscribers and 59.6 million
subscribers respectively (Table 4.2).
Table 4.2: Projected Ratio of Wireless and Wireline Broadband
Wireline Broadband
DSL BB (in
Cable BB
Total Wireless BB
(in Millions)
2010 11.0 – 11.0 – 11.0
2012 16.6 28.0 44.6 26.5 71.1
2014 22.2 72.0 94.2 59.7 153.9
4.8. As wireless broadband is yet to be launched in a big way and expected to
take some time, the expected broadband from wireline itself is expected
to be 50 million by 2012 and 100 million by 2014.
4.9. In view of above discussions, The Authority recommends that the
broadband target in National Broadband Policy may be fixed as
 75.0 Million broadband connections to be provided by
the end of year 2012
 160 Million Broadband connections to be provided by
B. Bandwidth Requirement
4.10. Achieve the broadband target as indicated in paragraph 4.8, will require
coverage of 30% and 60% households to have access with broadband
connections by the year 2012 and 2014 respectively (Table 4.3).
Table 4.3: Meeting broadband targets
Year No of
% of Households
to be covered for
Number of
2012 268 Million 30% ~75 Million
2014 275 Million 60% ~160 Million
4.11. 70% of Indian population lives in the villages. In order to provide
ubiquitous coverage of broadband and ensuring availability of required
bandwidth for provision of broadband across the country, study of
demographic pattern, location wise broadband demand, and backhaul
bandwidth requirement is necessary.
4.12. India is a vast country. The usage pattern and behavior of users across
the country differs based on the classifications like rural/ urban, type of
usage, mode of access etc. The demographic pattern of India is
summarized in table 4.4, and 4.5.
Table 4.4 : Demographic Pattern of India
Demographic Pattern
Population of India 1028737436
Rural Population (72.2%) 742,490,639
Urban Population (27.8%) 286,119,689
Number of inhabited villages 593,731
Number of Gram Panchayat 265000
Av. No. of Village per Gram Panchayat 2.24
No of Blocks in India 6374
Av. No. of Panchyat per Block 41.57
No. of District HQ 610
Total Area in sq k.m. 3287240
Source: Census of India 2001
Table 4.5: Rural & Urban Population distribution
Rural Population Demography
Villages No. of
Population Average
per village
Less than 100 45,276 2,274,375 50 11
100-199 46,276 6,912,023 149 32
200-499 127,511 43,960,187 345 73
500-999 145,402 105,274,341 724 154
1,000-1,999 129,977 183,294,133 1,410 300
2,000-9,999 80,413 239,184,866 2,974 633
5,000-9,999 14,799 98,112,136 6,630 1,411
10,000 & above 3,961 63,478,578 16,026 3,410
Total 593,615 742,490,639 1,251 266
Urban Population Demography (Town)
Towns No.of
Population Average
per Town
per Town*
Less than 5000 192 667,772 3,478 828
5,000-9,999 879 6,658,356 7,575 1,804
10,000-19,999 1,346 19,458,295 14,456 3,442
20,000-49,999 1,163 35,154,857 30,228 7,197
50,000-99,999 404 27,832,412 68,892 16,403
Total 3,984 89,771,692 22,533 5,365
Cities No.of
Population Average
population of
a City
Av. No. of
House Holds
1,00,000-4,99,999 320 60,554,358 189,232 45,055
5,00,000-9,99,999 32 24,650,202 770,319 183,409
Total 352 85,204,560 242,058 57,633
Metros No.of
Cities &
Population Average
population of
a Big City /
Av. No. of
House Holds
10,00,000-& above 42# 111,143,437 2,646,272 630,065
Source: Census of India 2001
*Household (Rural- 4.7, Urban- 4.2) as per NSS Report No. 532: Education in India 2007-08
#Census 2001 shows 35 cities above 1 million the number 42 is arrived on the basis of
projection population for the year in 2010.
4.13. For these recommendations villages means all villages mentioned in table
4.5. Similarly towns, cities and metros are also refer to the table 4.5.
Population of villages, town, cities and metros areas population of year
2001 mentioned in table 4.5 is taken as base population for projections.
4.14. In order to estimate the broadband bandwidth requirement and plan
access & core network, the number of the household in Metro/big cities,
cities, town and villages have to be calculated. This will be used to
estimate location wise bandwidth requirement. Table 4.6 based on
census of India data 2001 gives average household details.
Table 4.6: Rural & Urban Population distribution
population per
Average Number
of Household*
Villages 593,615 742,490,639 1,251 266
Towns ( 0 to 99,999) 3,984 89,771,692 22,533 5,365
Cities (1,00,000 to 999,999) 352 85204560 242,058 57,633
Metros (more than 1 million) 42 111143437 2,646,272 630,065
Source: Census of India 2001
*Household (Rural- 4.7, Urban- 4.2) as per NSS Report No. 532: Education in India
4.15. About 60% of broadband connections are in top 10 cities. The
penetration of Internet and Broadband is high in metros. Considering
high demand and the advantages of the broadband, it is expected that
wireline broadband penetration in metro cities by 2014 may cross 100
percent households. Wireline Broadband penetration in cities, small
towns and rural areas will also increase. Based on the demographic
pattern given in Tables 4.4 & 4.5 and broadband projections as per
Table 4.3, the projected percentage of wireline broadband household
location wise is given in table 4.7 and figure 4.1A and 4.1B.
Table 4.7: Wireline Broadband Penetration Projection Demographic
2010 2012 2014
Demographic Areas
HHs (million)53
Penetration (%)
Broadband HHs
HHs (million)
Penetration (%)
Broadband HHs
Penetration (%)
Broadband HHs
Metros (More than 1
28 20% 5.6 29 70% 20 ~29 100% 29
Cities (1Lakh to 1 million) 22 5% 1.10 22 40% 9 23 80% 19.2
Towns ( Upto 1Lakh) 23 4% 0.92 23 25% 6 24 50% 12
Villages 188 2% 3.77 194 8% 15 198 20% 39.6
53 Household is calculated by dividing the population by 4.2 for urban area and 4.7 for rural area. Population for each demographic area is
calculated from projected population of India for that year and taking the ratio of total population in proportionate to ratio for that area in 2001.
As per 2001 census ratio for various demographic areas was:
Demographic Area Population % of total population
10Lakh more (42 Cities) 111143437 10.80%
1Lakh-10Lakh 85204560 8.28%
upto 1Lakh 89771692 8.73%
Rural 742490639 72.18%
Total 1028610328
Total House Holds (India) 261 4% 11.39 268 ~20% 50 275 36% ~100
Figure 4.1A: Wireline Broadband Target and Penetration projection (in
percentage) for the year 2014
Figure 4.1B : Wireline Broadband projection in millions of subscriber
4.16. Wireless broadband growth is expected to increase after the launch of
wireless broadband services. Wireless broadband target and
penetration projection is given in table 4.8, figure 4.2A and 4.2B.
Table 4.8 : Wireless Broadband Penetration Projection Demographic
2012 2014
Demographic Areas
HHs (million)
Penetration (%)
Broadband HHs
Penetration (%)
Broadband HHs
Metros (More than 1 million) 29 38% 10.5 30 62% 18
Cities (1Lakh to 1 million) 22 23% 5 23 45% 11
towns( Upto 1Lakh) 23 13% 3 24 50% 7.2
Villages 193 5% 8 199 12% 23.5
Total House Holds (India) 268 10% 26.5 275 22% 59.7
Figure 4.2A: Wireless Broadband Target and Penetration projection
(in%) for the year 2014
Figure 4.2B : Wireless Broadband projection in millions of subscriber
4.17. As mentioned before, it is estimated that there will be 11 million, 50
million and 100 million wireleine broadband subscribers in 2010, 2012
and 2014 respectively. In addition to wireline broadband subscribers,
there will be 26.5 and 59.7 million wireless broadband subscribers by
2012 and 2014 respectively. Ratio of wireline broadband and wireless
Internet can be calculated as detailed in Table 4.9.
Table 4.9: Share of Wireless and Wireline Subscriber (in Millions)
Demographic Areas 2012 2014
Total Wireline
Total Wireline
Metros (More than 1
30.5 20 10.5 47 29 18
Cities (1Lakh to 1
14 9 5 30 19.2 11
Towns ( Upto 1Lakh) 9 6 3 19 12 7.2
Villages 23 15 8 63 39.6 23.5
Total House Holds 76.5 50 26.5 159.7 100 59.7
4.18. With increasing demand of applications and changing usage pattern, it is
expected that bandwidth requirement will increase exponentially in
every segment. Bandwidth requirement for widely used applications has
been estimated and is given in table 4.10.
5 Table 4.10: Bandwidth required for various applications
Application Min. Bandwidth Required
Internet Surfing Upto 256 Kbps
E-mail 64 Kbps
Voice Chatting 64 Kbps
Video Clips 256-512 Kbps
Tele-education 256-512 Kbps
Tele-medicine 256 Kbps to 4 Mbps
Video streaming per
2 Mbps (Approx.)
Video gaming
256-512 Kbps
(high precision games may required
higher bandwidth)
High Definition Video per
4-8 Mbps
Online gaming/ Video on
demand/ Video
streaming/ IPTV
3-4 Mbps
4.19. Over the years Internet has been evolving as a platform not only for
communication but also for various other applications. The Internet
usage pattern is different in different segment of population. In urban
areas, apart from e-mail, educational information search is second
most popular application. In rural areas, while e-mail is most
commonly used application, music and video content is preferred over
other applications (Refer figure 4.3).
Figure 4.3: Purpose of Internet Access
4.20. The bandwidth requirement is likely to increase in future due to adoption
of high bandwidth applications such as video on demand, telemedicine,
multi-media based distance learning and video conferencing.
Some of these applications may require bandwidth speeds even more
than 4 Mbps per user as shown in figure 4.4.
Figure 4.4: Bandwidth requirement per user
Source: CII Report54
4.21. The bandwidth requirement in rural areas is high due to usage of
multimedia particularly where literacy is low. Most of the applications
presently available on Internet are in English. As English literacy in
rural areas is low, communication through video will be a popular
application. e-education and e-health will pickup and are expected to
have high video content. Initially broadband may be used through
community centers. The proliferation of broadband connectionswill
increase with the knowledge and awareness. Considering the
bandwidth requirements as discussed for various applications, on an
average a minimum of 2 Mbps per household will be necessary to
support the broadband requirements till 2014. The holding time of the
session is expected to be high for entertainment and e-education
applications; therefore, adoption of low contention ratio for planning of
the network will be necessary. Accordingly, contention ratio of 10:1
has been considered for working out bandwidth requirement (Refer
Table 4.11).
Table 4.11: Bandwidth Requirement for Villages
2012 2014
Total Broadband
Subscriber in
Villages (in
23.0 8.0 15.0 63.1 23.5 39.6
Av. No of HHs*
per village
327.00 327.00 327.00 334 334 334
BB penetration 12% 4% 8% 32% 12% 20%
54 CII study: Deployment Models and Required Investments for Developing Rural Broadband Infrastructure in India
BB Households 39.64 13.48 26.16 106.44 39.64 66.80
BW requirement
per HH (in Mbps)
2 2 2 2 2 2
BW requirement
in access network
( in Mbps) per
79.29 26.97 52.32 212.9 79.28 133.60
contention ratio 10:01 10:01 10:01 10:01 10:01 10:01
BW requirement
per village in
Backhaul in
7.93 2.70 5.23 21.29 7.93 13.36
BW req. Per Gram
panchayat in
Mbps (2.24 village
per GP)
17.76 6.04 11.72 47.69 17.76 29.93
BW req. Per Block
in Mbps (approx
41 gram
panchayat per
728.19 247.68 480.51 1955 728.13 1226.98
*Projected household is taken for population of 2012 & 2014
4.22. For urban areas, bandwidth demand will be high frequency broadband
usage and users are expected to remain connected for long time. The
changing social behavior of urban population will require higher
bandwidth to upload user generated content and to access social
networking sites. IPTV and YouTube viewership is increasing. The
household connection is likely to be used by many members of a family
for a variety of applications. Popularity of HDTV is also increasing
giving rise to higher bandwidth requirement. Therefore, in order to
effectively support broadband requirement for bandwidth hungry
applications, on an average a minimum of 2 Mbps bandwidth per
household will be required by 2012 and 4 Mbps per household by
2014. Based on the above assumptions, bandwidth requirement for
towns, cities and metros for broadband usage has been worked out and
is given is given in Table 4.12.
Table 4.12: Bandwidth forecast in Urban areas by 2012 & 2014
2012 2014
Total Broadband
Subscriber in Towns
(in million)
9 3 6 19.2 7.2 12
Av. No of HHs* in
5773 5773 5773 6024 6024 6024
BB penetration in
39% 13% 26% 80% 30% 50%
BB Households in
2259 753 1506 4819 1807 3012
BW requirement per
HH (in Mbps)
2 2 2 4 4 4
BW requirement in
access network ( in
Mbps) in town
4518 1506 3012 19277 7229 12048
contention ratio 10:01 10:01 10:01 10:01 10:01 10:01
BW requirement per
town in Backhaul in
451.80 150.60 301.20 1927.68 722.88 1204.80
Cities 2012 2014
Total Broadband
Subscriber in Cities
(in million)
14 5 9 30 11 19.2
Av. No of HHs* in
62500 62500 62500 65341 65341 65341
BB penetration in
64% 23% 41% 130% 48% 83%
BB Households in
39773 14205 25568 85227 31250 54546
BW requirement per
HH (in Mbps)
2 2 2 4 4 4
BW requirement in
access network ( in
Mbps) in cities
79545 28409 51136 340910 125000 218182
contention ratio 10:01 10:01 10:01 10:01 10:01 10:01
BW requirement per
city in Backhaul in
7955 2841 5114 34091 12500 21818
Metros 2012 2014
Total Broadband
Subscriber in Metros
(in million)
30.5 10.5 20 47 18 29
Av. No of HHs*in
690476 690476 690476 714286 714286 714286
BB penetration in
105% 36% 69% 157% 60% 97%
BB Households in
726190 250000 476190
428572 690476
BW requirement per
2 2 2 4 4 4
BW requirement in
access network ( in
Mbps) in Metro
500000 952381
contention ratio 10:01 10:01 10:01 10:01 10:01 10:01
BW requirement per
metro in Backhaul in
145238 50000 95238 447619 171429 276191
*Projected household is taken for population of 2012 & 2014
4.23. To summarize, The total bandwidth requirement for broadband (wireline
+ wireless) is given in table 4.13:
Table 4.13: Summary of Wireline Bandwidth Requirement
Area 2012 in
2014 in
Rural Village 2 2
Town 2 4
Cities 2 4
Bandwidth per
household Urban
Big Cities and metro 2 4
Village 7.93 21.29
Gram Panchayat 17.76 47.69
Block 728.19 1955
Town 451.80 1927.68
Cities 7955 34091
Big Cities and metro 145238 447619
A1. Planning Premise
5.1. While enunciating a broadband plan both speed and availability are
important considerations. It is important to increase speeds by deploying
faster next-generation broadband networks so that applications and
services that will play important roles in improving quality of life and
boosting economic growth are not precluded. At the same time, it is also
important for the decision makers to see that broadband availability is
increased and broadband is made available to reach most households
and businesses.
5.2. Making a comprehensive plan for a national network is an involved
process. Broadly, the plan would broadly delineate the utilisation of the
existing network, new infrastructure required to be built, desirable
technologies, expected outcomes, timeframe and financing. Service
providers, infrastructure companies or other responsible agencies would
use the broad level framework to make detailed plans for deploying the
network. Available and evolving technologies have a bearing on planning
decisions and should be appropriately evaluated. New technologies, when
introduced, should bring more capacity, increased reliability and reduced
cost. Building a communication infrastructure is usually quite expensive
and economic planning plays a vital role. It is very important that the
economical conditions of customers are taken into consideration.
Economic consideration for urban and rural areas would be different and
need to be appropriately factored in while making tactical and strategic
plans. Also important to take into consideration is the service set
suitable for different type of user population. Access to cloud computing
which would be necessity for big businesses and SMEs alike, the need for
tele-medicine, tele-education, entertainment and gaming would
determine the bandwidth calculations and technology selection.
5.3. A network that delivers broadband and the required services would have
several elements that would work as a system and perform the desired
functions. Example of such elements would be provider routers, provider
edge routers, Ethernet switches layer 2/layer 3 switches, customer edge
routers, ducts, cables, transmission equipment and the required
customer relationship management hardware and software. These
elements would have different capacities, life times and costs. In order to
simplify planning as well as achieve simplicity and ease of
implementation, network planning may be done at several levels based
on type of equipments, media, their life cycle, costs, demand forecast,
planning timeframes etc. While electronics may be planned for up to 5
year time frame, the passive component like fiber cable, ducts etc. are
more likely to have planning horizons of 20 years. Thus, at the strategic
level where plans may be for 10 years or more, the physical structure
having long life is given due attention. At the tactical level, usually 3-5
years the implementation agencies would have a more detailed plan. The
decisions about the type of switching equipment to be used are also
made at this level. At the tactical level the goals specified should support
the goals specified at the strategic level. At the operation level, for a
period of 1 to 3 years, the planning would include access priorities,
transition from existing network infrastructure to new infrastructure,
documentation system, business establishment and related goals.
A2. Network Structure
5.4. An important aspect of planning the network is to decide the physical
structure. The structure will decide robustness, reliability and scalability
of the network. For long haul network covering the length and breadth of
the country, the service providers provide the backbone or core network.
This network may be designed as a network of routers located in
important cities and interconnected in a combination of ring, mesh and
star configurations. The backbone may be structured as a single
monolith network or as interconnected hierarchy of national, regional
and state networks with presence in DHQ and other important cities. In
today’s context this network would be an IP network that has interface
for both Ethernet and Time Division Multiplexing(TDM) streams and can
handle multiple protocols. The IP backbone could be used for a large
number of applications relating to voice, data and video. The Access
Network or the ‘last mile’ going upto the customer premises are based on
the applications to be delivered to the end-user. For high bandwidth,
high quality network, fiber based technologies are chosen. For the service
providers having legacy copper network, ADSL and its variants are the
natural choice. Wireless Technologies beyond 3G offer promise of high
speed broadband networks and operators who have relevant spectrum
may prefer to deploy these in some areas. Aggregation network functions
as the collection agent of data from several sources in the access network
and efficiently transport it to the backbone/core network. The layers of
network down to the access are indicated in the figure below:
Fig 5.1 Network Layers
5.5. The access network is deployed by the licenced service providers using
various wireline and wireless technologies. This network goes upto
subscriber premises and must be designed and dimensioned on the basis
of the services and applications that each customer requires. The
aggregation network for broadband service has been deployed by large
service providers to meet their own requirements. Standalone service
providers who offer their own broadband service would have to connect
their equipment to a large service provider’s aggregation network or
directly to the backbone network. In the latter case, the small service
provider would have to build its own aggregation network at a
substantial cost. Most pan-India service providers have built their own
backbone network; others would have to interconnect their network to
one or more of these backbones to offer inter-state VPN or broadband
service to the customers. Non-availability of aggregation access network,
specially in the rural areas, and the backhaul from Blocks to the DHQs
at competitive rates to the service providers is one of the major
impediments in the growth of broadband. The recommendations given in
this document addresses these issues.
A3 What demands are to be met?
5.6. Assessment of demand made in chapter 4 has been summarized here.
These parameters would be used in proposals for the access aggregation
and backhaul networks:
5.7. Demographically speaking the total population estimated in the census
of 2001 of 1.03 billion is distributed in the ratio of 72.2% and 27.8% in
rural and urban areas. There are 5,93,615 inhabited villages, 3,74,552
villages with population more than 500 and 2,65,000 gram panchayats.
There are 6374 blocks and 610 DHQs. The total area of the country is
32,87,240 square km giving about 13 km average block radius. There are
about 266 households per village.
5.8. The total number of broadband connections are expected to be 75 million
by 2012 and 160 million by 2014. To achieve this number of households
that are expected to have broadband are 11 million out of 261 million
(4%) in 2010, ~75 million out of 268 million (30%) in 2012 and ~160
million out of 275 million (60%) in 2014.
5.9. Wireline is expected to contribute 54 million connections by 2012 and 95
million by 2014. Out of these wireline connections, Cable broadband will
be 28 million by 2012 and 72 million by 2014. Wireless broadband will
be 60 million by 2014.
5.10. For the services and applications that are likely to be useful in rural
areas a conservative average of 2 Mbps per household can taken for
planning purposes. Some connections like that in CSC and some affluent
households may be of higher data rates but many others may require a
lesser data rate. The average number of broadband households in 2012
and 2014 would be 23 and 63 millions in rural area. The total backhaul
bandwidth required per block will be 728 Mbps in 2012 and 1955 Mbps
in 2014 (wireline 480.51 and 1226.98 and wireless 247.68 and 728.13).
Assuming a contention ratio of 1:10, bandwidth required per village will
be 8 Mbps in 2012 and 21 Mbps per village in 2014.
5.11. Backhaul requirement from block to DHQ would be 728 Mbps in 2012
and about 1955 (Approx. 2 Gbps) in 2014
B – Infrastructure for Broadband
5.12. As discussed earlier, the present status of broadband penetration in the
country on the basis of various technologies and type of media is as
Table 5.1 Technology wise broadband penetration
Technology % Subscribers
(in Millions)
DSL 86.89 8.95
Cable Modem 6.23 0.64
Ethernet LAN 3.95 0.41
Optical Fiber 0.24 0.02
Wireless 2.15 0.22
Leased Line 0.27 0.03
Others 0.26 0.03
Total 100.00 10.30
Figures reported by service providers for Sept 2010
5.13. In the short term i.e. 1-2 years, it would be important to reuse the
existing network to the extent possible through enhancements that could
be carried out during this period. However, from a long term perspective,
it is necessary to evaluate various technological options available and
choose those that offer better price performance ratio and are
technologically more efficient.
5.14. In the consultation paper stakeholders were asked to suggest network
topology to support high speed broadband using evolving wireless
technologies. The majority of stakeholders suggested Government should
continue to adopt technology neutral policy so that all technologies are
provided level playing field. Some of the stakeholders suggested that
topology should be based on the principle of efficient utilization of
various types of available infrastructure. This can be achieved by
combining wireless technologies with the fiber based network. Fiber and
Microwave can be used for the backhaul whereas wireless technologies
can play a vital role in the access side of the network.
5.15. Some stakeholders supported the idea of the development of a robust
pan-India National Broadband network in the long-term, however they
would like it to be technology neutral. These stakeholders further stated
that it is important for the Authority to leverage and harness all available
technologies to achieve the national broadband objectives in the most
expeditious and effective manner. Hence, the focus should not only be on
a particular media, but all available technologies should be leveraged for
building up such a national broadband backbone.
B1. Backbone/Core Network
5.16. Integrated service providers having large footprint have all created their
IP backbone networks. A backbone primarily consists of carrier grade
core and edge routers connected with high speed optical fiber links. The
contemporary IP backbones are multi-protocol multi-service networks
that can cater to voice, data and video traffic. The same backbone could
be used for high speed Internet access, VPNs, hosting services and Video
based services like IPTV. It is expected that with increasing traffic
requirements the service providers would make appropriate
enhancements and would also expand their networks to cover district
head quarters, if not already done. The service providers who do not own
backbone network can obtain leased lines or VPNs and connect their
access network to other service providers backbone.
B2. Aggregation/backhaul network
5.17. Aggregation network exists in the metro and cities. As the number of
broadband connections increase the service providers would be forced to
build more aggregation point to economically take the traffic to the
backbone network. Backhaul is a constraint and the proposed agency
would have a role is this. In the rural areas no aggregation exists and
backhaul primarily belongs to BSNL. It is possible that in some cases the
optic fiber cable connecting village to the block and block to the
backbone would have no spare fiber to meet the requirements. It would
therefore be essential to plan a shared aggregation and backhaul
B3. Access Network
5.18. The country has about 40 million copper loops, primarily with the PSUs
BSNL and MTNL. It was natural therefore that the initial deployments of
broadband took place on copper using xDSL technologies. Today, the
country has about 86% broadband connections, by far the largest,
working on copper using DSL technologies. DSL, however, has a
pronounced speed-distance tradeoff. The popular version, ADSL 2+, can
theoretically support upto 24 Mbps but on very short loops, it can
support only 2 Mbps up to at a distance about 3.5 kms. This limits the
coverage area around the central office premises where the DSLAMs are
installed. Functioning of DSL is highly sensitive to the quality of the
copper loops. A large number of old pairs may need conditioning to
qualify for use with DSL technology. Testing and conditioning each pair
is a time consuming and expensive process. Currently, not much
investment is being made in the copper network resulting in limited
expansion and declining availability with time. With about 16 million
loops in rural areas and 24 million in urban areas ubiquitous broadband
coverage is not possible through copper. Copper based technologies like
DSL therefore have a limited role to play to an extent of about 20%
deployment by 2014 but for scaling up the level of deployment and
bandwidth other technologies would have to be looked into.
5.19. Some of the stakeholders have, in their response to the consultation
paper, indicated their preference for wireless technologies for reasons of
economic suitability and its ubiquitous availability. Wireless access
technologies will include 3G wireless, Broadband Wireless Access, LTE,
WiMAX, and other technologies that might come in future. The 3G GSM
networks deployed by some of the operators are capable of providing
throughput of 2 Mb per cell for stationary customers. For large scale
deployment of broadband at higher speeds, this would be inadequate and
it would be difficult to give credible cell-wide broadband coverage using
3G alone. Also when the customer moves from cell to cell it would be
difficult to ensure that the connection is sustained at the negotiated
broadband rate. At 2 Mbps the cell-radius would only be about 10 meters
giving a cell area of about 300 sq m. 3.5G wireless technologies are
typically capable of providing broadband speed of about 14.4 Mbps per
cell site with 5 MHz carrier but these have not yet been commercially
deployed in India. Some operators have deployed CDMA networks with
EVDO which can give about 3 Mbps connection to a subscriber but not
on a sustained basis. Thus today we do not have wireless deployments
that can give credible wireless broadband that fits today’s broadband
definition and gives large-scale broadband connections.
5.20. There has been widespread adoption of GSM/CDMA as a 2G technology
primarily for voice and UMTS/HSPA/CDMA 2000/EVDO as 3G primarily
for data applications. LTE and mobile WiMax are the next step in the
technological roadmap. Both LTE and WiMAX offer higher data rates,
lower latency and greater spectral efficiency than previous technologies.
With these technologies, it is possible to achieve bandwidth upto 140
Mbps per cell site with 20 MHz carrier. However, the scarcity of spectrum
and provision of adequate backhaul to support the increasing demand
are the two key constraints. In their response, some of the stakeholders
have stated that these IP-based Next Generation Networks (both fixed
and wireless) will be built on fiber-based core and aggregation networks
that can flexibly provide bandwidth to wireless base stations as well as
wireline access networks.
5.21. In the subsequent paragraphs, an attempt has been made to access the
requirement of spectrum in following four scenarios for achieving the
wireless broadband targets given in the Tables 4.11 and 4.12:
• Metros cities like Delhi;
• Large cities like Nagpur;
• Cities having population between 1 Lakh and 10 lakh; and
• Villages
5.22. For the metro and large cities like Delhi and Nagpur it is assumed that a
wireless broadband household penetration of 36% and 60% will be
achieved in the year 2012 and 2014 respectively (Table 4.12). For the
year 2012 download/ upload (DL/UL) traffic channel bandwidth ratio of
3:1 has been taken. In view of increase in demand of more video based
applications, it is expected that by the year 2014 this ratio will change to
2:1. For the purpose of estimating the spectrum requirement, the
spectrum efficiency figures and usable data throughput projected for
Wimax and LTE technologies has been taken.
5.23. Presently 20 MHz of spectrum has been allocated to each of the three
operators for BWA. Assuming that by 2012 an operator will deploy
around 500 BTSs in Delhi and around 150 BTSs in Nagpur and by year
2014, 1000 and 250 BTSs in Delhi and Nagpur respectively, it is seen
from Table Nos. 5.2 and 5.3 that the spectrum requirement in Delhi and
Nagpur will be around 641MHz and 328 MHz respectively.
5.24. For estimating the spectrum requirement for wireless broadband in cities
having population between one to ten Lakh, the penetration rate has
been taken as 23% and 48% for the years 2012 and 2014 respectively.
Being smaller cities compared to Metros, it is assumed that an operator
with 20 MHz of spectrum will install about 50 BTS by the year 2012,
which will be increased to 100 BTS by 2014. The spectrum requirement
as given in table 5.4 works out to be around 22 MHz and 113 MHz for
the years 2012 and 2014 respectively.
Table 5.2 Estimated Spectrum Requirements for Delhi
2012 2014
Max downloaded data throughput required (Gbps) 368 1,922
Download/Upload traffic channel bandwidth ratio 3:1 2:1
Total data Throughput required (Gbps) 491 2,883
BWA Spectrum Assigned to Service Provider (MHz) 20 20
Estimated throughput per cell with 20 MHz Spectrum
70 90
Estimated BTSs deployment by a Service providers 500 1000
Throughputs available with 20MHz spectrum (Gbps) 35 90
Total Spectrum required for providing required
throughputs (MHz)
280 641
Table 5.4 Estimated Spectrum Requirements for Cities with 1-10 lakh
2012 2014
Max downloaded data throughput required (Gbps) 2.8 34.0
Download/Upload traffic channel bandwidth ratio 3:1 2:1
Total data Throughput required (Gbps) 3.8 51
BWA Spectrum Assigned to Service Provider (MHz) 20 20
Estimated throughput per cell with 20 MHz Spectrum
70 90
Estimated BTSs deployment by a Service providers 50 100
Throughputs available with 20MHz spectrum (Gbps) 3.5 9
Spectrum required for providing required throughputs
22 113
5.25. For rural areas, the strategy for providing broadband will have to be
different from cities as unlike cities the availability of optical fiber in
villages is low and for last mile access wireless may be required to be
planned in short to medium term i.e upto 2014. For estimating the
Table 5.3 Estimated Spectrum Requirements for Nagpur
2012 2014
Max downloaded data throughput required (Gbps) 48.6 246.0
Download/Upload traffic channel bandwidth ratio 3:1 2:1
Total data Throughput required (Gbps) 65 369
BWA Spectrum Assigned to Service Provider (MHz) 20 20
Estimated throughput per cell with 20 MHz Spectrum
70 90
Estimated BTSs deployment by a Service providers 150 250
Throughputs available with 20MHz spectrum (Gbps) 10.5 22.5
Spectrum required for providing required throughputs
123 328
spectrum requirements in rural areas a Block has been taken as a unit.
The penetration percentage has been taken as 8% and 20% and
bandwidth required per HH as 2 Mbps and 4 Mbps for the years 2012
and 2014 respectively. It is also assumed that each village will have a
Community Service Centre (CSC) with a bandwidth requirement of 10
and 20 Mbps for 2012/ 2014.
5.26. With these assumptions it is seen (Table 5.5) that a single operator with
20 MHz of spectrum will have to deploy 12 and 17 BTSs per Block to
fulfill the projected demand for the years 2012 and 2014 respectively.
5.27. The other option for providing the broadband is through coaxial cables
used for Cable TV. India today has a large broadcasting sector
comprising 550 television channels and about 85 million Cable TV
households in India. Cable TV networks can be a cheaper and convenient
source of providing broadband to households as cable TV networks
already have access to large number of households. A cable television
(CATV) network is based on broadband coaxial cables. It has a tree like
Table 5.5 Estimated Spectrum Requirements for Wireless Broadband in Rural areas
2012 2014
Number of blocks 6000 6000
Average number of villages ber block 100 100
Number of Households per village 327 334
Percentage of HH having BB 4% 12%
Estimated HHs having BB in a village 13.1 40.1
BB data rates per HH (Mbps) 2 2
BB data rate per CSC 10 20
BW required per village 36.2 100.16
BW required per block (Mbps) 3616 10016
Contention Ratio 10:1 10:1
Max downloaded data throughput required (Mbps) 362 1002
Download/Upload traffic channel bandwidth ratio 3:1 2:1
Total data Throughput required (Mbps) 482.1 1502.4
Estimated throughput per cell with 20 Mhz Spectrum (Mbps)* 40 90
Calculated Total BTSs required to meet the throughput demand in a block 12 17
* For 2012, single sector has been taken and for 2014, three sectors is taken.
structure in through which the signal is transmitted from the head-end
and propagated through the coaxial cable to the users. The bandwidth on
the cable is divided into channels. A channel on the cable can be used for
analog TV or digital transmissions like digital radio, digital TV or Internet
access. One channel can have a bit rate of 30 Mbps or more for the
downstream and normally lower for the upstream, but the bandwidth is
shared among all users connected to the headend. By and large cable TV
networks are analog and one way. These networks require upgradation
for providing broadband.
5.28. International experience suggests that provision of broadband services is
an attractive business avenue for the cable TV sector. There were 451.94
million broadband connections worldwide as per the World Broadband
Statistics for the quarter ending December 2009. Out of these 20.32%
were cable modem connections. The majority of the cable modem
connections were in North America (52.37%). Some European countries
like UK, Netherlands, Germany, Spain & Belgium also have a good
number of cable modem connections.
5.29. Bundling broadband with digital TV channels is a promising proposition.
Operators can provide broadband at competitive prices and still generate
relatively high margins. Most of the cable TV networks, in India, are
analog and are one way. These networks require upgradation for
providing broadband. In some cases the highly fragmented existing cable
TV networks may not be upgradeable and may require total replacement.
The available data suggests that, in India, only 10% of existing cable TV
network i.e. approximately 8 million cable TV connections are capable of
providing broadband access at present.
5.30. Assuming that the average length of cable laid by the cable operator to
each home is 100 meters, for 85 million cable TV homes the total cable
laid is around 8.5 million kilometres. Further, the cable operator is
provided connectivity by MSO on optical fiber which has an average
length of 1.5 kilometres. According to the industry, MSOs have laid
around 30,000 km of optical fiber to provide connectivity to cable
operators besides large backbone fiber network for inter city and intra
city connectivity. At many places they are using the fiber networks of
telecom service providers.
5.31. Considering all the above aspects the Authority has worked out a
framework of implementation of digitization with addressability of the
cable TV network in India by December 2013. The recommendations on
implementation of Digital Addressable Cable System in India were sent to
the Ministry of Information and Broadcasting on 5th August 2010.
5.32. TRAI, in these recommendations, has discussed the investment required
in the setting up of such a system in India and suggested measures and
fiscal incentives for its implementation which would provide digital cable
TV services along with broadband services to the subscribers.
5.33. To provide Internet services, cable operators are required to upgrade
their cable networks so that signals could flow in both directions. They
also need to build a sophisticated end-to-end IP networking
infrastructure in each community they want to serve which is robust
enough to support data subscribers. These include items like Internet
backbone connectivity, routers, servers, network management tools, as
well as security and billing systems.
5.34. The current major broadband technologies deployed by the cable
industry are DOCSIS and Ethernet over cable technology.
• DOCSIS (Data Over Cable Service Interface Specification) provides
bidirectional transfer of signal between a Cable Modem
Termination System (CMTS) placed at the head-end and Cable
Modem (CM) at customer location over the existing coaxial or HFC
network. The Ethernet solution has an Ethernet network, based on
optical fiber backbone and extended LAN technology using CAT5/6
cable as the last mile or Ethernet over Cable (EoC) based on deeper
fiber concept with last mile delivery on existing co-axial cable.
• Ethernet based network is easy to deploy to deliver high speed
symmetric bandwidth through highly scalable network catering to
present and future demand of bandwidth. Also, a combination of
DOCSIS in the backhaul and Ethernet-over-coaxial (EoC) in
distribution network is used in certain cases.
5.35. The digitisation of the cable TV network would involve upgradation of
the distribution network and cable head-ends. In addition, there is
requirement of encryption (CAS), subscriber management system (SMS),
Set Top Box at the subscriber premises and skill development. The total
requirements of fund estimated by different sections of the industry vary
from Rs. 30,000 to Rs. 60,000 crores. Even though there is a wide
variation in the industry estimates of overall investment required for
achieving digitization with addressability, there is no disputing the fact
that the requirement of funds is very large. Therefore the Authority, in its
recommendations, has proposed a number of possible incentives that
can be offered to various stakeholders so that digitization with
addressability is implemented in the shortest possible time and the
transition made is sustained. These include income tax holiday, for the
period from the date of setting up of the digital addressable network, or
1.04.2011 whichever is later, till 31.03.2019, reduction of the basic
custom duty on the major items in digital addressable broadcast
distribution i.e. digital head-end equipments and STBs, to zero level for
the next 3 years and rationalization of the taxes and levies on the
distribution sector. Also the MSOs/LCOs should be eligible to seek Right
of Way (RoW) on non exclusive basis for laying optical fiber being a vital
5.36. Migration to addressable digital systems calls for large capital investment
and so the duties and levies applicable to the broadcast distribution
sector require rationalization. The Authority has recommended that the
Government, as a special measure, allow reduction of the basic custom
duty on the major items in digital addressable broadcast distribution i.e.
digital head-end equipments and STBs, to zero level for the next 3 years.
The cable television industry need to pay service tax and entertainment
tax in the states which varies widely from state to state. Moreover, high/
multiple taxes make the services costlier. In addition to these measure it
was also recommended that MSOs/LCOs should be eligible to seek Right
of Way (RoW) on non exclusive basis for laying optical fiber being a vital
5.37. TRAI has also recommended for the enhancement of the limit for foreign
investment to 74% from the existing 49%, for all MSOs (operating at
national and state level) who take up digitization of their networks with
5.38. Broadband on cable TV has some limitations as well. The present
deployment using DOCSIS version 1 has a limit of 30 Mbps per RF
channel and a subscriber can get a maximum of 3 Mbps. The newer
version, DOCSIS 3.0 is claimed to have a maximum limit of 50 Mbps per
RF channel with each subscriber being able to get upto 20 Mbps. In the
Ethernet option it can deliver upto 96 Mbps per cable section with the
present version supporting upto 32 users. The newer version can support
upto 128 users. In addition, the cost of upgradation of the cable TV
network from analog to digital is high.
5.39. The wireline telecom connectivity as on June 2010 is 9.46 million in the
rural areas whereas in the urban areas it is 26.72 million. When we
compare these figures with the cable TV homes connectivity, the cable
network caters to much larger rural population and promises to be a
potential network through which the broadband penetration can be
achieved. Presently, for providing broadband services to their
subscribers, cable operators take Internet bandwidth from an ISP which
makes their business model less viable. In order to get bandwidth at
affordable rates, if they want to get bandwidth directly then they have to
take ISP licence in either category A (for national level-having entry fee of
Rs. 30 lakh) or category B (for state level-with entry fee of Rs. 20 lakh).
The Authority, in its recommendations on Spectrum Management and
Licensing Framework, dated 11th May, 2010, has proposed
reintroduction of Category C license for the ISPs with a District-wide
jurisdiction. This would enable small operators including the cable
operators to offer Internet service alongwith other services. Since the
intention is to enable small operators to acquire ISP licence, the
Authority has proposed that those operators who have a turnover of less
than Rs.1crore, need not be charged any licence fee. If, MSOs, and more
importantly LCOs in the rural areas, are provided access to nearest
concentration/aggregation point of the national broadband network at
par with ISP, the business model of the cable networks would become
attractive enabling thereby to achieve the twin objectives of the spread of
addressable digital cable TV services and the broadband services to every
nook and corner of the country.
5.40. Examination of various technologies on wireline, wireless and cable has
revealed several limitations in meeting the requirements. We, therefore
need to look for a viable alternative that can meet the needs of high
bandwidth, reliability, scalability and sustainability besides being
economic. It is in this context that an optic fibre network stands out as
an alternative that meets these criteria.
5.41. Optical fiber, which is one of the most promising technologies for the
future, has been mostly laid by the service provider for long haul traffic.
There is only a small amount of fiber in the access network resulting in
only about 0.53% broadband connections working on optical fiber.
However, with increasing bandwidth demand in the access network, fiber
is being increasingly used by the service providers. As more and more
bandwidth is being demanded in the access networks, the fiber has
become more common in this network level. A combination of FTTx
technologies preferably using multi-star topology could be economically
used to meet future bandwidth demand in rural and urban areas. This
topology can be implemented using Passive Optical Networks (PON)
which reduce the amount of fibers from the Central Offices (CO) as
compared to a point-to-point system. One, or fiber pair, from the CO in
the network is split into several subscriber lines by use of passive optical
splitters. These splitters are inexpensive and do not use electronics and
no maintenance and power supply is required. They can be kept at any
convenient location in the network. In the provider’s end, there is a
Optical Line Terminal (OLT) in the CO and at or near the customer
premises there is an Optical Network Terminal(ONT).
5.42. Optical Fiber in the access network is capable of providing high
bandwidth throughput for services (even upto 100 Mbps) such as highdefinition
IP Television (IPTV), video on demand (VoD) etc. Some of the
stakeholders submitted that the futuristic networks can only be created
by deploying the deeper fiber networks within the close proximity of the
users. The robustness of any fiber networks can be achieved with its
layout, and many providers are delivering FTTH & FTTB+LAN on
overhead fiber network in an unplanned structure and are finding
difficult to maintain the QOS.
5.43. In metros and big cities, the demand of bandwidth is leading towards a
situation where FTTH / FTTB will be inevitable. In the USA, for example,
Google has planned FTTH trials with municipalities. They will develop
open access networks offering 1 Gbps. In June 2010, Ireland national
carrier Eircom has announced two large scale, open access broadband
fiber to the home (FTTH) trials for up to 10,000 residential and business
customers in communities.
5.44. At present in India, it is not compulsory to make provision for internal
wiring or telecom service termination equipment while erecting any multi
stories building. There is a need to consider the option of mandating the
creation of internal network by the builders of multi-dwelling units in
such a way that any service provider is able to use it for providing
services to the residents of the building.
5.45. However, the real bottleneck lies in the “backhaul segment”, which
transports the aggregated cellular traffic from the cell towers to the
switching centers. Today, a large part of the wireless backhaul network is
primarily built using microwave that cannot be scaled up to carry the
amount of high-speed multimedia traffic expected to be seen in this part
of the network as the broadband vision is realized over the next few
years. Therefore, there is a need to build a high-speed optical network
based on standardized transport technologies such as next-generation
SDH, DWDM and Carrier Ethernet that reaches up to the last-mile cell
5.46. To fulfill the objective of providing broadband connectivity at every
Panchayat/habitation, there is need to provide state of the art ICT
infrastructure, architecture tools and technology to organize, access and
mobilize information at Panchayat/habitation. For maximum utilization
of broadband capabilities and providing the benefit from convergence of
voice, data and video for improving training, education, service delivery
and governance to rural mass, there is a need to establish Optical Fiber
Cable based high capacity broadband connectivity at every
5.47. Internationally, considering the long term sustainability, security and
reliability aspect among various available technologies, most countries
have adopted Optical Fiber based connectivity for rural needs. It is
observed that all National level broadband plans provide for the reach of
broadband upto rural and remote areas through OF network.
5.48. The Government has proposed to implement a massive programme of
broadband for all, under which all the 250,000 Gram Panchayats in the
country will be provided high speed broadband connectivity by 2012. In
its consultation paper, the Authority has sought the views of the
stakeholders regarding the need to create a national optical fiber network
extending upto villages. Majority of stakeholders supported the idea of
creating optical fiber network upto village level. Some stakeholders are of
the view that wireless technologies are capable of handling the village
requirement and there is no need for OFC upto village level.
5.49. Presently, Optical fiber connectivity is largely available upto the district
headquarters. In the rural areas OFC is available upto block
headquarters. In India about 750,000 route kilometer optical fiber is
available which includes 500,000 Km optical fiber network of state
owned operator BSNL. In rural domain Optical fiber is primarily provided
by BSNL and it is estimated that about 30% of villages having population
more than 1000 have been provided optical fiber connectivity by BSNL.
Status of fiber laid by different service providers is given in the Figure
Figure 5.2 Status of fiber coverage by service providers.
Source: Analysis Mason55
5.50. It can be seen that there is hardly any coverage at the level of Panchayat
and other villages. If broadband is to be extended to the villages then
arrangements need to be made to aggregate village traffic and backhaul it
to the backbone. In the first phase fiber may be laid for aggregating
traffic in the Panchayats and for the backhaul. This would cover about
2.65 lakh villages. There are additionally about 1.15 lakh habitations
with population above 500 which could be taken up in the second phase.
5.51. There are many ways an optical fiber based network can be planned for
rural areas. Intra-block fiber network can be provided through Passive
55 CII Report: Deployment Models and Required Investments for Developing Rural Broadband Infrastructure in
Optical Networks with one or more Optical Line Terminals(OLT) placed at
strategic locations. Single fiber could be taken for a group of villages up
to as far away from the OLT as possible and then a passive splitter would
be used to split fiber into a number of directions so as to serve as many
villages as possible. At the village end the fiber terminates onto an
Optical Network Terminal (ONT) that provides interface for various
services. The block traffic can be backhauled to the backbone at the
nearest node at the DHQ or the any other city. Below the ONT the service
provider would provide his own access network using copper or fiber or
coaxial cable or wireless. The diagram below explains this architecture.
Fig 5.3 Access aggregation and backhaul with fiber
5.52. As per the demand projected in Chapter 4, the bandwidth requirement
per household would be 2 Mbps. The total number of broadband
households would be 40 and 107 and the requirement of bandwidth per
village is estimated as 80 and 212 Mbps in the years 2012 and 2014. The
bandwidth required per block would be 729 Mbps and 1955Mbps in the
years 2012 and 2014. OLTs are commonly available with capacities upto
8 Gbps. The passive splitter split the fiber in the ratio 1:32. For the
number of households projected it would be possible to serve the block
with 2 or 3 OLTs. At the fiber end closer to the subscriber there would
optical network terminal (ONT) which would typically provide Ethernet,
POTS, HPNA and Video ports.
5.53. In the urban areas the service providers would deploy various
configurations of FTTX taking the fiber into households where bandwidth
requirement is high or upto the building for serving multi-dwelling units
or to the curb where a number of discreet houses are to be served. Traffic
from a number of OLTs can be aggregated through Ethernet switches
and taken to the backbone network. In the urban areas the bandwidth
requirement per household is taken as 2 Mbps in the year 2012 and 4
Mbps in the year 2014. The bandwidth requirement for small towns in
the access is about 5 Gbps and 20 Gbps in the access and 452 Mbps and
2 Gpbs in the backhaul at 1:10 contention ration in the years 2012 and
2014 respectively. For the cities the bandwidth requirement in the access
is 80 Gbps and 341 Gbps and in the backhaul 8Mbps and 34 Mbps. For
the metros the requirement is 1452 Gbps and 4477 Gbps in the access
and 145 Gbps and 448 Gbps in the backhaul with 1: 10 contention ratio.
C – Benefits of fiber optic network
• It gives a high bandwidth infrastructure that future proofs the
network. It would be possible to provide bandwidth upto 100 Mbps
through the network.
• It gives high quality and reliable and secure broadband network
• It provides a long term service solution that can provide a host of
existing and as yet unimagined services for the consumer and for
• The network pays back for itself and also provides long term revenue
• It will lead to digital economy
• It will enhance Participation of people in governance
• It will generate source of revenue for the Government
• It will help in disaster management, weather forecasting, fisheries etc
• It will provide boost to cable industry
• It facilitate to provide advanced online education, commercial, medical
• It enables various monitoring including environmental monitoring,
Smart Monitoring (e.g. traffic cams, playground cams) etc.
• It help to generate faster scientific sample analysis.
• It generate the opportunity for various related applications including
software development.
• It provide the ability to work from home or other remote location
5.54. As per tentative estimates the total Capex for laying optical fiber
networks across the country comes to about Rs 65,669 crores. Against
this revenue it is estimated that NOFA will earn an annual revenue of
around Rs 26289 crore consisting a revenue of Rs 3962 crore from
towns, 6193 crore from cities and 9703 crore from Metro and big cities.
Additionally it will earn a revenue of around 6431 crores from its
business in rural areas. Taking 20% of the Capex as annual operational
expenses they would be about 13000 crore. It is seen that the profit
potential of such an enterprise will be of the order of around 13289 crore
per year ie such an enterprise will be able to achieve break even in 5
years time.
D– Cost and Financing
5.55. The cost of laying OFC for rural areas has been summarized in the Table
5.6. It is proposed that atleast a 24-fiber cable would be laid in any of the
sections. Cost of laying each km of cable has been calculated as Rs
2,25,000 which includes the cost of digging, HDPE pipes and the cable.
The central office end equipment has been taken as a pair of OLTs at a
cost of Rs 80,000 each and the ONTs at the cost of Rs 15,000 each.
Table 5.6 Cost of optical fiber cable and end equipment
Calculation of laying fiber and equipment
Cost of fiber, trenching and laying
1 Cost of Optical Fiber (Rs/Km) 30,000
2 Average Digging and pulling Cost of OFC (Rs/ Km) 1,62,000
3 Cost of HDPE Pipes In Rs. Per Km 33,000
4 Total cost of OFC including labour and material (Rs/Km) 2,25,000
Cost of end equipment
5 Cost of OLT per unit 80,000
6 Cost of ONT per unit 15,000
5.56. The total cost of the access aggregation and the backhaul for 6374 blocks
including 3,74,552 villages having more than 500 population is given in
Table 4.7 The average number of villages per block comes to 59. The
following assumptions are made to simplify the planning and arrive at
indicative figures. The deployment is considered to be greenfield.
Considering the total area of the country and the number of blocks the
average radius of the block comes to about 13 km. The distance of
passive splitter is taken as 8 km from the OLT and that of ONT as 5 km
from the splitter. Cost of each OLT is taken as Rs 80,000 and of each
ONT as Rs 15000. It is presumed that running cables on four routes
from the OLT would suffice for the number of villages served by one OLT.
These figures have been used to arrive at a cost of Rs 48127 crores for
the fiber optic access aggregation for all the blocks and Rs 7171 crores
for the backhaul. The total cost of the fiber network to be created by the
proposed agency would be Rs 55298 crores.
Table 5.7 Cost of Aggregation and Backhaul
Cost of Access Aggregation Network and Backhaul for all Blocks
1 Average no of villages per block 59
2 Average block radius(km) 13
3 Optic fiber to splitter(km) 8
4 Optic fiber from splitter to village(km) 5
5 Average backhaul Block to DHQ(km) 50
Access aggregation cost
6 Cost of 2 OLTs (Rs) 160000
7 Cost of ONTs in a block(Rs) 1770000
8 Cost of trenching & laying cable (per km) 225000
9 Cable to be laid per block(km) 327
10 Cost of laying cable per block(Rs) 73575000
11 Cost of cable and equipment 75505000
12 Cost for all blocks(Rs) 481268870000.00
48127 crores
Backhaul Cost
13 Average cable length(km) 50
14 Total length for all blocks(km) 318700
15 Cost of backhaul 71707500000
7171 crores
5.54 If it is presumed that priority would be given to 63 cities identified by the
Jawarharlal Nehru Urban Renewal Mission (JNURM) i.e. 7 Category A
(above 4 million population), 28 Category B (1-4 million population) and
28 Category C(less than 1 million population) cities. To make an
estimation of cost, based on feedback for some service providers, it is
estimated that the Category A cities would require on an average about
1000 route km of fiber, Category B cities about 500 route km of fiber and
the rest of the cities on an average about 300 route km fiber. The total
requirement would, therefore, be about 29,400 route km of fiber at a cost
of about Rs 662 crores. For the remaining 4315 towns if we presume that
100 km of fiber will be laid then the total cost would be about Rs. 9709
5.55 The cost of laying optical fiber cable consists primarily of digging the
trenches, cost of the HDPE pipe, cost of optical fiber cable and cost of the
optical fiber equipments. The above estimate does not include cost of
Right of Way (ROW), generally paid to local Government / agencies
granting ROW permission. Currently when telecom service providers seek
ROW permission, they pay ROW charges averaging approximately Rs.3.0
lakh per kilometer. It has been proposed in these recommendations that
the Government as SOFA will have equity participation of the states
there would be no ROW charges.
5.56 The total estimated cost of creating optical fiber infrastructure rural and
urban areas is as follows:
Table 5.8: Estimated Cost of Optical Fibre Infrastructure Rural & Urban
Area Cost (in Rs)
Rural 55298 crores
JNURM cities 662 crores
Other cities 9709 crores
Total 65669 crores
5.54 A total of 2402998 km fiber is to be laid in the access network and
about 50 km for each block. This gives a total requirement of about of
fiber for all 6374 block. For JNURM cities about 29,400 route km of
fiber will be laid and for remaining 4315 towns about 431500 km fibre
will be laid. Therefore approximately 2545198 Kms of fibre will be laid
across the country. Depending on the soil condition one labour would
be able to do 1-2 meter per day. Taking 2 meter per day for rural
areas the number of Man days would be 1272599000. This indicates
the project will generate 100 man days work for 1272590 people.
C – Institutional Framework
5.55 The backbone IP network, as it exists in India, has been developed by a
number of service providers reaching out to a number of cities and
towns. More investment is likely to be made as the volume of traffic
increases and business requirements dictate increase in outreach. The
access network reaching out to households and businesses would be
developed by the service providers using a combination of technologies in
the urban areas. In rural areas while the last mile would still be best left
to the service providers, it would be the intra block aggregation network
and the backhaul connecting the block to the backbone that may prove
to be the bottleneck for growth of broadband if not given due attention.
No single service provider would have resources to make a suitable
network of fiber which requires an investment of about Rs 48127crores
for aggregation and Rs 7000 cr for the backhaul to be able to cover all
villages above 500 population. The service providers would vie for a
limited number of customers in each village. The total average household
penetration in 2014 is expected to be 20% in a village or 107 households.
Assuming that the most dominant service provider has 50% market
share, it would then have about 54 customers. Building a village to block
and backhaul from the block just for that many customers would be
totally unviable. This is where the Government intervention would be
necessary and a suitable institutional framework would need to be
established to oversee creation and maintenance of the much needed
shared fiber aggregation and backhaul which all the service providers
can connect to in order to serve their rural customers economically.
5.56 The problem of availability of high bandwidth fiber optic network is not
limited to rural areas. Growth of broadband in urban areas too is limited
by non-availability of fiber in the aggregation and the access networks.
The work is initially proposed to be carried out in the 63 cities identified
by Jawarharlal Nehru Urban Renewal Mission (JNNURM) ie 7 cities with
more than 4 million population(Category A), 28 cities with 1-4 million
population(Category B) and 28 selected cities with less than 1 million
population(Category C). It is estimated that the Category A cities would
require on an average about 1000 route km of fiber, Category B cities
about 500 route km of fiber and the rest of the cities on an average about
300 route km fiber. The total requirement would be about 29,400 route
km of fiber at a cost of about Rs 662 crores. The remaining 4315
cities/towns would require about 431500 km of optic fiber cable to be
laid at a cost of about Rs 9700 crores. The proposed institutional
framework can encompass the work of creation of shared fiber
infrastructure in the urban areas.
5.57 It is important to create a suitable institutional framework at national
and state levels with clearly outlined authority and responsibilities.
Creating a national optical fiber infrastructure would involve rational
network planning taking into account state of development of the
network, well planned procurement, efficient management of large
amount of material, management of large labour requirement, organizing
massive investment, quick execution and meeting time schedules. There
are options that may give rise to problems like availability of funds,
difficulty in non-discriminatory sharing of infrastructure, pace of rollout,
network duplication, difficulties in transfer of existing asset to the
company, right of way and general operational problems. It is therefore
necessary to evolve a functional model that would be successful in India
5.58 A number of options were considered for institutional framework for
agency that could build the required network. One option could be to
setup an autonomous national level agency to manage and co-ordinate
the project on mission mode as well as to subsequently administer the
optical fiber network. This agency would be responsible to construct, own
and lease the optical fiber network and would in turn lease out fiber
infrastructure to all telecom service providers and others on nondiscriminatory
and transparent terms and conditions. Though it would
require initial financial support it should in time be able to meet its own
operational expenses. This option has the advantage of autonomy, fast
decision making, centralized planning and procurement, availability of
loans and funds through the Government, ease of coordination with the
other ministries and departments, no ROW problems, creation of
infrastructure is not hampered by viability issues. The second option is
to form a special purpose vehicle (SPV) with public private partnership to
create a nationwide optical fiber network. USOF could invite the options
for investment from various private agencies to be a partner in the
project. Once the project is completed the PPP firm shall maintain the
OFC under a well defined framework. OFC may be leased out to service
providers on demand at predetermined rates prescribed by the regulator.
Revenue earned by this leasing operation may be shared between USOF
and private partners. The advantage of the method is that the
Government being a partner ROW and other clearances may be faster
and because of the private participation the decision making process
may be faster. The disadvantage is the private partner may not perceive
the business as lucrative, the bid amounts may be low and it may be
difficult to carry out the work in the amount of funds made available.
The third option could be to create the optical fiber network by a
consortium of service providers having clearly laid down framework for
its functioning. The consortium may find it difficult to coordinate with
state and central Governments for clearances and ROW. There are
variations of these basic models and all of these needs to be seen in the
light of what has been stated in paragraph 5.58.
5.59 Taking into account the above discussion, the following
recommendations are made:
National Level
o It is proposed that a 100%, central Government owned, holding
company called National Optical Fiber Agency (NOFA) be
formed. The company shall be registered under the Companies
Act of 1956
 NOFA should be headed by a person of eminence and
Board of the company would have complete autonomy
in functioning as available for Delhi Metro Rail
 NOFA would discharge the following functions:
 Carry out top level planning of the shared fiber
network in the country
 Oversee the work of creation of shared fiber
 Centrally organize procurement of equipment, fiber
and other material in order to get volume benefits.
 Plan, install, operate and maintain shared fiber
network in the 63 JNURM identified cities and provide
means to allow any service provider to use the network
for giving broadband connections using any technology
in the last mile.
 Arrange and manage funds from the Government
programmes like USOF
 Debt is to be raised by NOFA and further given to state
level agencies
State Level
o A State Optical Fiber Agency (SOFA) should be formed in every
State with 51% equity held by NOFA and 49% by the respective
State Government. NOFA would be the holding company of all
the SOFAs.
o All the SOFAs, under the overall guidance of NOFA have to
carry out the works related to creation of shared infrastructure
for access aggregation and backhaul in the rural areas and
shared fiber infrastructure in the urban areas where necessary.
In doing so SOFAs would carry out the following activities:
 Plan, install, operate and maintain access aggregation
network in the rural areas to connect various access
network deployed by the service providers to the block
 Plan, install, operate and maintain the backhaul
between block head quarter and the district/state
headquarters and provide means to connect it to any
service providers’ backbone network.
 Plan, install, operate and maintain backhaul for
wireless access networks to be connected to the
backbone wherever they are a bottleneck.
 Plan, install, operate and maintain shared fiber
network in urban areas other than the 63 JNNURM
identified cities and provide means to allow any service
provider to use the network for giving broadband
connections using any technology in the last mile.
 The agency would have option to build, using various
financing models, the required infrastructure and also
buy or lease elements like ducts, manholes, cables or
fibers and associated electronics from service providers
and other agencies.
 Fix large contractors for carrying out the trenching,
laying and equipment installation works. Work in each
state may be given to atleast two contractors
o The SOFAs would pay back the debt of NOFA from the
o The States would take care of all the ROW issues. This would be
one of the conditions for the programme to be taken up in a
State. SOFAs would be allowed to carry out reinstatement and
there would be no reinstatement charges.
o The SOFAs would be given National Long Distance (NLD) licence
with the condition that they will not access the subscribers
directly for providing any service permitted to NLD licencees.
The agencies would pay the designated licence fee.
o NOFA would be responsible for training and awareness
o TRAI would, from time to time, fix the rates at which NOFA (in
urban areas) and SOFAs would lease infrastructure to the
service providers.
D – Time Frame
5.60 A fiber optic network once created provides a infrastructure with
virtually unlimited bandwidth that effectively makes the network
future-proof. A single shared network for reaching upto the villages
would make best use of resources for the country and help the service
providers to economise and offer competitive tariff to the customers.
Such a convergent network allows carriage of signals of all types of
services – voice, data and video. Having said that, the Authority is
conscious of the fact that creating such a network is a time
consuming exercise, a fact that is borne out by the experience of other
countries. Due to the nature of work and likely availability of finance
in installments, the work would need to be broken down into phased
activities and completed as follows:
5.61 The proposed time schedule is as follows:
Table 5.9 Proposed schedule of activities
E – Financing
Sl No Activity Completion Date
1 Decision the Government 31st January, 2011
2 Creation of NOFA 28th February, 2011
3 Addressing letter to States 15th March, 2011
4 Creation of all SOFAs 31st March, 2011
5 Network Planning by SOFA/NOFA 30th June, 2011
6 Finalization of executing agencies 30th September, 2011
7 Completion of trenching and laying fiber for
backhaul and access traffic aggregation
30th June 2012
8 Planning and material procurement by NOFA 31st December 2011
9 Installation, testing and commissioning of
equipment for backhaul from all blocks and
aggregation of all Panchayat villages by SOFA
30th June 2011 to 30th 31st
August 2012
9 Planning, procurement, installation, testing
and commissioning of equipment for rest of the
villages with population more than 500
31st October, 2012
10 Planning and material procurement for urban
areas by NOFA
31st December 2011
11 Laying of cables, equipment installation and
commissioning in phased manner in urban
31st December 2012
5.62 Regarding financing it has been suggested in section C that the State
level agency that will execute the project will owned by central and
state Governments. The Government will make available the funds for
creation of the block level aggregation network and the backhaul. The
company would be eligible to get grants from Government funds like
USOF and MGNERGS. USOF has an available balance of about Rs
13789 cr. The last year collection was 5778.00cr and assuming same
collection for next two years then funds of the order of 24000 cr would
be available. The company can also raise finance from the market.
5.63 Trenching is a major activity in creation of fiber network and involves
huge cost. Supporting trenching activities through Mahatma Gandhi
National Rural Employment Guarantee Scheme (MGNREGS) will
provide a viable solution. Here it is important to mention that
Government has started the Mahatma Gandhi National Rural
Employment Guarantee Scheme (MGNREGS) with an objective to
provide at least 100 days of guaranteed wage employment in a
financial year to every household whose adult members volunteer to
do unskilled manual work. MGNREGS covers the entire country with
the exception of districts that have a hundred percent urban
population. Government has allocated fund of Rs 39100 crore for this
scheme in the current financial year and similar allocations are
expected in the future years. Possibility of funding the cost of the
digging for laying of optical fiber cable upto the villages through
allocated resources for NREGS was explored by the Authority. Once
the proposals are agreed to, the case would be taken up with the
Ministry of Rural Development to include digging of trenches in the
list of permissible works for the MGNREGS.
5.64 It is also recommended that digging of trenches, for laying optical
fiber, may be declared as a permissible item for MGNREG scheme.
5.65 SOFA will undertake the reinstatement work itself or will pay the
reinstatement charges to the concerned agency.
5.66 A total of 327 km fiber is to be laid in the access network and about
50 km for each block. This gives a total requirement of about 2402998
km of fiber for all 6374 block. Depending on the soil condition one
labour would be able to do 1-2 meter per day. Taking 2 meter per day
for rural areas the number of Man days would be 1201499000. This
indicates the amount of work that will be generated for the poor
through this project.
5.67 If financing through USOF and MGNREGS cannot be done to the
extent indicated then Government of India may provide loans through
banks under priority lending with sovereign guarantee.
5.68 The fiber infrastructure will give real benefit to the rural India and
would go a long way in bridging the rural divide and promoting
inclusive growth.
6.1 While infrastructure creation is a basic requirement for the
growth of broadband, it is not a sufficient condition. For
broadband to be adopted, several measures need to be taken by
Government and other stakeholders.
A-1 Definition of Broadband
6.2 According to Broadband Policy 2004, broadband is defined as
“An ‘always-on’ data connection that is able to support
interactive services including Internet access and has the
capability of the minimum download speed of 256 kilo bits per
second (kbps) to an individual subscriber from the Point of
Presence (POP) of the service provider intending to provide
Broadband service where multiple such individual Broadband
connections are aggregated and the subscriber is able to access
these interactive services including the Internet through this
POP. The interactive services will exclude any services for which
a separate license is specif ically required, for example, real-time
voice transmission, except to the extent that it is presently
permitted under ISP license with Internet Telephony”.
6.3 Initially broadband was mainly used for various elementary
applications like e-Mail, voice chatting and text information.
For these applications, speed of 256 kbps was considered
sufficient. Presently, broadband has become the leading
delivery system for a wide range of content and applications.
This change in the usage pattern has enhanced the bandwidth
requirement per household. Therefore, the existing speed of
256 kbps may not support many of these applications and
there is a need to review the existing definition of broadband.
6.4 Stakeholders have varying views over the definition of
broadband. Some of the stakeholders advocated the retention of
current definition with 256 Kbps download speed. They were of
the opinion that higher threshold will deter growth of evolving
but promising technologies and will reward technologies which
may offer the speed but offer none of the economies. They also
opined that since technologies keep on developing for the
bandwidth enhancement, it is better left to the market
dynamics and only QoS need to be defined.
6.5 Some stakeholders wanted that the definition of broadband
should be considered from end-user point of view. In view of
use of video and bandwidth intensive applications and the
futuristic demand, the minimum speed of broadband
connection should be enhanced to at least 2 Mbps. This
benchmark for speed should be annually reviewed.
6.6 Another school of thought was that there is no need to define a
minimum speed criterion for broadband as minimum speed
does not deter the delivered speed and service providers will
offer speeds based on demand requirements and competition. It
is pointed out that several players are already offering high
speed plans (as per bandwidth requirements) with high
download limits to customers. In their opinion, the most
important consideration while defining broadband is that the
definition is simple to understand and reflects the intended
user experience in terms of supporting applications and
services. They suggested setting a definition that is realistic,
meets the present requirements and evolving over time.
6.7 Some of the stakeholders are of the opinion that the existing
speed of 256 Kbps in the definition of broadband should be
replaced with at least 512 Kbps as it will not only improve the
user experience but will also help in achieving the higher
growth of broadband.
6.8 Based on assessment of potential applications that can run on
the broadband network in 2014, CII (Confederation of Indian
Industries) in its report56 has projected the growth of the
current broadband network up to 2014(refer figure 6.1).
Figure 6.1: Broadband Speed : Vision 2015
56 India 2009-2014: Broadband roadmap for inclusive Growth
Source: CII- India 2009-2014: Broadband roadmap for inclusive Growth
6.9 As per CII projection, the proportion of connections with speed
below 256 kbps will gradually reduce over the next 5 years and
the proportion of connections with speed above 256 kbps will
increase over the next 5 years. They have also projected that
based on aspired application demand, connections of speed up
to 256 kbps will cease to exist by 2014 and at least 50% of all
connections will have speeds above 2 Mbps.
6.10 Another linked issue is what should be the definition of wireless
broadband. The present definition of broadband emphasise on
“an always on data connection” and having “minimum
download speed of 256 Kbps” to an individual subscriber from
the PoP of service provider. The existing definition is inclined
towards fixed broadband access, wherein there is a dedicated
resource (DSL, Cable, Fibre etc.) between service provider’s PoP
and customer premises, which can provide an always-on
connectivity to the users. However, in case of wireless
networks, a broadband connection is not always-on, as the
resources like channels using spectrum are allocated to a
subscriber only on his request and remain till the termination
of data connection by the user. Once the data connection is
terminated, the resource becomes free for allocation to another
6.11 In addition, the speed of Internet access to ultimate end user is
based on the available throughput of the BTS, number of
subscribers present in a particular cell site and their location
w.r.t the base station. Available speed is higher near the BTS
but lower towards cell edge. Moreover, resource-intensive use
by one wireless broadband customer impacts the speeds at
which others can communicate. This is unlike the dedicated
user access technology used in wireline broadband systems,
where sharing of capacity occurs only at the PoP and not at the
access level.
6.12 ITU (International Telecom Union) in its document “Core ICT
Indicators 2010” released in January 2010 has defined
broadband as follows:
“Fixed broadband refers to technologies at speeds of at least
256kbit/s, in one or both directions, such as DSL (Digital
Subscriber Line), cable modem, high speed leased lines, f ibre-tothe-
home, powerline, satellite, f ixed wireless, Wireless Local
Area Network and WiMAX.”
“Mobile broadband refers to technologies at speeds of atleast
256kbit/s, in one or both directions, such as Wideband CDMA
(W-CDMA), known as Universal Mobile Telecommunications
System (UMTS) in Europe; High-speed Downl ink Packet Access
(HSDPA), complemented by High-Speed Uplink Packet Access
(HSUPA); CDMA2000 1xEV-DO and CDMA 2000 1xEVDV. Access
can be via any device (handheld computer laptop or mobile
cellular telephone etc.).”
6.13 The stakeholders in favour of having separate definitions for
fixed and mobile broadband mentioned that the cell sites for
mobile networks have constantly changing mix and volume of
voice and data uses, which put varying strains on the available
spectrum resources. This limits the spectrum resource that
can be allocated to any one user and to all users within the
area served by a certain cell. What services or applications can
be supported successfully and with high quality by any network
will therefore depend on the customer density in any BTS area.
6.14 Those not in favour of separate definition of wireline and
wireless broadband were of the view that in this era of fixed
mobile convergence especially for the Broadband traffic, there
should be a uniform policy irrespective of the access
6.15 Some of stakeholders mentioned that the definition of broadband
should evolve as technologies evolve. There should be a
periodic trigger for review of definition. In their opinion the
definition of should involve a number of QoS parameters,
including overall upload and download speeds, latency etc.
Categorization based on fixed and mobile will not allow
definition to be technology neutral.
6.16 Basically there are two issues for consideration in the definition
of broadband. First is whether there should be separate
definition of wireline and wireless broadband and second is
what should be the minimum speed for a broadband
connection. With the evolution of various 4G technologies like
LTE, we can achieve maximum bandwidth upto 140 Mbps,
which are comparable with wireline technologies. In such a
scenario there seems to be no need to define wireline and
wireless broadband separately.
6.17 Customer satisfaction is the prime issue and there has to be
some minimum quality of service that service providers must
deliver to their customers. Service providers must dimension
their infrastructure such as to ensure delivery of a minimum
bandwidth to their customers. If no definition for broadband
connection is stipulated, then a customer may not know what
speed he is supposed to get from a broadband connection
resulting in his dissatisfaction. Our aim should be to ensure
provision of quality broadband services in the country. The
Authority has, therefore decided to adopt a common definition
for both wireline and wireless broadband.
6.18 As regards the speed, since 2004, the focus has shifted from
content for the general Internet to content for broadband
services. Focus over localised content has now given way to
data and multimedia-rich content requiring high-speed
connections. The Authority is of the view that though there is a
need to upgrade the minimum download speed of broadband
connections in a phased manner, the need of the hour is to
focus on developing a broadband platform which easily
supports capacity upgrades to match the bandwidth demand of
future applications as they appear.
6.19 US has upgraded the minimum speed for a broadband
connection from 200 kbps to 768 Kbps. In Germany broadband
is defined as a connection with minimum 1Mbps. European
Union has envisaged provision of broadband speed of 30 Mbps
by the year 2020. In Japan no specific definition of Broadband has
been provided. However, generally available broadband speeds are in
the range of 50-100 Mbps. Similarly UK has Universal Service
Commitment in broadband at a level of 2 Mbps by 2012.
6.20 Setting a very high speed for broadband right away may affect
the affordability of broadband especially for rural people, who
will be the major consumers of broadband in the coming years.
Further, the network required for supporting high speed
broadband need to be put in place in most parts of the country
before enhancing the speed.
6.21 The Authority recommends that:
Broadband connection may be defined as
“A data connection using any technology that is able to
support interactive services including Internet access and
support a minimum download speed of 512 Kilo bits per
second (Kbps)”.
6.22 It is to be noted that the upload speed will atleast be half the
download speed. This definition of broadband (Both Wireline
and Wireless) given in para 6.21 above, which will be
effective from 1st January 2011. The stipulated download
speed of 2 Mbps will be effective from 1st January 2015.
A-2 Right of way
6.23 Obtaining Right of Way (RoW) permission has become a major
hurdle in rolling out new telecom infrastructure which requires
laying of cables and thereby provisioning of advanced
broadband services in a time bound manner. RoW is one very
important factor which dissuades service providers to venture
into creation of new infrastructure for telecom
services/broadband services.
6.24 It has been the experience of service providers that the local
authorities take long time in granting permission for RoW and
in a number of cases, the operators have to approach multiple
agencies for obtaining RoW clearance. This not only delays the
rollout plans of the service providers but also increases the
cost. For granting permission, the municipalities / local
authorities levy fees and bank guarantee from service
providers. These charges are not uniform across the country.
6.25 Some of the stakeholders mentioned that though the Indian
Telegraph Act of 1985 has guaranteed right of way to telecom
operators, multiple agencies such as the local Governments,
municipalities and State Governments have developed their
own norms for providing permission of ROW and are levying
exorbitant and erratic charges which range between few
thousands to Rs. 26 Lakh per km for laying cable. They were of
the view that there is a need to have appropriate policies in
place for ensuring access to right of way at reasonable prices,
and preferably at no charge to facilitate broadband services to
the public. They suggested that RoW to all operators should be
available on restoration basis or any other thing connected with
or related to any work undertaken for laying of cables,
otherwise it may not be economically viable to roll-out new
telecom services.
6.26 Some of the stakeholders suggested the formulation of a National
Telecom Infrastructure Policy (NTIP) for RoW purposes. They
mentioned that State Governments and local bodies including
municipalities demand rental and other recurring RoW charges
and there have been even occasions where service providers
have been compelled to give free bandwidth in lieu of RoW
permission / restoration charges etc.
6.27 Some stakeholders are of the view that RoW permissions for
broadband (i.e. laying OFC, Ducts) must be treated separately
and on priority relative to normal ROW permissions as already
recommended by TRAI previously. In their view there is a need
to re-emphasise and reiterate the RoW guidelines issued in the
year 2005 and 2008 and coordinate with various State
Governments for its uniform implementation.
6.28 In order to streamline the provisions of Right of Way (ROW) for
telecom services, a committee of secretaries was set up by
Group on Telecom and IT Convergence (GOT-IT) in the year
2000. The committee studied the ROW policies of various
state Governments and submitted its report containing
model guidelines for streamlining the ROW provisioning. This
report was circulated to all State Governments on 24th August,
6.29 These model guidelines clearly states that that all State
Governments should extend the facility of rights of way for
laying underground Telecom cables to all licensees without
levying any compensatory charges / levy /lease rentals /license
fee or imposing free bandwidth requirements or asking for
revenue share/ cashless equity etc. There is also a clear
statement that the only admissible charges are reinstatement
charges or charges directly linked to the restoration work.
6.30 TRAI has sent several recommendations to streamline the ROW
procedures under various recommendations, DoT in response to
TRAI’s recommendations on “Growth of Broadband” sent in
January 2008, has stated that “ROW procedure including
streamlining / rationalizing ROW cost is State subject and
therefore Central Government cannot mandate the State
Governments. The recommendations of state level committee
formed to suggest streamlining the RoW procedures in year
2000 can be recirculated to state Governments and Union
territories”. DoT circulated this report vide their letter dated 9th
April 2008 to all the States and the Union Territories.
6.31 It is a fact that despite various steps taken by Government,
problems such as levy of very high charges, lack of uniformity
in decision making processes, non-availability of single window
system for ROW clearance, long time in granting permissions
and non-availability of detailed GIS maps etc. have remained
unresolved and are impending growth of telecom network in the
country. There is a need to ensure uniform procedures
especially the charges for RoW permissions across the country
for timely and faster rollout of telecom infrastructure.
6.32 Section 10 of the Indian telegraph Act 1885 states that
“Power for telegraph authority to place and maintain telegraph
lines and posts – The telegraph authority may, from time to time, place
and maintain a telegraph line under, over, along, or across, and posts
in or upon any immovable property:
Provided that –
a. the telegraph authority shall not exercise the powers
conferred by this section except for the purposes of a
telegraph established or maintained by the [Central
Government], or to be so established or maintained;
b. the [Central Government] shall not acquire any right other
than that of user only in the property under, over, along,
across in or upon which the telegraph authority places any
telegraph line or post; and
c. except as hereinafter provided, the telegraph authority shall
not exercise those powers in respect of any property vested
in or under the control or management of any local
authority, without the permission of that authority; and
d. in the exercise of the powers conferred by this section, the
telegraph authority shall do as little damage as possible,
and, when it has exercised those powers in respect of any
property other than that referred to in clause (c), shall pay
full compensation to all persons interested for any damage
sustained by them by reason of the exercise of those
6.33 Section 12 of the Indian telegraph Act 1885 states that
“Power for local authority to give permission under section 10,
clause (c), subject to conditions – Any permission given by a local
authority under section 10, clause (c), may be given subject to
such reasonable conditions as that authority thinks fit to impose,
as to the payment of any expenses to which the authority will
necessarily be put in consequence of the exercise of the powers
conferred by that section, or as to the time or mode of execution of
any work, or as to any other think connected with or relative to
any work undertaken by the telegraph authority under those
6.34 The perusal of the provisions of the Indian telegraph Act 1885 indicates
that RoW permission is required from local Authority and it must be
subjected to reasonable restrictions.
6.35 The Authority recommends that Government may fix and
notify the charges for Right of Way in consultation with the
State Governments on priority basis and ensure time bound
availability of RoW to telecom service providers after due
intimation to the agency concern.
A-3 Availability of Spectrum
6.36 In the “National Broadband Plan”, the Authority has emphasised
the need to lay optical fibre for fulfilling the demand for
broadband in future, however, it is conscious of the fact that in
view of the increasing applications available on smartphones
and the facility of mobility provided by wireless broadband, a
large number of consumers in cities will use both wireline and
wireless broadband. Fixed wireless when in office or home for
using applications requiring higher speeds and for longer
duration like IPTV, full motion video, e-medicine, e-commerce,
e-learning etc.; wireless broadband when on move for chatting,
accessing social networking sites, using location based
services, video calling etc.
6.37 In view of the foregoing, the Authority in its recommendations of
May 2010 has noted that the next five years are going to see
the spread of 3G as well as the introduction of 4G services
enabling subscribers to benefit from data and application
services. An increasing availability of smartphones with
significant processing capacity and a wide array of applications
is resulting in higher requirements of spectrum. It is estimated
that the total requirement of spectrum in the next five years
would be of the order of 500 to 800 MHz including 275MHz for
voice services alone.
6.38 In order to fulfil the future demand of spectrum, the Authority
has noted in its recommendations of May 2010 that “the
availability of spectrum for commercial wireless services in our
country falls short of requirements and compares unfavourably
with other countries. Although India has the second largest
network in terms of number of mobile phones, it is lagging
behind most countries in terms of introduction of 3G, BWA and
other data based services. This is primarily because of the
uncertainty and delayed or non- availability of spectrum for
these services. It is noteworthy that LTE is being introduced in
other countries this year and is likely to be deployed widely in
the next 2 years. If we wish to introduce high speed wireless
services, essential for the economic and social development of
our country, then it is necessary to take quick and firm
decisions to vacate the spectrum useful for the commercial
services and relocate some of the existing non-commercial
services in other bands. The objective of this exercise would be
to identify the possibilities of vacating higher amount of
spectrum for commercial services including drawing up a
definitive timeframe while simultaneously taking due
cognizance of the requirements of Government agencies
including Defence and Department of Space. A time bound
action plan is needed to be prepared on priority basis covering
objective review of the usage of the available spectrum, actual
need of the spectrum, possibility of relocating in other less
important band and refarming of the vacant spectrum”.
6.39 The Authority reiterates the following recommendation sent
as part of its recommendations on Spectrum Management
and Licensing Framework, dated 11th May 2010
6.40 The Authority recommends that it should be entrusted with
the task of carrying out a review of the present usage of
spectrum available with Government agencies. The
objective of this exercise will be:
• to identify the spectrum actually in use by them;
• to assess the efficiency of spectrum use;
• to identify possible alternative solutions;
• to examine the creation of a separate defence band;
• to draw up a suitable schedule for release of spectrum
for Telecommunications.
B-1 Awareness
6.41 Another major reason for low uptake of broadband in India is
lack of consumer awareness regarding the benefits and
applications available through broadband. Amongst the nonusers,
the level of awareness about broadband is fairly low,
however, even amongst the users of computers, mobile phones
and Internet, there is a lack of awareness about the potential of
broadband w.r.t the kind of services & applications it can
6.42 Presently most of the broadband growth is taking place in urban
areas. The common man in the villages is largely unaware of
the benefits and potential of broadband in his day to day life.
According to IAMAI-IMRB survey, about 84% of the rural people
are not aware about Internet. Further, 38% do not feel the need
for it. A fairly high percentage of respondents either need
guidance in using a PC (28%) or Internet (25%). A proportion of
respondents indicate the need for infrastructural setup such as
lack of electricity, Internet connection to appropriate access
points (refer figure 6.2).
Figure 6.2: Reason for non Usage of Internet among Rural users
Source: IAMAI survey: Internet for Rural India 2009
6.43 Some of the stakeholders suggested the need for taking up
specific initiatives for increased awareness about the benefits
of broadband based Net services through the mass media
(including TV and Cinema screens) as also demonstration
kiosks at shopping centers and shopping markets.
6.44 One of the stakeholders suggested that the Government should
involve associations and NGOs at the grass root level in the
awareness building campaigns and all these initiatives should
be funded by the Government. Programs similar to the CCAOI
Project Gyan, a 10 day Internet learning Program which is
offered for Free from Cybercafés/ CSC’s and taught in the
preferred language of the citizen, could be promoted by the
6.45 There is a need for mass awareness campaign to sensitize the
people about broadband and its benefits – through mass media
as well as through other means of communication including
physical demonstration through road shows. Government may
identify suitable agencies for this purpose and allocate fund for
awareness campaign across the country.
6.46 Department of Information Technology has drawn up an
awareness campaign for NeGP which include:
• Communication Need Assessment Exercise
• NeGP awareness stalls at key events and conferences
across the country
• Advertisements in TV, Radio and Press
• CSC awareness through personal contact and van based
• Publicity films on subjects like e-District, MCA21, CSCs etc
• Support to Conferences and Workshops
This program could perhaps include awareness regarding
computer and broadband.
B-2 Cost of CPE (Customer Premises Equipment)
6.47 High Cost of PC and other access devices commonly known as
CPEs is also one of the impediments in the spread of
broadband in the country. Though, over the years, the cost of
computers has come down and there are newer devices such as
smartphones, but for most users the cost of access device
remains a challenge. Compared to 150-180 million new mobile
phones, we are adding just about 8-9 million PCs every year;
the mobile phone base is touching 700 million while the PC
base is just about 40 million.
6.48 There is a general lack of personal ownership of CPE/ digital
gadgets for accessing the Internet. IAMAI study found that CSC
and cyber café are the primary mode for accessing Internet in
rural areas.. More than 70% of rural users access Internet
through CSCs/cyber cafés. (refer figure 6.3)
Figure 6.3: Modes of Internet Access in Rural Areas
Source: IAMAI survey: Internet for Rural India 2009
6.49 Most of the stakeholders agreed that there is a need to establish
easy accessibility and affordability to Internet devices like PC,
laptops, netbooks, mobile Internet devices and other broadband
enabled devices. In their view this can be enabled by
eliminating or minimizing tax on Internet access devices, such
as computers, net books, mobile Internet devices, etc. They
also mentioned that reducing the taxes and duties on these
devices to Zero will help affordability and hasten the pace of
broadband penetration and proliferation. Another suggestion
was that duties levied on inputs (parts, components and
spares) and finished products used in providing broadband and
Internet services should be reduced to levels equivalent to that
for mobile phones. It was also suggested that for SMEs, 100%
depreciation should be allowed in the first year for PC’s and
broadband Customer Premise Equipment (CPE) including
modems and routers. Some also suggested that one PC upto Rs.
30K and/or Laptop (upto Rs. 45 K) should be exempted from the
Income of the individual and self employed on the production of valid
6.50 Some of the stakeholders were of the opinion that there is still a
considerable gap between PC penetration and Internet
penetration which indicates that incentives to CPEs do not
necessarily mean increased Internet penetration. Therefore,
incentives if any should be given to innovative and new gadgets
that specifically promote Internet use.
6.51 Currently computers and broadband equipment get 100%
depreciation in three years, though the advancement of
technology often makes such equipment obsolete much earlier
than that. In order to stimulate investment in the equipment
sector and also to enable consumers to keep abreast of
technological advancements, accelerated depreciation allowance
may be provided for these equipments i.e. 100% depreciation in
the first year itself.
6.52 The Authority recommends that Government may review the
Duties levied on inputs (parts, components and spares) and
finished products used in providing broadband and Internet
The Authority also recommends that Customer Premise
Equipment (CPE) including modems and routers should be
considered for 100% depreciation in first year.
B-4 Training
6.53 The term digital literacy is gaining importance in today’s
scenario. The goal of Digital Literacy is to teach and assess
basic computer concepts and skills so that people can use
computer technology in everyday life to develop new social and
economic opportunities for themselves, their families, and their
6.54 The English literate population in the country is only 91 Million
and the computer literate are only 87 Million58. Nearly 25% of
Indian population stay in cities, out of which, 32% are
computer literate. PC literacy is a major challenge in rural
areas – only 3% of the total rural population is PC literate. In
various other countries including the USA, computer literacy
programmes have been rolled out to promote digital literacy.
Though there is no standard definition, digital literacy
57 & 10 Microsoft Digital Literacy Curriculum :
58 IAMAI – IMRB : Vernacular Content Report – 2009
generally refers to a variety of skills associated with using ICT
to find, evaluate, create and communicate information.
6.55 A stakeholder suggested that Government of India may launch a
National Digital Literacy Program (under National Skills
Development Corporation) that creates a Digital Literacy Corps,
increases the capacity of digital literacy partners and creates
an Online Digital Literacy Portal.
6.56 Broadband is not only through computers but through different
media. The literacy is required at various levels. Several
software periferals support usage through graphics.
Nevertheless, there is a need for focus on digital literacy.
B-5 Content and Application Development
6.57 The distribution of Internet users by language suggests that the
largest share (about 30 percent) of Internet users speaks
English, followed by Chinese (20 percent) and Spanish (8
percent). At the same time, the percentage of English-speaking
Internet users dropped from 80% in 1996 to 30% in 2007,
reflecting the fact that an increasing number of non English
speakers are going online. (refer figure 6.4)
Figure 6.4: Top ten languages (by Internet users) on the Internet, 2009
Source: Internet World Stats, quoted in ITU world telecommunication
development report 2010.
6.58 Most of the content on Internet is in English although the
English speaking population constitutes only 8% of India.
Websites that currently exist in local languages are insufficient
to cater to the needs of the users. The content that is available
today on the Internet is largely in English and is not
customized to local needs. The task is to make this content
available in Indian languages.
6.59 There are 18 official languages in the country. There are more
than 36,000 Hindi newspapers, more than 4000 Bengali
newspapers, more than 4400 Tamil newspapers published in
the country, including regional variants of the same
publication. In the list of top 10 most read newspapers in India
[as per Indian Readership Survey (IRS) for Q1, 2010] 5 are in
Hindi, 4 in other regional languages and only one in English.
The aforementioned figures provide a clear indication of the
large proportion of population which is inclined towards non-
English content for information assimilation.
6.60 Presently, there are only around 1,250 websites providing
vernacular content59. There is also a need for a higher
proliferation of vernacular user interface (keyboards, software
etc) to facilitate usage of local language content.
6.61 Some of the stakeholders mentioned that Government should
ensure availability of the Government services in the local
languages. They also suggested that Cybercafés/CSC’s and
public access systems should be encouraged to promote local
language Internet. Another suggestion was that small
organisations developing people centric content should be
encouraged and incentivised. Content policy which incentivises
content providers to provide content in Indian languages & to
telecom operators who partner with such content providers was
59 http://www.iamai.in/PRelease_detail.aspx?nid=1744&NMonth=12&NYear=2008
7.1. ICT in general and broadband in particular contribute substantially to
growth of GDP and towards poverty elevation by improving access with
7.2. As per study, 10% increase in broadband penetration accounts for 1.38
percentage increase in theper capita GDP growth in developing
7.3. Currently in India, the penetration of broadband is 0.8% as against the
tele-density of 60.99 as of Sep’2010. The number of broadband
connections is only 10.3 million as against a target of 20 million by the
year 2010.Therefore, there is an urgent need to facilitate rapid growth of
7.4. Towards this end, a National Broadband Network will be established.
This network will be an open access optical fibre network connecting all
habitation with population of 500 and above. This Network will be
established in two phases. The first phase covering all cities, urban areas
and Gram Panchayats will be completed by the year 2012. Phase II will
see the extension of the network to all the habitations having a
population more than 500, to be completed by the year 2013.
7.5. A National Optical Fibre Agency (NOFA) will be set up to establish this
broadband network. NOFA is proposed to be a 100% Central
Government-owned holding company. Besides being a Holding company,
NOFA will also establish the networks in all the 63 cities covered under
Jawahar Lal Nehru Urban Renewal Mission (JNURM).
7.6. A State Optical Fiber Agency (SOFA) would be formed in every State with
51% equity held by National Optical Fibre Agency(NOFA) and 49% by the
respective State Government. NOFA would be the holding company of all
the SOFAs.
7.7. All the SOFAs, under the overall guidance of NOFA will establish the
networks and backhaul in the rural areas and in the urban areas other
than those cities covered under Jawahar Lal Nehru Urban Renewal
Mission (JNURM).
7.8. The optical fibre network would support backhaul bandwidth
requirement for provision of broadband and facilitate broadband growth.
7.9. This network will be established at a cost of about Rs 60000 crore. It will
be financed by USO fund and the loan given/ guaranteed by Central
7.10. The National Broadband Plan envisages provision of 75 million
broadband connections (17 million DSL, 30 Million cable and 28 million
wireless broadband) by the year 2012 and 160 million broadband
connections (22 million DSL, 78 million cable and 60 million wireless
broadband) by the year 2014.
7.11. Right of way will be issued to the executing agency without delay and
without any charges but subject to reinstatement by the concern agency.
The work related to national broadband network will be taken up in a
state only on an undertaking to this effect.
7.12. Government may notify the charges for Right of Way in consultations
with the State Governments on priority basis and ensure availability of
RoW to telecom service providers to provide various telecom services.
7.13. The program is expected to bring immense benefit when fully operational.
The estimated revenue of NOFA and all SOFA is expected to be Rs 26000
crore per year.
7.14. The Network will provide easy access to high speed data and information
to citizens, promoting thereby the efforts in the field of education, health
7.15. The optical fibre network would support following bandwidths:
 10 Mbps download speed per household in 63 Metro and large
cities (covered under JNURM) for every wireline connection by the
year 2014.
 4 Mbps download speed per household in 352 cities for every
wireline connection by the year 2014.
 2 Mbps download speed per household in towns and villages for
every wireline connection by the year 2014.
* Upload speed would be half of the download speed.
7.16. The objective of national broadband Network is to provide fibre to home
in 63 cities covered under JNURM, Fibre to kerb in all other cities (0.5
Km from any residence).
7.17. In order to enable cable industry to go fully digital, the recommendations
of TRAI dated 5th august 2010 on “Implementation of Digital addressable
system in India” will need to be implemented on priority basis.
7.18. In order to ensure affordability of Customer premises equipment cost,
Government may review the duties levied on inputs and finished
products used in providing broadband and Internet services.
7.19. Customer premises equipment including modem and routers used for
Internet and broadband may be considered for 100% depreciation in the
first year.
ICT Development Index

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