A shortcut to broadband

Implications of Bharti's tie-up with OneWeb

A few days before the government launched its Digital India campaign, Bharti Enterprises, which owns Bharti Airtel, India’s largest telecom services company, announced that it had acquired a strategic minority stake in OneWeb, a global initiative aimed to provide low-cost internet. The other stakeholders include Qualcomm, Coca-Cola, Virgin and Airbus. Bharti Airtel is OneWeb’s preferred partner wherever it operates, which is essentially South Asia and Africa, though others too can use the service. OneWeb intends to put 648 low-orbit satellites in space between 2017 and 2019, which will be used by telecom companies like Bharti Airtel to provide a whole suite of services: 2G, 3G, LTE(long term evolution, a standard for wireless communication of high-speed data) and Wi-Fi. As phone calls through satellite phones involve a slight lag, it is safe to assume that Bharti Airtel will use OneWeb essentially to offer internet in the hinterland.

This is a clear indication that the forthcoming telecom battles will be fought over data. Reliance Jio, which hopes to enter the market by the end of the year, has big plans for the data market and has invested large sums of money to create the backbone for that. Other companies, too, are investing more and more resources to beef up their data capabilities. Currently, the telecom network in the country offers voice services almost everywhere, but internet access is patchy. The government had drawn up a plan to link all villages through a broadband network but it is hopelessly behind schedule. This is where OneWeb fits in. Internet access can be provided through the existing mobile telephony network, fibre-optic cable or satellite. Upgrading the mobile network to improve the data throughput and laying a fibre-optic network will take a lot of time and money; doing the same through satellite can save time as well as money.

This really is the shape of things to come. Technology companies the world over are thinking of ways to make inexpensive internet available across the world, especially in developing countries. Google, for instance, is working on a project that aims to provide internet through hot-air balloons and gliders. OneWeb seeks to address the same problem. Satellite-based telecom services, to be sure, have been launched in the past too – but with limited success. The difference is that these were meant to provide services in remote areas, while OneWeb is about universal internet access. OneWeb will complement Bharti Airtel’s existing network. Users will move seamlessly between the current network and OneWeb, without even knowing it. To some extent, that will help the company decongest its network and ease the burden on its spectrum. However, the success of OneWeb will depend on the price of the receiver, especially because one receiver can cover a house, hospital or school – not a whole village or colony. The challenge for Bharti Airtel will be to provide it at a low price, without any subsidy. Or else, it will become like the DTH business, where the heavily-subsidised set-top boxes have eaten into the profits of the service operators.