 "India's broadband nirvana")
Rahul Khullar, chairman of Trai, India's independent regulator of the telecommunications business, recently spoke at a seminar on mobile subscribers being plagued by low-speed internet connectivity and broadband growth in the country being dismal. Club that with the regulatory decisions, spectrum allocation and service provider clampdowns by the government in recent years, Khullar couldn't be further from the truth.
India sorely needs to buck up in the broadband race and we need to do it now.
The number game
Before we look at the broader aspect of the broadband situation in India, here are some significant numbers:
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According to the recent Avendus Report, India has more than 160 million active internet users, of which 86 million access internet using their mobile devices. This also means that 46 per cent of the country relies on accessing the internet through broadband connections either from their home or office.
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India ranks 122 in the world for fixed broadband penetration with only 1.1 per every 100 inhabitants having access to fixed broadband.
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With 12.6 per cent of the population accessing internet in the country, India ranked 145th among the countries with the percentage of individuals using the internet.
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In India, broadband has already generated nearly nine million direct and indirect jobs, while a one per cent increase in broadband penetration could add $2.7 billion or 0.11 per cent to Indian GDP in 2015.
- At 9.5 per cent, India ranked 75th in regard to percentage of households with the internet in developing countries.
Broadband in India has historically been associated with fixed technologies and for this reason penetration has always been limited to major cities and towns. However, the largest potential lies in the small-screen mobile broadband market. While the world focuses on 2.5G, 3G and 4G connections, it is critical to take stock of the industry environment and competitive landscape that offer wire-line broadband services or offerings.
Despite the vast user base, low average broadband speeds have been a major deterrent when offering compelling services to consumers, especially those involving heavy data usage like mobile video, music and gaming. This is also an area where the next growth is going to come from, especially in the rural areas.
The future of broadband revolution
In the National Telecom Policy 2012, the government laid out an ambitious target of 600 million broadband subscribers in total by 2020. However, the onus to achieve this target lies primarily with the service providers.
A number of stakeholders are part of the developing broadband market in India, but each faces a unique set of challenges to implement solutions and get the ball rolling.
Newer technologies: On the fixed side, DSL continues to hold the major portion of the local fixed broadband market in India. Emerging technologies such as fibre and cable are making waves. Fibre has had an important role to play in developed markets. Due to the high throughputs it offers, the technology can provide greater bandwidth, security and flexibility but in India the opportunity is limited by high deployment costs. This needs to be addressed if we truly want to progress to be an inter-connected country.
More broadband frequency bands equal more spectrum and higher data growth:
There is an immediate requirement to make more spectrums and radio waves available to service operators for deployment of newer technologies in order to increase broadband speeds. Why? According to Nokia Siemens Networks' MBit Index study in 2013, the consumer consumption of data has never been higher, with the country seeing a 92 per cent increase in mobile data traffic last year. Broadband prices in India will fall drastically with this telecom foray. Increased penetration of devices through affordable mobiles and tablets is driving this trend and the need for service providers to upgrade their core and backhaul network infrastructure to cater to this demand has never been higher.
Responsible and service provider friendly regulations: According to the IAMAI 2013 study, India's average connection speed is 1.3 Mbps, the lowest among Asian countries. Only 2.4 per cent of India's internet connections have speeds higher than four Mbps and barely 0.3 per cent have 10 Mbps or higher. The Indian government last year revised the minimum broadband speed in the country for download speeds from 256 kbps per second to 512 kbps. We agree that this is a step in the right direction but this needs to be taken up a notch if we are to catch-up with the emerging as well as developed economies.
Although we are facing functional and regulatory challenges, there is a positive outlook to be found in India's telecommunication industry. A number of factors are contributing to India's telecom growth engine:
- Improving economy
- Rapid expansion of the country's middle class population
- Low tariffs
- Low prices of data capable handsets
- Highly competitive market created by the government and the regulators
While we have a positive outlook for the coming years, Indian service providers remain under significant pressure to stay profitable in the face of a lower voice ARPU, data deluge driven by video streaming, mobile data, cloud computing and internet-connected devices. To develop and introduce new revenue generating services to the market quickly, carriers need to lower investment risk by minimising capital and operational costs. In addition, their product and architecture decisions must take into account the needs of future services and provide a scalable, open and secure infrastructure. Open standards-based software-defined networking approach is one of the most promising way to enable carriers to accelerate service creation and build networks that deliver a customised end-user experience.
Nikhil B Shah
Director, Edge and Virtualisation Services, Asia/Pacific, Juniper Networks
Director, Edge and Virtualisation Services, Asia/Pacific, Juniper Networks
