Broadband in India
Where is it and what do consumers say?
We are in 2015 and this is the year when India is supposed to overtake the United States of America to become the second-largest user of Internet in the world. If estimates are to be believed, we may do that soon. However, the available data contradicts the estimates and the country is as yet at the bottom of the pyramid as far as speed, reach and awareness of Internet is concerned. This report is a reality check on not just the existing gaps between vision and achievements, but also customers’ perceptions of critical dimensions so far as service providers are concerned.
The Internet story in India started on 15 August 1995, when Videsh Sanchar Nigam Limited (VSNL) launched the Gateway Internet Access Service (GIAS). Subsequently, six nodes were established at Mumbai, Delhi, Chennai, Kolkata, Bengaluru and Pune. Each GIAS node was connected to the Internet and had a bandwidth of approximately 10 Mbps. To get connected to the Internet, one had to have a VSNL connection.
Realizing the significance of Internet services, the government allowed private ISPs to set up the required infrastructure in the country within a couple of years. It also established Telecom Regulatory Authority of India (TRAI) in 1997 to regulate services, including fixation/revision of tariffs. TRAI’s mission was to create and nurture conditions for growth of telecommunications in the country and ensure that India played a leading role in the global information technology domain.
Vision Broadband: A Reality Check
National Telecom Policy 2012 has the vision of ‘broadband on demand’, wherein it expects telecom infrastructure to enable all citizens and businesses, both in rural and urban areas, to participate in the Internet and Web economy, thereby ensuring equitable and inclusive development across the nation. It aims to provide affordable and reliable broadband on demand by 2015 and to achieve 175 million broadband connections by the year 2017 and 600 million by 2020, at a minimum 2 Mbps download speed and higher speeds of at least 100 Mbps on demand. It also aims at providing highspeed and high-quality broadband access to all village panchayats through a combination of technologies by the year 2014, and progressively to all villages and habitations by 2020.
However, as per the consultation paper published by TRAI in September 2014, against a target of 175 million broadband connections by 2017, only 60.87 million have been achieved. The country is not even halfway near meeting the target for a service that is considered almost a basic necessity in many developed countries.
Attraction, Availability, Affordability
There are many factors that have prevented the widespread adoption of broadband in India. One of the primary issues has been failure on the part of service providers to make the medium sufficiently attractive amongst the masses. A large part of the country’s population is not yet aware of the significance of the Internet and how it may change their lives for the better.
Another major issue has been the lack of availability. Had the medium been available everywhere, the awareness and attractiveness part would not have been a major challenge. Affordability has been another point. In recent years, technological developments have reduced the cost of personal computers and cheap smartphones are helping in spreading the reach of the Internet; even then, the scope for reducing hardware costs is still there. Another affordability issue comes from the subscription tariffs – these too can be reduced to attract mass usage of Internet in the country.
Beyond Urban: The Way Forward
Each service provider in the country has their largest footprints in the urban regions and minimal in the semi-urban, while the rural – with the maximum number of households in the county – remains almost neglected. While they do not see much business potential in the rural belts (not much local content and services to attract the population there, they say), a few experts believe it is the limited availability and awareness that makes for a compelling reason for content providers to focus on localized products.
The other challenge for broadband penetration, especially in rural areas, is that nearly 70 per cent of the market in India is controlled by state-owned BSNL and MTNL. Private players have therefore found it tough to penetrate the market.