Wire­line Broad­band Growth is Beyond DSL

DSL con­tin­ues to serve as the dom­i­nant broad­band ac­cess tech­nol­ogy, but the stake­hold­ers will need to lever­age tech op­tions like cable to grow faster

Voice&Data - - CONTENT -

Fixed-line In­ter­net and broad­band in In­dia have, year after year, been elu­sive tar­gets. The Broad­band Pol­icy of 2004 had set a goal of achiev­ing 9 mil­lion broad­band users and 18 mil­lion In­ter­net users for the year 2007, and of 20 mil­lion broad­band users and 40 mil­lion In­ter­net users for the year 2010. None of that, how­ever, was achieved, even when the broad­band was de­fined as a 256 kbps al­ways-on In­ter­net con­nec­tion only. Sev­eral ar­gu­ments have been put forth on why the broad­band tar­gets have been hard to achieve. One of the key rea­sons cited is that the fixed-line PSTN sub­scrip­tions, which are the prin­ci­pal ve­hi­cle for car­ry­ing DSL-based broad­band con­nec­tions into of­fices and homes, have been on a con­tin­ued de­cline for the past sev­eral years. It is ar­gued that this de­cline has, in turn, di­rectly im­pacted the growth of DSL con­nec­tions.

Another ar­gu­ment has been that the rel­a­tively low PC user base in In­dia acts as an in­hibitor for adop­tion and us­age of fixed­line broad­band. Also, while there is a rel­a­tively higher in­ci­dence of smart phones, which could be ef­fec­tively used to ac­cess the In­ter­net over a fixed-wire­less net­work like Wi-Fi, that alone is not enough to cat­alyze the growth of Wi-Fi as a broad­band last mile. Smart­phone us­age over Wi-Fi also hap­pens more when PCs are used in the first place.

Key De­vel­op­ments

Even as the in­dus­try closed the year 2012 at 25.33 mil­lion In­ter­net sub­scribers and 14.98 mil­lion broad­band sub­scribers (which were still way short of the 2010 tar­gets), the Depart­ment of Tele­com (DoT) took a rather bold decision of re­vis­ing the qual­i­fy­ing speed for broad­band to 512 kbps, vide a July 2013 no­ti­fi­ca­tion.

While this didn’t nec­es­sar­ily lead to a rise in broad­band num­bers un­der the new def­i­ni­tion, it did have some pos­i­tive im­pact on the state of broad­band qual­ity in the coun­try. Most sig­nif­i­cantly, TRAI re­ported at the end of De­cem­ber 2013 stated that the min­i­mum down­load speed has been in­creased from 256 kbps to 512 kbps. The to­tal fixed-line broad­band sub­scribers were re­ported at 14.54 mil­lion in 2013, ac­cord­ing to TRAI.

State-run op­er­a­tor BSNL led the fixed broad­band mar­ket seg­ment with a 71.91 per­cent mar­ket share and a to­tal of 13.18 mil­lion broad­band sub­scribers, fol­lowed by Bharti Air­tel at 1.47 mil­lion sub­scribers and MTNL at 1.11 mil­lion sub­scribers. Their sub­scriber shares stood at 8.02 per­cent and 6.06 per­cent, re­spec­tively. You Broad­band and Hath­way Cable were the other sig­nif­i­cant play­ers, with 2.07 per­cent and 2.02 per­cent sub­scriber shares, re­spec­tively. Other play­ers ac­counted for the re­main­ing 9.93 per­cent of the broad­band sub­scribers, as per TRAI data at the close of 2013.

In the fixed nar­row­band seg­ment too, BSNL led with 84.30 per­cent sub­scriber share and 3.19 mil­lion sub­scribers, fol­lowed by YOU Broad­band at 0.17 mil­lion sub­scribers and Bharti at 0.08 mil­lion sub­scribers, as per TRAI.

Dig­i­tal sub­scriber line (DSL) con­tin­ues to be the dom­i­nant ac­cess tech­nol­ogy used in the coun­try for pro­vid­ing fixed broad­band ser­vices and prior to the change in broad­band def­i­ni­tion (to a speed of 512 kbps), DSL con­sti­tuted 84.82 per­cent of the to­tal broad­band sub­scribers, fol­lowed by Eth­er­net LAN (6.09 per­cent) and cable mo­dem (5.24

While DSL would con­tinue to lead as the pri­mary ve­hi­cle of fixed­line broad­band de­liv­ery, other ac­cess tech­nolo­gies like cable have much po­ten­tial that can be tapped into.

per­cent). Fiber and leased lines were the other fixed broad­band tech­nolo­gies. Fixed wire­less tech­nolo­gies like Wi-Fi were also be­ing used by some ser­vice providers as a key ac­cess tech­nol­ogy.

What Next?

While DSL would con­tinue to lead as the pri­mary ve­hi­cle of fixed-line broad­band de­liv­ery, other ac­cess tech­nolo­gies like cable have much po­ten­tial that can be tapped into. It is im­por­tant to note in this con­text that one of the key fac­tors lim­it­ing the de­vel­op­ment of the last-mile ac­cess in­fra­struc­ture has been the right of way (RoW) is­sue.

Re­cently, it was re­ported in the main­stream me­dia that DoT was con­sid­er­ing to cre­ate a spe­cial ISP li­cense cat­e­gory for the cable TV op­er­a­tors. An­a­lysts have ar­gued that such a move could po­ten­tially un­lock a vast pool of last-mile fixed-line re­source that could be lever­aged to de­liver broad­band into mil­lions of new house­holds in the small towns and even in the ru­ral ar­eas.

Spe­cial ISP li­censes for cable TV op­er­a­tors could bring them into the tele­com fold and thus equip them with the reg­u­la­tory ap­provals for pro­vid­ing broad­band ser­vices to their ex­ist­ing sub­scribers, at least in prin­ci­ple, to be­gin with. It is es­ti­mated that cable TV op­er­a­tors serve around 100 mil­lion house­holds, most of which are un­cov­ered by broad­band. This could also help ad­dress the RoW is­sue ef­fec­tively.

Another im­por­tant seg­ment that has much po­ten­tial to grow, while suc­cess­fully ad­dress­ing the RoW is­sue as well, is the fixed-wire­less ac­cess seg­ment of Wi-Fi. Newer Wi-Fi ac­cess tech­nolo­gies like 802.11n and 802.11ac could suc­cess­fully help ad­dress the last-mile ac­cess chal­lenges for a wide range of de­mo­graphic distri­bu­tions, both in the met­ros and tier 1 ci­ties as well as in tier 2-3 ci­ties and towns.

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