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

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.