There are hosts of complex interrelated issues that need to be enumerated for the launch of broadband services by BSNL.I shall try and lay out a case. The current euphoria about broadband was started by the present government coming into power. Our communications minister has a direct stake in a popular TV channel in the south. Over the past few years, there has been an unregulated growth of the cable industry. There was a need felt to regularize the spread. Hence, the Conditional Access System was introduced. However, in the scheme of the things, it has been a failure.
Telecom offered a perfect platform to regulate the flow of the TV channels, as well as would give a direct indication of the number of subscribers. This is a long-term plan to introduce pay per view channels including niche content that would be chargeable. ADSL provides a tried and tested vehicle of delivery to the homes.
Part of the grand reason is the spread and reach of BSNL because this was the defacto service provider before the current telecom industry was opened to private players. Worldwide too, the traditional phone companies are wiring up homes through optic fiber, but that is a different story.
Now let us display the spread of Internet in bit more perspective. India has the lowest per capita of personal computers. This industry has been strangled by high import duties and irrational tax structures. The major access is through dial up which against explains that BSNL is leading with the maximum number of subscribers. This is because most of us do not have any option except this service provider. In fact, we are its mercy because these people are under no obligation to ensure connectivity at all times. My experiences with BSNL have remained very bitter but this is not the thrust of the article here.
What do we need broadband for? A minuscule minority would be interested in having the same for online gaming or file sharing. That leaves the rest of us. Dialup could be sufficed in majority of the cases for people who wish to either check mails or stay in touch. This has been given a go by and dial up charges remain very expensive.
As far current media reports go, BSNL is due to launch its services in the metros by 15th of January rest of India, by around first week of February. However, since the official confirmation has not been received, it remains a matter of conjecture though.
By all indications there is going to be a data cap on the downloads or uploads. Though BSNL has a good optic fiber network, the upstream remains choked.
In this backdrop, Reliance is speeding up the things to introduce its broadband by the end of next month.
It is the realization on the part of these companies that data is going to be the driver for the future revenues. Voice calls have taken a beating in the past few years and do not remain a significant source of revenue. Even if broadband is introduced, much remains to be seen as to how the current phase is carried out.
What needs to be done urgently?
First and foremost is the unbundling of the local loop. BSNL owns majority of the copper wires and competition should be allowed to provide access. It is interesting to note that British Telecom also resisted the opening up of its loop. Now every 10 seconds there is a person signing up for broadband. Our very intelligent bureaucrats obviously did not want any threat to the monopoly of the behemoth. Unbundling the local loop to private players would have provided cheaper broadband. This remains another sob story that majority of the recommendations of TRAI were shot down as they were deemed unfit for the present state of telecom.
Why is the government in the telecom business anyway? They ought to have exited out a long time back. BSNL is growing fatter on its own monopoly and the much-touted social objectives of rural telephony remain pathetic. Broadband is not going to change things overnight.
However, I strongly suspect that the Access Deficit Charge levied on the mobile operators and indirectly on to us, is being used to cross subsidize the plans of BSNL. The rapid set up of the mobile services could not have been possible otherwise.
BSNL can hurt the other long-term players because there can be budgetary provisions to prop up the state structures. The private players offering broadband services are restricted to metros only is because they are aware of the paying capacity of the people subscribing to their services.
In the end, it is the consumers suffer in the great battle that is being fought. Reliance is going to change the broadband scenario in a significant manner just the way cheap tariffs ensured that mobiles became a necessity rather than a luxury. They are not angels either but know the first mover advantage. Data remains the key to the survival in the telecom muddle in this country. Let us see how these people slug it out.
This is not the last word on the state of affairs. I strongly feel that the coming year would be the year of broadband. For all the cynicism, I am still hopeful that someone would genuinely make cheap Internet access a possibility.
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I appreciate your article on broadband very much. What role do you think WiMax will play in India during the next year or so? Thanks in advance. Tom
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