Daily Archives: 15th May 2006

Broadband: Content would choke

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Content is the king. Really? I have reasons to doubt my earlier assertions. I was under the impression that content would drive the future growth of Broadband. Indeed, it was a general impression one could get from the media.

However, it hasn’t happened. Barring the mobiles, there hasn’t been much movement on the same. Even in mobile segment, the charges are usurious (in the garb of value added services). A company looking to expand it’s services in the rural areas cannot go alone with it all.

Hence, the voice sevices contribute to the bottom line majorly. Analyse any plan offering from the cross section of the operators and spot the difference. You would need to have an IQ of above 150, be a part of the famed MENSA group (I am neither) and perhaps better than the marketing department of the telecom companies.

Content clearly has failed to drive the volumes. I was looking forward to streaming video on a “better than dial up” broadband, which clearly disappoints (even in the best case scenario). However, the only thing that really works is the radio (more on that sometime later).

This post was influenced by a write up in Business Week. (Be warned of the flash/ blinking adverts/ pop ups and all the scum you associate with a badly designed website- admittedly the content is important; or use Opera’s famous content blocker).

The lead story mentions about the content ratio and the cost it takes to distribute bandwidth.

One megabit per second doesn’t sound like that much, but ISPs spread that bandwidth out over their subscribers. Analysts estimate that ISPs sell around 30 times more bandwidth to their end users than they can connect simultaneously to the Internet…..On the broadband network, the oversubscription means that one megabit-per-second connection to the Internet is enough to serve 40 DSL accounts, each at a maximum speed of 768 kilobits per second, typical for low-end DSL (The “extremely LOW END is what we have in India courtesy the idiots you know of). So the cost of providing data to each DSL is about 25 cents to 50 cents a month per customer.

BellSouth Corp.’s chief architect, Henry Kafka, uses the assumption that the cost of providing a month’s worth of data to the average user, about 2 gigabytes, costs the company $1. That’s a fairly small amount compared to the $25 to $47 a month BellSouth charges for DSL, but then the company has to pay for sales, support, maintenance and a host of other costs….But if the customer starts watching Internet TV like the average household watches regular TV, 8 hours a day, BellSouth’s cost would go up to $112 a month.

This assumes importance because BSNL is planning to get in IPTV/ server based movie downloads. So, you could start downloading a movie (typically 1.5 GB), make babies, rear them, send them to school and perhaps see them into adulthood and by that time the movie downloads would be “half finished”. Okay, this is an exaggeration, but you get the idea about sorry state of “broadband”.

A higher upload/download ratio would cripple their networks making it useless even for the Pakistanis to bomb in the event of war. Of course, Chinese would be eager to sell it again at the “lowest cost” and the media would be swooning and foaming at their mouths about the “Chinese Technology”.

Hence, we could only uncork the bubbly once the issues are settled for the backend and the last mile access. If VSNL stops pimping it’s network (which again was public infrastructure sold to private interests), it would make a lot of sense to end users like you and me. Perhaps a better file sharing experience? Or streaming videos of the latest blockbusters on your desktop/ TV?

Pricing the content again is a contentious issue. This hasn’t been settled so far. This explains the rationale behind Anil Ambani’s driven Broadband “Enterpise” (which is choked on it’s own vomit for the time being) to own content. He would leverage it across his cross holdings (DTH/ IPTV/ Mobiles) and earn fat commisions in the long run if he manages to sign up the famed “millions”.

(On a second thought, the bozos up there surely dream up the millions in a jiffy).

Content? We’d have to watch and I’d reserve my judgement for another day.

Adios Pramod Mahajan

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Sorry to have learnt that you are no more Mr. Mahajan. This is a humble tribute to you.

The English media is divided over his death. There were claims that he was the next “prime ministerial candidate”. Who knows about the sudden turn of events or the what the future might have held for him?

His stint as a Communications Minister would be remembered. It was under his “rule” that the mobile companies “unleashed” competition. The business dailies and magazines were swooning about the “mergers and acquisitions”. Little realising that the present impasse would be unwarranted. We have a notional “competition” and each one is aping to be the next BSNL clone.

He was removed from his post midway. The exact circumstances elude my memory though.

Another of the glaring instances was the denial of a mobile license to MTNL and instead Airtel was happily romping up it’s capacity. Indeed, it was Department of Telecom that called the shots in it’s hey days. It might have been “tempered” a bit (by not making news for ALL the reasons), yet old habits die hard. Any new incumbent in the dingy, (though airconditioned) files and rat infested office in the Sanchar Bhawan, would be loath to let go off this cash cow.

However, Mahajan was acutely aware of media management. He was “sauve” personality and addicted to giving away interviews. Little he realised that he was rearing a hydra headed monster by feeding on the appetite for 24 hours news channels. The same folks in the media questioned BJP (traditionally anti Hindu) about the “Shining India” campaign. Agreed it was flawed to the nth degree, yet, it would be patently wrong to write off the BJP totally. The poll arithmetic curiously saw the return of Congress (with the election symbol that mostly resembles the famous “air wiper” and a middle finger for all the “Indians”) and the Left for the first time at the Centre. Even though the Congress polled far less votes than BJP.

This irony of errors saw the return of Mahajan to the opposition benches. BJP has lost his fund raiser (if that is true as per media reports) and it’s “Laxman”. Though, it would be hard to quantify as to how exactly he mirrored the famous mythological figure.

Adios Mahajan. RIP.