Broadband Problems in India

I have been wanting to do a post on what plagues broadband in India for a while – a problem which is probably among the biggest hindrances to the growth of Internet businesses in India.

The latest issue of Businessworld addresses this topic in an article aptly call ‘the Hindu speed of Internet access’. (:D)

A birdie once told me that it had got something to do with VSNL and their monopolistic methods, however, Businessworld lists the following chief reasons for the state of broadband in India (which as per the fraudy definition for India is upwards of 256 kbps, while for the rest of the world upwards of 2 mbps).

a) Evidently the biggest deterrent has been the cost of the last mile (laying down optic fibre to reach the end customer), which is ‘as high as 90 per cent of the total cost of wireline’ to the telecom operators and the government has refused unbundling (access to the last mile network of the largest landline operator, BSNL, to private players.) Also see: An article in Hindu about the same issue and a very good read on Wikipedia about the the last mile – it even plagues the US.

b) The profits from the mobile business are high and the costs low compared to broadband and thus there is no incentive for Telecom companies to push broadband. Businessworld suggests that the answer might be allowing non-telecom players to offer the last mile pretty much like ISPs offer their services.

c)  An alternative solution would be to get the last mile problem solved via WiMax and although companies such as BSNL/MTNL and Bharti have done trials, the rollout has been stuck because India is still to release spectrum. [I don’t fully understand the spectrum issue – in another post maybe]

d) Costs: Retail Broadband costs in India are 5 times those in Japan and Korea. In my perspective that’s only half the story because what’s worse is that downloads are charged for. A 2 mbps BSNL connection has monthly rental of Rs. 3300 and a download limit of only 20gb!

 

The article paints a rather bleak picture indeed for businesses ranging from e-learning to e-governance, and of course e-commerce.

 

Oh, and that doesn’t stop the government from doing a good PR job. They proudly announced 2007 to be the year of the broadband (and have failed to notice that it is coming to a close). Plus stories abound about how we will get free 2 mbps internet by 2009 – “All citizens to receive complementary 2 mbps internet.”

 

We live in hope.

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