India Broadband and Telecom Update

India Broadband and Telecom Update

There is a lot of noise in the media without anything major happening on ground. BSNL has finally started its broadband services. The user experiences have been mixed. Some of them happy after a sustained download recommend it highly. Others after a downtime recommend it as “crap”. Hence, any objective assessment becomes impossible. There is a strong case for introducing some kind of quality norms. It is imperative given the massive broadband push planned for all. TRAI should wake up and do something about it.

So now we now that BSNL’s plans to introduce broadband were not altruistic. A closer scrutiny of the list of cities that it has launched so far reveals the fall in the subscriber base. Therefore, the big bosses got jittery and went in an overdrive. I remember the advertisement about 4 years back. BSNL had made a huge splash in advertising fair in Kolkata and its ads said that broadband is coming soon. This has happened after 4 years; something is better than nothing.

A big advantage that we have while reporting the telecom scenario is that we are not affiliated to any business or media group. Hence, it becomes much easier to see and report the various issues objectively. Why telecom and why not anything else? Telecom helps connectivity. It is a matter of time that given the broadband thrust, videophones would be a reality. We need that kind of networks to sustain the bandwidth demand. Why not? Mobile telephones have revolutionized the way Indians talk, albeit with fits and starts and the perennial commercial disputes between the operators. BSNL through its mobile services has demonstrated that one does not need fancy super stars and “contest dhamakas” to run their show. The quality is a big let down but given their reach to over 95% land mass, players like Tata’s must be wondering as to why they ever entered this business at all. It is a matter of speculation though.

Given the recent buzz in the media about BSNL raising huge amount of capital to fund its expansion, it is an idea that is never too late. As I see the Optic Fiber being laid in my city, even in the far-flung areas, one thing is for sure. BSNL is serious about its commitments. It maybe a prelude to its disinvestment too. Imagine this 5 years from now. Given the spread of broadband with BSNL’s huge subscriber base and its exchanges, it would command a HUGE price in the market, if and when it is put up for sale. In the alternative scenario, BSNL is proving the private sector wrong; they want to insist that they, as a government run organization can compete on equal footing with everyone else. It remains to be seen as to how they realize their potential.

In this backdrop, the Cellular Operators are crying themselves hoarse over the delay in the introduction of 3 G services. I was surprised to see a forceful argument seen in Financial Express by Cellular Operators Association of India about the need for the same. Well, first and foremost is the juvenile idea that 3 G services would do what broadband is doing for wire line services. One simple argument is that we do not have that kind of spectrum to support the same. On the other side, let these operators bring down prices to more manageable levels through price cuts and localizing the handset manufacture. Only then, it would make reasonable sense. 3G services are elitist; given the high price of handsets (which would come down anyway); I have a reason to doubt the same. It took almost 5 years for the handset prices to come down to manageable levels; something that a common man can think of buying one. As it is these operators charge fifty percent of the recharge coupon upfront. Why not concentrate on bringing down the prices further? Given the growth of the mobile telephony business, upgrading to networks even at a “marginal cost” would escalate the prices. For that matter, Wireless Access Protocol and GPRS were called as “killer applications”, same people talked of always on connectivity. Now it transpires that there are not many people interested in the same. The GPRS enabled handsets are still way to expensive.

Then why they persist with the idea of 3G? First and foremost is the reason that equipment manufacturers speak through these associations. Witness the flurry of activity in media over the presence of this high fliers coming in India and arguing for a rapid spread of 3 G services. A more pertinent point is that companies like Airtel or Hutch would then go on an overdrive about the “latest technology” and milks the consumers. Typically the corporate types. They have enough money to throw about anyway.

I feel that it may be more plausible to introduce WiFi connectivity on a massive scale. There could be a role for everyone by sharing the infrastructure costs. Heck, these people talk of taking India being a “super power” but we do not have quality connectivity at all.

The third development is that of Reliance. I had earlier mentioned that telecom business would be going to the younger brother. Their broadband roll out plans has been put on hold for the time being. Yet, they have started with Dial up connectivity in select areas. One thing that gets me is that despite TRAI ruling of anything less than 256 kbps not as broadband, they are still marketing their services as broadband. It remains very expensive given the data limit.

On the other hand, they have started taking advantage of their web world connectivity on a massive scale. On select packages, their offers are exciting for as low as Rs.12 per hour. Given the thrust on gaming and video chat, they could soon be miles ahead of competition. Read VSNL. They remain bad as ever especially in the home segment. For the high paying customers, VSNL is ever ready to keep up the service requirements. Why is it that they do not attend to the same detail when it comes to an ordinary home user? Smug in their belief that nothing can go wrong, they are happy to provide below average services though. Wait and watch this space. Reliance is going to bleed its competition despite whatever others insist.

In this regard, the other operators had objected to Reliance offering unlimited talk time on their specific recharge coupons. They called it as anticompetitive. They had filed a complaint in this regard to TRAI. Well, it would take days and days to narrate the ways and means to rebut their charges. Every one has skeletons in their cupboards. Let them not rattle it too much. For the first time ever in my life, I have been able to think of calling unlimited to any other Reliance customer across their networks across India. Moreover, of course, I never have had any issue with their services in the past 2 years that I own Reliance. Therefore much to recommend to others.

Telecom is a dynamic industry. It is indeed difficult to track it from multiple sources. I really wish that there were a free and fair committed reporting in the mainstream. Free and fair can some times land you with lawsuits too. This is off topic but recently a website tracking the Indian media was forced to shut down after being given a legal notice. I am not aware of the exact details but it seems that people in high places cannot tolerate criticism even if much of is valid. Let the head of Sify come to these forums; he would get a clear idea about what his customers feel about him and his company. Truth does not get much bitter than that.

Discuss on: Sify Broadband, Tata Indicom, Airtel Broadband, Reliance Broadband, MTNL – BSNL Broadband, Dial Up, Others

This post was submitted by Dr. Abhishek Puri on the Broadband Blog on Techwhack.