Business Today

Mbps unplugged

Kushan Mitra        Print Edition: Jan 8, 2012

A decade ago, we were promised that broadband would transform India. High-speed access to the Internet and applications would energise an economy starved of information access, the logic went, and the government would do everything possible to deliver the promise. India has had five telecom ministers since and several entrepreneurs who thought they had the business model to make widespread broadband access happen.

Yet, to date, there are just 10 million broadband connections in India, by the estimates of the country's telecom regulator. Assuming five people use a connection, that works out to some 50 million people with access to high-speed data services - an impressive number elsewhere in the world, but not in a country with 1.2 billion people. More so when you consider that broadband is defined as anything faster than 256 kilobits a second, versus a two megabits per second, or Mbps, threshold in other parts of the world.


Economic growth rises by 1.3 percentage points for every 10 per cent rise in broadband penetration


Often, the question posed in a development context is: should India focus on potable water delivery, sanitation and electricity for its masses, or on broadband access? The answer, to put it bluntly, is that it is not an either-or situation. Both should ideally be driven with a mix of policy measures and private enterprise. Just to put the benefits of broadband in context, instant information flows open up massive economic opportunities in transactions of all kinds.


OTHER GAME CHANGING IDEAS

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The World Bank estimates there is an increase of 1.3 percentage points in economic growth for every 10 per cent increase in broadband penetration. Not just that, data heavy Internet access will spawn an information economy - we already have early signs of it out there through Internetbased businesses valued in excess of $1 billion - which will need an entirely new ecosystem to create content and applications.

Telecom companies like Bharti Airtel and the state-run Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd are pushing their copper and optic fibre-based broadband networks but the traction there has a slow pace. There may be another solution in sight: the wide reach of broadband data dongles from wireless telecom service providers such as Reliance Communications or MTS has played a large part in a spurt in web traffic in India over the past two years. These dongles, despite price plans that inhibit heavy usage, have given an estimated five million laptop owners across the country a taste of high-speed data.

The answer to fast-paced broadband network expansion, then, is clearly wireless technologies. Wireless, as mobile phone networks have shown, makes the task of delivering phone services simpler. No digging in crowded areas to lay cables, no right-ofway delays, no blind pussyfooting around sewer and water pipes or electric cables, no monsoons to wait out. In sharp contrast, wireless networks need a place to mount a tower and a power source to keep the radio and electronics running.

Wireless broadband providers such as Tikona Digital and Tulip Telecom have shown how such networks can deliver, and set the stage for entrants such as Reliance Industries, which is said to be readying big plans for a rollout of so-called fourth-generation wireless technologies. Knowing Reliance, it will aim for big scale and this will come through rockbottom pricing, as mobile phone service providers have shown.

Telecom businessmen such as Sunil Mittal of Bharti Airtel believe wireless technologies available in the market can deliver what wired broadband delivers today - data at two Mbps. Fast access at rates affordable to millions of Indians will spur demand for cheap and smart devices such as tablets and smartphones. That has enormous implications for education, vocational training, and health care, not to mention other benefits in everyday commerce.

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