WEFE Wonders About The Fate of BROADBAND – Its Bread And Butter

“Never look back,” said Rudyard Kipling, “not even in anger.” But human nature seldom follows script. While the telecom industry in the country is preparing for the next level of growth through new digital initiatives, how can we forget (and forgive) the hassles we suffered due to the hurdles that prevented the implementation of an effective broadband network in India in the past.

 Immediately after India witnessed the uproarious presentation of the Digital India and Smart Cities 100 initiatives, an industry report ranked Indian telecom industry the worst in Asia Pacific in terms of broadband speed. “Will high-speed broadband remain a fairy tale in my lifetime?” laments a typical Indian who has been aggravated with the 3G/4G services offered on his/her mobile network. And there are reasons galore for such expression of grief. If you care to compare the broadband subscriber figure between India and its peers, it becomes evident that rural broadband still remains a dream for India at least for the next 5 years.

With around 120.88 million subscribers comprising wireless and wired services, India’s broadband customer base comprises just 26% of 3G and 4G subscriber base of China Mobile alone. According to ‘Measuring the Information Society Report’ of 2015 published by ITU, India is ranked 135 in both the access sub index and use sub-index, which are essentially measures for Telecom Infra & penetration indicators. However, let us look back at the hurdles that prevented the accomplishment of an effective broadband network in India in the early days.

Regulatory Hurdles

While it is an established fact that fiber networks are the most viable medium for delivering increased data capacity, the poor quality of service (QoS) and call drop issues are rightfully attributed to lower investment in fibre and backhaul infrastructure in India. Regretfully, less than 20% of the towers in India are backhauled, (compared to an average of 80% in countries like the US, China and Korea) accentuating the need for an effective policy that should have givens due importance to fibre deployments. However, industry reports tell that India deploys an average of 15 million kilometers of fibre every year; whereas current demands indicate it needs to increase to at least 50 million kilometers per year.

The worst part of the whole story revolves round the fact that all the players, that also include state owned MTNL/BSNL are only eager to connect their base stations with fiber, totally ignoring the rural areas. Had the relevant governmental departments emphasize the importance of connecting the rural areas too right at the beginning, the scenario would have been different today. TRAI’s September 2015 report ruefully reveals that India’s rural teledensity is less than 50%, while the urban stat shows 15% or more.

Deficiency in Fibre Infrastructure

Ever since the advent of broadband in India during the last decade or so, the regulatory authority in the country failed to formulate any positive broadband strategy that could help address the digital divide and boost the country’s GDP. Incidentally, World Bank assumes that a 10% increase in broadband penetration accelerates economic growth by 1.38% in developing countries. What’s more, the Indian telecom sector was hit under the belt by the onslaught of multiple issues and procedural delays typically associated with governmental departments.

Telecommunication companies in India (Telcos) who got their fingers burnt in 2G reminded the industry that investment in India’s telecom sector could be a crucial issue from which one needs to save his skin. Moreover, the counterproductive policies that immediately followed such delays and willy-nilly implemented without having a futuristic outlook, made the scenario worse for the investors. A solo regulatory framework facilitating swift decision making and transparency among the stakeholders could address the challenges in rolling out a proactive broadband infrastructure.

Capital-intensive Issue

Indian telecommunication companies are financially bothered on account of two major issues. While one of these contributes to the rising spectrum prices, the other involves the heterogeneity of the networks they have chosen to operate on. On one hand, the post-haste transition from 2G to 3G and then to 4G/LTE required substantial investments in spectrum and supporting technologies, while on the other, the ongoing FTTH investments in India proved decidedly capital-incentive, especially in rural areas where the penetration level is far below the national average.

However, as regulators played wait-and-watch game on infrastructure expansion, operators faced pressure on multiple fronts to expand network and ensure QoS. This elusive debacle could have been addressed through a clear directive and incentivization of telecom investments. What’s more, most of the companies are facing competition from Wi-Fi providers, OTT players, cable companies—all of which force telcos to rethink strategies so that they could perhaps increase broadband ARPU.

It goes without saying that the telecom industry has been a major contributory factor in India’s economic growth. However, to achieve GDP growth level of at least 10%, the industry needs to restructure its present state of ICT services, along with revitalizing the existing broadband services. Needless to say, WEFE in its own simple yet determined way is proceeding to the right destination