India’s Broadband Tragedy

The government had forecasted 3 million Broadband lines to be deployed by December ’05. To date only only 0.61 million have been deployed. Private operators, likes of Bharti, Sify etc. have deployed 0.35 million and the two PSUs, BSNL and MTNL that control 40+ million lines of copper have deployed only 0.26 million vs a target of 1.5 million. Two main issues come to mind, the incumbents are too busy rolling out their wireless networks just bridging the supply demand gap. The other lack of aviable wireless broadband technology and the delayed commits of Wimax. To both these issues unbundling of fixed lines will be key. India’s urgent need, virtual Broadband operators, that can lease bulk Copper lines from BSNL and MTNL and provide broadband services. DSL continues to be the most compelling and viable technology for India. I have DataOne broadband service from BSNL, it works, is always on, have WLAN signal around my house and for most part a good experience. However the marketing, demand creation and provisioning can only be expedited, by unbundling the last mile to new operators focussed on deploying broadband. India’s broadband tragedy continues to be a blend of a control freaked bureaucracy and Public Sector Units exercising control to impede competition.

Lets look at what China did. ( via Nitin Brahmankar) “China’s early decision to deregulate the ICT (information and communication technology) sector and break up the state telecommunications monopoly into four competing firms has now turned the country into the world’s largest telecom market.”

“China’s rapidly growing middle class, generated by an annual economic expansion of over 9 percent, has been snapping up consumer electronics, mobile phones and other sophisticated telecom gadgets, including third-generation (3G) wireless phone devices.”

“The latest annual reports of China’s National Bureau of Statistics showed that fixed-line phone penetration in China last year reached 25 percent (of total population) and mobile penetration 27 percent (GSM and Code Division Multiple Access). The number of Internet users exceeded 100 million and broadband subscribers 45 million.”

“Telecom operators in China are entirely domestic and comprise two big fixed-line operators with nationwide licenses (China Telecom and China Netcom), two small players (China Satcom and China Railcom) and two mobile carriers (China Unicom and China Mobile). China Mobile operated a GSM network with 222 million subscribers as of last year and China Unicom also offers both GSM and CDMA with 84 million and 28 million subscribers, respectively, as of last year.”

“Domestic makers have now gained about 50 percent of the mobile handset market, which was previously dominated completely by foreign vendors.”

“Huawei, China’s largest telecom equipment manufacturer, held almost 45 percent of the ADSL market, while state-owned ZTE and Harbour Networks, two other domestic makers, held 16 percent and 9 percent, respectively. Moreover, Huawei and ZTE have developed mature 3G products and are set to win a significant portion of operators’ capital investment in 3G networks.”

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