Telecom Lead India: While India has seen a telecom
revolution in the last decade, the growth has mostly been in the area of mobile
voice services. In contrast, the internet connectivity in India is still
very low, and far behind developed countries. India had about 12 million
fixed broadband and about 9 million mobile broadband connections (excluding 3G)
at the end of 2011. That gives a total penetration of less than 2 percent.
Compared to that, US had 82 million fixed and 155 million mobile broadband
subscribers putting the overall broadband penetration at 75 percent.
Mobile technology plays a key role in determining the
penetration and growth of telecom services today. It’s much easier
for service providers to erect a tower and provide coverage over a geographical
area (provided they have spectrum) than to lay copper or optic fiber cables to
each and every home. Wireless is also the preferred choice for
subscribers since it offers mobility.
Broadband Wireless Access (BWA) offers the same promise
for broadband internet services that cellular technology did for voice
services. The spectrum for BWA has already been auctioned by the
Government in 2010 and now India is waiting for the licensees to roll out these
BWA is especially useful for rural areas where large
sparsely populated areas can be covered by just one mobile tower.
Rural areas are sparsely populated which makes the cost of wired
broadband prohibitive. BWA offers a cost effective alternative and makes
internet services affordable to rural population.
BWA is also relevant to the mobile urban population, from
students to sales & field personnel to high flying executives, who need to
always be connected. The current mobile internet services
based on 3G and EVDO are expensive and hence their uptake remains low.
BWA promises to bring affordable data plans to the masses.
BWA is also an enabler for many new services and ways of
working. Connected Ambulances, Police patrol vehicles, remote video
surveillance, fleet management systems, smart grids are few of the areas that
can benefit from a reliable BWA service at its backend.
However, despite the enormous potential and pent up
demand for BWA services, the operators face many challenges and have been slow
in rolling out these services.
The first challenge is on technology. There are
many technology options for BWA (Wimax, TD-LTE & FD-LTE). The Indian
operators are showing a preference for TD-LTE. LTE is a 4G technology and
offers the best packing of data per unit spectrum (bits per hertz).
However, the LTE ecosystem in general and TD-LTE in particular is not yet
mature enough with chipset vendors, network infrastructure, user
devices still iterating and doing trials on their products to refine them
further. These devices and equipment also tend to be more expensive at
present since volume gains in LTE device & equipment manufacturing hasn’t
yet kicked in. This is speculated to be one reason for operators going
slow on their launch of BWA services, with Airtel being the only one having
launched LTE in Kolkata. However the LTE ecosystem is fast evolving and
it’s expected that very soon operators and customers will have a huge choice of
infrastructure equipment and handsets/devices to choose from.
The second challenge is in the form of return on
investment. BWA operators have collectively already invested Rs
38000+ crores in the spectrum and need to invest more in the network
infrastructure. With India being an extremely competitive market and
Indian consumer being very cost conscious, operators are worried about how much
revenue they will be able to generate from these broadband
services. Unlike the west, India’s telecom services market is of a
low cost, high volume nature, and operators will have to come up with
innovative service and pricing strategies in order to drive high
penetration. They’ve already been successful in doing so in the mobile
voice space, and hence there’s reason to believe that they’ll be successful in
managing the pricing for BWA as well.
The third challenge is that computer literacy and
household PC penetration rates are also low in India. This needs to be
overcome first before we are able to increase broadband penetration. The
good news is that a lot of things are happening in the market and PC/laptop is
no longer the only device used to access internet. Smartphones and
tablets have taken up a huge share. Low cost smartphones and
tablets are needed in order to make them affordable for a large percentage of
Indian population. Several offerings from mobile vendors and devices like
Akash are addressing this need. Another need is to develop content
and interfaces for these devices in local languages, so that access is not
limited to the English speaking segments alone.
Despite these challenges, BWA rollouts are progressing in
the right direction, and everybody from service providers to subscribers to
industry watchers are excited about it. It is indeed very important for
India. Connectivity and access to information improves the economic
productivity of individuals and organizations and helps them coordinate better
for producing and selling their goods and services. Reduction in travel
due to access to real-time information and applications like video conferencing
can help lower India’s oil import bill. According to World Bank, every
increase of 10% in broadband penetration for developing countries has an effect
of increasing the GDP growth rate by 1.2 percent. So if India has to enter into
the league of developed nations, then making BWA a success is extremely
Himanshu Agarwal, manager – Product Marketing, Tejas