Broadband has long been like the proverbial Godot for Indian Internet users—it is supposed to be there but it never comes. As users—both business and residential—began yearning for it, they were often promised of it, but a fat pipe always remained, and still remains, elusive. Paradoxically, this is the state of affairs in a country where almost all the broadband technologies—be it DSL, cable modem, ISDN or Ethernet—have been deployed commercially. While some of the broadband services failed because of flawed business models (like high subscription charges and high CPE cost), services like DSL did not take off because of regulatory hurdles, while others like cable modem failed because the technology wasn’t suitable. And in all these, non-existence of a critical mass of users has certainly been a major issue.

Interestingly, despite not so friendly regulatory regime, mostly private players are currently offering whatever broadband service exists in India. However, none of them have made any significant impact. Significantly, incumbents BSNL and MTNL never really thought of deploying broadband services. This lack of interest of incumbents has surely contributed to this long Indian wait for broadband. It was only recently that BSNL took an initiative. However, it is still unclear what strategy it is looking at.

Is DSL the Way to Broadband?
A number of broadband technologies have long been there. However, none has been as successful as DSL. In broadband markets across the world, DSL has been fast emerging as the residential broadband technology of choice. In fact, DSL has been regularly eating into the cable modem broadband market in countries like US. However, in India DSL has remained a non-starter, largely because incumbents who own millions of the copper loops have never really taken it seriously. In the context of the global success of DSL, BSNL or for that matter MTNL or any of the new private fixed service providers could do well by considering DSL for taking broadband to homes. That apart, the very nature of the DSL technology and the falling cost of DSL equipment makes it the best option for broadband-hungry but price-sensitive Indian users.

Worldwide 3Q02 DSL Port Shipments

Falling Equipment Costs
Today, it would not cost more than $100–150 including the cost of CPE for taking DSL to a residential subscriber. The same used to cost around $250–300 only a year ago. This clearly shows a downward trend in the DSL equipment prices. In fact, an important factor in the growth of DSL in the Asia-Pacific region has been the fierce competition among the DSL equipment manufacturers based in China and Taiwan. That has pushed the per-port price of DSLAM from some of the vendors to $82. Leading global vendors like Alcatel, Siemens, Lucent and Cisco have been under increasing pressure from equipment vendors in China, Korea, Japan and Taiwan. "After including duties of around 30 percent, DSL equipment should cost in the range of $125 per line in India," Ruchir Godura of UTStarcom observes.

Ruchir Godura, director (South Asia), UTStarcom

Prices of ADSL modems too have been falling steadily, so much so that they are becoming commoditized products. This is forcing manufacturers to make money on volumes rather than on value-adds. ADSL modems are now available in Taiwan for $50–60 and are expected to become cheaper in the coming year as ADSL becomes even more widespread in the region and competition among vendors becomes fiercer. In fact, in many ways most of the US and European vendors of DSL equipment have been pushed out of the Asia-Pacific market because they have not been able to match the prices offered by the regional manufacturers. The input cost of manufacturing has been so competitive in the region that China has emerged as one of the most important manufacturing base for Alcatel, the largest DSL equipment vendor globally. "Our company Sanghai Bell has been able to manufacture DSL equipment at Asian prices," points out Alcatel’s Bernard Grave.

Some of the vendors are offering ADSL modems with built-in routers that have VPN and voice capabilities. DSL CPE manufacturers are also integrating wireless technologies like 801.11 to accommodate in-premises data distribution and Internet sharing on existing media types such as wireless, phone line, and power line. The next evolution in home networking will address the serious problem of in-premises multimedia distribution using existing media types, and will require a solution that delivers guaranteed QoS. All this has transformed DSL modems into integrated access devices (IAD). However, these additional functionalities are not required for an average user, at least here in India at this juncture.

The Technology
The falling cost of equipment apart, the very nature of the DSL technology has also been the key to the growing popularity of DSL among service providers across the world. Even though DSL utilizes standard telephone lines, users can move data along those lines at higher speeds. And this is reason why it is particularly suitable for incumbent fixed line telcos like BSNL and MTNL who own millions of last mile copper loops. The service works best for users who live within three-and-a-half miles from the telephone company’s central office or where the DSL equipment is located — the more the subscriber is closer to the central office the better speed he gets. And even if the subscriber were farther then the prescribed distance from the central office, he would get a far better speed than a dial up or a cable modem. This is because DSL is rate adaptive, that is, it adapts the communication speed to the user’s modem and distance from the service provider’s point-of-presence. In fact, Rate Adaptive DSL is being touted as the best bet for residential broadband as it provides maximum bidirectional bandwidth from a DSL circuit.

One of the most notable features of DSL service is that subscribers get a single secure line that directly connects to the service provider and users get dedicated bandwidth as the line is not shared with any other user. All DSL technologies exploit the available spectrum in copper telephone lines, employing advanced modulation techniques to carry high-speed data transmissions. The basic differences among the DSL technologies lie in their communication speed, operating distance, and suitable applications. Apart from using the existing copper lines, all DSL technologies offer certain other benefits like partitioning voice and data traffic. And since the services can be rolled out on the existing infrastructure and requires only minimal changes in the access facilities, service rollouts are not risky bets for service providers. Moreover, service providers can easily adapt their existing customer support, billing, and installation activities to support DSL services.

Bernard Grave, marketing director, Alcatel

All DSL technologies require a similar configuration of user and service provider equipment. At the user end, DSL access requires a copper phone line that is connected to a DSL modem (or router). At the service provider’s central office or PoP, DSL access multiplexer (DSLAM) connects multiple users and passes the transmissions to their respective voice and data networks. DSLAM also separates incoming voice and data signals and directs them onto appropriate carrier networks.

Of the various DSL technologies a la IDSL, SDSL, HDSL, ADSL and VDSL, ADSL has emerged as the technology that is driving residential broadband. The nature of ADSL technology makes it fit for Web browsing and other Internet applications in which users download far more information than they upload. It transmits a much higher downstream rate than upstream.

This asymmetric nature of ADSL also means that it is not optimized to support business applications that require roughly equal amount of bandwidth upstream and downstream. ADSL supports a variety of transmission speeds, determined by line quality, wire gauge, and the distance between the customer premises and the central office.

On other hand VDSL, which supports both the symmetric and asymmetric data transfer, can be used for high bandwidth enterprise applications. In fact, ADSL itself in combination with the integrated access devices can be an attractive broadband option for business users.

IP verses ATM Battle
Interestingly enough, the IP verses ATM battle seems to have entered the DSL arena also. While the world’s largest DSL equipment vendor Alcatel is still not ready to believe in IP, UTStarcom, the largest vendor of IP DSLAMs, is sure that it is the future. "We don’t believe in IP DSLAM because quality of service is not guaranteed on IPDSLAM, as IP networks are still not reliable. Today, DSLAM means ATM because we would still need ATM from the CPE to the DSLAM, as IP would not work there," Alcatel’s Bernard Grave says, explaining why IP isn’t suitable.

Grave, however, doesn’t discount IP completely and Alcatel has a DSLAM that supports IP. "We have a universal DSLAM (A 7300) that supports all DSL types be it ADSL or VDSL and every technology from fibre to IP and has built-in broadband RAS function that can provide remote connectivity from a central DSLAM. This is because we believe a service provider will have to consider these many options if it has to offer DSL service," he says.

Ruchir Godura of UTStarcom contends otherwise and believes IP is the future. "Before IP DSLAMs came in, ADSL was only good for plain Internet access and not high-speed applications like video streaming and TV over IP," he says. His company, which leads the market for IP DSLAMs, has been shipping heavy volumes of its AN- 2000 IP DSLAM platforms (it won a $130 million contract with Yahoo Japan in 2001). IP- based DSLAMs (as opposed to ATM based DSLAMs) have gained significant momentum in the DSL market, especially in Asia Pacific. The spread of networks with Ethernet and IP technologies (that would allow for the delivery of new IP services such as VPNs, VoIP, and VoD) has been the main reason for this growth in deployment of IP-based DSLAMs (in place of ATM-based DSLAMs). "IP/gigabit switching technology is the mechanism being adopted by the big operators in Japan, Korea, Taiwan and China due to enormous cost-performance advantages it has over ATM. In Japan, our IP-DSLAM is being used to deliver 4 Mbps of unconcentrated bandwidth to residential subscribers, enabling them to receive two channels of broadcast-quality video over their ADSL lines," Godura claims. UTStarcom recently signed contracts with China Telecom to deploy approximately 80,000 lines of its IP-based ADSL broadband solution.

IP or ATM, the fact is that DSL has been one of the bright spots in an otherwise dull telecom business across the world. And it is very much likely to remain the broadband technology of choice across the world at least in the medium term. This is largely because among all broadband technologies DSL is the one that requires the least amount of investment in existing infrastructure and can be easily deployed.

What all this could mean to Indian SPs?
Even though no concrete initiative has been taken yet by any service provider (including the incumbents) in India to offer DSL services to their fixed line customers, a market surely exists. To begin with, fixed line operators can look forward to upgrading their dial-up Internet subscribers to DSL. This would, of course, happen only if subscribers get a DSL service at a cost that is cheaper than what they pay while using a dial up.

While today there are DSL equipment available that can bring any kind of voice, data or video service to home or business users, they would not be needed in India at this point of time. This is because the prime concern of most Indian users is basic connectivity—something that is cheap, fast and reliable. Moreover, most Indians are not still ready to pay for content intensive services like video-on-demand or TV-on-demand. May be, that would be the next step. Also, from a service provider’s perspective, DSL could emerge as an important competitive advantage especially for the incumbents as they can provision voice and video services as well. Also, with competition from the wireless services (imagine a scenario wherein fixed line subscribers begin shifting to wireless alternatives like CDMA even for Internet access because that’s better than the 64 kpbs dial up), the fixed line providers would be under more pressure to do value-adds to the plain telephone connections. Even though fixed operators like BSNL and MTNL may be inhibited by low and widely dispersed PC penetration to bet too much on DSL services, they could at least make a beginning. After all, if broadband cannot be taken to Indian users with a technology like DSL (which requires far less investment in the existing infrastructure both at the service provider and user end than any other alternative) then it cannot reach them with any other alternative either.

Ravi Shekhar Pandey