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Growth in broadband subscribers is not encouraging. But the segment is likely to experience an impetus with the National Optic Fiber Authority(NOFA) all set to lay optic fiber across the country, which would be further leased out to telcos for providing broadband services.
BSNL has decided to shift about 2 lakh of its 3 lakh employees to the newly created NOFA. The PSU would be spending around Rs 40,000 crore for laying of around 12 lakh km of optic fiber. The time line for the same has not been specified.
The telecommunications industry welcomes the move since the biggest impediment in increasing broadband penetration in the country is that the incumbent operator is not ready to lease out the infrastructure. At just 0.5%, India has one of the lowest broadband penetration in the world. This dismal show can be attributed to the limitations of wireline Internet like last mile connectivity, right of way issues, poor quality of copper, time take to deploy the network and reach customer premises.
The industry alleges that the incumbent has not played a positive role in the penetration of broadband in the country and this is a step in the right direction.
“It will help in the proliferation of the broadband. BSNL has the best infrastructure in the country but they are using it only for themselves. They view the private operators as competitors and are scared that they would be able to offer more services than them. If they are planning to have infrastructure across the country for leasing out to other operators it is a positive thing,” says Rajesh Chharia, president of Internet Service Providers Association of India.
British Telecom in United Kingdom, which has one of the largest
infrastructures, regularly leases out to other players. BT follows the concept of `functional separation', which basically means that separate business units with separate accounting are created for the firm's retail offerings and wholesale offerings. This idea could find
application in situations where infrastructure competition is not likely to develop soon and, thus, the best hope for competition in the near term is service competition.
Chharia also emphasizes the importance of incumbent sharing its
infrastructure. In this context the move of NOFA to have optical fiber across the country and to lease out to other telcos assumes importance.
This is also likely to give impetus to rural broadband. As of now, the connectivity of core network upto village level is very limited. The major problem is that core network bandwidth is only available upto the district headquarters or cities while ultimate usage is expected in block headquarter or villages.
Reliance Communications and Bharti Airtel and other players in broadband have optical fiber presence up to blocks but sharing of such optical fiber is not prevalent. The real challenge is to extend core network connectivity to village door steps. The cost of extending such connectivity requires huge resources and currently does not fit in the prevailing economic model.
A yet-to-be-released TRAI consultation paper says, “this (not having bandwidth connectivity till the last mile) is a serious bottleneck for proliferation of broadband in the rural areas. There is an urgent need to create a countrywide core network which should be extended upto the village level.”
BSNL has the largest optical fibre network in the country comprising 6,00,000 route kilometres covering all state capitals and district headquarters. In terms of size, BSNL's optical fiber clearly outstrips Bharti Airtel's and Reliance Communications combined network.
Amongst the private operators, Reliance has the largest optical fiber network of 1,90,000 kms followed by Bharti Airtel's optical fiber cable network of 1,00,000 kms. Bharti Airtel's network covers all the major cities in the country.
The operators are not able to launch the services for rural segment as there is no infrastructure. This move will help them to launch the services for masses and should go a long way in bridging the digital divide. However, the Government needs to solve the last mile issues. If this network comes up and BSNL shares with the operators, it will be cost effective for the operators to rollout services in the rural segment.
“The move will ensure that the rates comes down and ultimately it will be good for the customer. It would also make more bandwidth available to the operator and the customer,” says Sistema Shyam Teleservices spokesperson. Since more bandwidth will be available the rates will fall, which consequently will help in the reach of broadband and subsequently in bridging the digital divide.
Technologically speaking, there might be some issues where optical fiber is concerned. A section of the industry feels that the optic fiber technology is obsolete and the PSU can do well to experiment with other technologies available in the market today.
“One has to be technologically neutral. Optic Fiber is a decade old technology and the organization can do well to experiment with piloting and hybridisation of the new available technologies. In fact, I am sure they would be doing it already,” believes Naresh Ajwani,President of Cyber Cafe Association of India.
However, the yet-to-be-released TRAI consultation paper says that the optical fiber seems to have some advantages over the other technologies available in the market. Optical fiber is the most economical technology which can support highest bandwidth requirement and can easily be upgraded, if demand increases. While in core network optical fiber seems to be the only solution, mix of technological in access network will do well to boost broadband network.
While the service providers are laying optical fiber network but mostly in the urban cities, the critical issue associated with laying of the network is Right of Way. NOFA would have to work with the operators to come up with the right RoW policy. A favorable policy framework for laying the optical fibre is the need of the hour to remove the hindrance and restrictions for timely rollout of such network.
Though NOFA is a step in the right direction, it remains to be seen whether the actions are in sync with the intent. Besides, the time line is also critical where the coming up of the optic fiber is concerned. Broadband is the need of the hour and it is critical that the Government policies encourage operators to rollout services at the earliest.
Gagandeep Kaur
_gagandeepk@cybermedia.co.in