Broadband Infrastructure : High Spirits

In the current bleak environment, telecommunication services is the only
sector which has defied any impact of the economic slowdown. India's total
broadband subscriber base reached 6.2 mn by March 2009, as compared to 2.6 mn
during the previous fiscal. Though the growth is not as good as it was
projected, it is definitely heading towards a proficient direction.

According to VOICE&DATA estimates, the overall broadband equipment market has
grown from Rs 1,510 crore in FY 2007-08 to Rs 2,221 crore in FY 2008-09,
registering a solid growth of 47.1%. The continued growth year-after-year is
mainly attributed to the growing need of connectivity and the emergence of new
breed of high bandwidth intensive services replacing traditional applications.

Registering a 38% growth, UTStarcom retained the top slot with a total
revenue of Rs 655 crore in FY 2008-09, Ericsson, which was ranked seventh during
FY 2007-08, took a long jump by registering an astounding growth rate of
313.3%-thereby securing a second spot in FY 2008-09 rankings.

Huawei came close at Rs 300 crore, reflecting a steady growth of over 50%
compared to previous fiscal.

Other major players who are strengthening their presence in the broadband
equipment marketplace are ZTE, Cisco, NSN, Alcatel-Lucent, Nortel, and Motorola.

Movers and Shakers

BSNL has played a pivotal role in increasing the broadband adoption in the
country by providing high speed broadband networks all over India. In the second
phase of BSNL's country-wide multi-play network, UTStarcom is already deploying
its industry-leading iAN-8000 Multi Service Access Node (MSAN) solution in as
many as 962 cities throughout India to enable the addition of 1.1 mn new
broadband subscriber lines. This is in addition to the 1.3 mn broadband
subscriber lines deployed by UTStarcom during the first phase of this project.

Huawei now serves thirty-six of the world's top fifty operators, along with
over 1 bn users worldwide. It is also working with Aircel to provide end-to-end
solutions in setting up base in the states of Andhra Pradesh and Kerala.

Alcatel-Lucent has recently entered into a joint venture with Bharti Airtel
to manage Bharti Airtel's pan-India broadband and telephone services. Under this
agreement, Alcatel-Lucent will plan, design, deploy, optimize, and manage Bharti
Airtel's broadband and telephone network across India. This 'managed services
partnership' is expected to drive optimal capital investment, and increase
operational efficiency by moving voice and data traffic onto a single
infrastructure.

It has also introduced a new product, termed 'copper line access switch' that
boasts of helping service providers to make better use of their installed copper
access networks in order to offer high-speed broadband services to business
customers.

Notably, Bharti Airtel has recently launched its 16 Mbps broadband service in
India (based on ADSL2+ technology and delivered through a fiber backbone carrier
Ethernet network) and Reliance Communications has launched its CDMA-based mobile
broadband service in Kolkata.

The demand for broadband services is rapidly growing in the Indian market and
experts predict that the adoption of FTTH technology will be dramatic in the
coming years.

In an illustrious development, Ericsson has demonstrated VDSL2-based
technology, achieving data transfer rates of more than 0.5 Gbps. This is claimed
to be the first such demonstration and is expected to furnish operators to offer
low-cost, high-performance connectivity for an increased range of mobile
backhaul customers, enterprise and residential users .

The company is presently working in over 170 countries and is also listed on
OMX Nordic Exchange Stockholm and NASDAQ.

In addition, it has also ventured in an agreement with one of India's leading
in-building management solution companies to provide high speed connectivity to
millions of homes in India. Its Gigabit Passive Optical Network (GPON) solution
has been used as an open access solution, enabling residents to select services
from an Internet service provider of their choice.

Cisco, another prominent player has introduced product lines and services for
both the enterprise SMEs segment as well as residential subscribers. This
includes its end-to-end IPTV solutions, feature rich BRAS, Broadband Network
Gateway (BNG) systems for hardened, and Quality of Service (QoS) rich Ethernet
and MPLS switching platforms for carrier ethernet networks. The company has
product portfolios for broadband for all technologies like Global System for
Mobile Communications (GSM), wireline and WiMax.

The new technologies enabling higher bandwidth include VDSL and GEPON. VDSL
will provide higher bandwidth over the same copper infrastructure to go beyond 8
Mbps, possibly up to 20Mbps. Alternatively, where copper doesn't already exist,
GEPON can provide up to 100 Mbps using fibre as a medium. Service providers are
looking forward to these two promising technologies to break the 8 Mbps barrier
faced with ADSL 2+. (repeat?)

So, while wireless technologies like 3G/4G, WiMax and Wi-Fi would still have
their place because of the mobility factor, wireline is growing because of high
demand for video communications and convergence of services. Wireless and
wireline technologies will co-exist because of their strengths in mobility and
bandwidth respectively.

The decline in the ARPUs and falling margins are forcing service providers to
adopt a centered approach on adding rich and innovating services like IPTV,
high-speed DSL, Ethernet connections and managed services to stay ahead of the
curve.

Considering the vast potential in the Indian marketplace, companies are
constantly innovating and bringing new set of solutions and services. The year
2009-10 can witness huge demand of application such as voice (IP/NGN), VoD, IPTV,
and distance education. Also, this fiscal would see an increased adoption of
value added services with broadband. And for enterprises, the focus would
revolve around adding more managed services.

Jatinder Singh

jatinders@cybermedia.co.in