Cable Internet:The Toothless Tiger

Guess what the million-dollar

question the Internet industry is asking these days! What happened to the Internet over cable dream? Just half a year back, every other ISP was testing Internet over cable technology. Like Satyam Infoway with a Delhi-based cable operator, Dishnet with Silicon Mountain, a Pune-based cable operator. Even a C-category ISP like Ortel Communication of Orissa had tested out all the available cable modems and head-end infrastructure equipment. And there were at least two known commercial operations too.

Siticable was known to have started commercially providing the service to its customers in Bangalore, while ER&DCI was doing the same at Noida. Hardly it has been months after these testing and initial commercial services have ensued.

The feeling one gets is that Internet over cable in India is not that great an idea as one initially thought. There were very few takers and after a short period of initial use, many of the customers stopped their connections, returning the cable modems that the operators had given them on rent. So, what went wrong?

The Demand



It definitely is not that there is no demand. There is a great advantage that cable TV has over PSTN as the delivery medium of Internet. According to National Redearship Survey (NRS) 1999, there are 70 million households owning a television, and 30 million of them connected to cable television. Compared to this, the entire population of PCs in India is just 3.13 million, as per IDC estimates. And as per DoT, there are a little above 20 million telephones in the country. The present mode of Internet delivery is clearly weighed down on the side of dialing up to an ISP through a computer and a dial-up modem connected to a telephone line. However, if the Internet usage has to go out to the mass, then the number of PCs and telephones have to increase tremendously, a case which is not seen if the PC remains at the present price levels–which varies from Rs 20,000-50,000. In this scenario, the picture of connecting to the Internet through televisions and cable TV starts looking brighter. There is not only a healthy population of television owners and cable TV viewers, but the cost of acquiring a TV is much lower at Rs 10,000-15,000. Another reason for demand could be the better Internet connectivity that cable promises in comparison to the congested telephone lines. 

An IMRB survey shows that out of the 5,847,244 Socio Economic Class A/B households in the top 16 cities of India, a third have already heard about the concept of Internet over cable. The survey suggested that about half of the households planning to buy Internet access would prefer Internet over cable than Internet through phone.

It had further forecasted that out of the 5,53,000 homes that would connect to the Internet by this fiscal-end, an incredible 2,47,000 households would choose Internet through cable TV over Internet through conventional methods. Though this forecast doesn’t seem to be coming true, the bottomline is that there is a huge demand for Internet through cable out there among the richer mass.Roadblocks



One of the major roadblocks to Internet over cable is the technology itself. Though cable access equipment is now supposed to be standardized on the DOCSIS standard, there are hardly more than a handful of vendors who have standardized their equipment on the DOCSIS. Many still use their own proprietary technologies, which lead to problems like a modem of a particular brand not talking to another modem of a different brand. 

There are other problems, one of them being logistics. The cable industry, big that it is, is made up of a large number of friendly neighbourhood players. There are not many large cable operators with a consolidated network. According to IMRB, there are over 12,000 primary and secondary operators in the top 23 cities of India alone. The average subscriber base of each operator is roughly about 500 households. Networking experts suggest that this problem can be solved by having a multi-tiered service provision, wherein the bigger cable operator becomes the primary ISP while the smaller neighbourhood operators become franchisees connecting to the mother network. So, not all will have to invest on costly head-end equipment or for that matter backbone Internet connectivity over leased lines, etc.

But, the biggest roadblock is the price of a cable modem/set-top box. Though we have not seen the entry of set-top boxes, cable modems that are available in the market cost more than Rs 15,000, a huge sum for normal households. Until the cost of cable modems drop and affordable set-top-boxes that can enable televisions to receive Internet, the mass will not go in for this service. 

But is there a corporate market for receiving Internet on PCs through cable TV network using a cable modem? This also does not seem to be evident. With the Internet backbone so congested,

and most operators going in for just 2 Mbps backbone connectivity, there wasn’t much chance of getting a “great connection” in spite of the 10 Mbps-capable co-ax cables of the cable TV operators. Why will corporates pay thousands of rupees more for renting the cable modem, when the speeds aren’t as good as promised?

The silver lining in the back cloud is that big players like Hathway, RPG Netcom, Satyam Infoway, Asianet, and Sun TV are expected to join the game that is in the likelihood. We can only hope that the entry of such larger entities will push the cost of cable modems and set top boxes down, enabling even a middle class household to experience the magic of the Internet.