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Communications is back in the ground. The cable
from the neighbourhood cable operator that so far "brought"
video programming to home now "carries" much more. High-speed
data, Internet, and multimedia traffic both ways.
Why In India?
Cable enjoys various advantages in India vis-a-vis other options for
Internet access.
To start with, the
amount of cable laid out in the country is fabulous. Cable reaches in
towns and villages too. That gives it a big advantage over dial-up lines.
Two, where there
is access to a telephone line, the quality of telephone line is unsuitable
for Internet service. Also, cable is more reliable than telephone line,
in India.
Three, there''s a
lack of availability of high-speed leased lines. Today, leased lines
are available in a handful of cities. Cable operators, with a minimum
of 64 kbps connectivity and the capability of the technology to allow
flexible bandwidth allocation, can virtually provide whatever bandwidth
required by the business users.
The roadblock is
initial cost to the user. The cable modem costs anywhere between Rs
16,000 to Rs 20,000.
Going by the prevailing
rate of dial-up Internet services and assuming that the cable operators
will have to provide at that rate, it takes almost two years to recover
the cost of cable modem alone!
That leaves only
one precondition for cable to take off. A drop in the price of cable
modems. Again, there are three ways out. One, a reduction in duties.
The second is the aggressive price cutting by the vendors to popularise
the technology. And third is local manufacturing. The third is a chicken
and egg story. Clearly, today''s volumes do not justify manufacturing.
The only viable option left is for vendors to drop prices.
The Market in
The Making
A
recent survey by MDRA found that only about 10 percent of the cable
operators are aware about the data opportunity and are willing to make
any upgrades.
Though 10 percent
is a small figure, it may not act as a barrier. The investment for optical
fibre backbone and the Cable Modem Termination System (CMTS) is likely
to be done by the Main Service Operators (MSOs) like Siticable and IN.
Most small neighbourhood operators can take a data feed from them.
The operators venturing
into the Internet services can broadly be classified into three categories:
A Class I cable
Internet access provider either owns a good backbone or is planning
to build one. It has long-term plans to be in the data/Internet business
and, typically, has a sound financial background.
A typical Class
II cable Internet access provider is a big cable TV operator who wants
to put in some additional investment (to the tune of Rs 5 lakh) and
is expecting more than 2,000 subscribers in a year.
Class III cable
Internet access providers are the small neighbourhood operators who
take a data feed from a Class I or Class II operator and distribute
it to homes/small offices.
Factor that will see Internet over cable getting popular are the widespread
penetration of cable and lack of any alternative high-speed access network.
The latter is a good reason for even corporates and small and medium
enterprises taking to cable for Internet access.
VSNL, MTNL, Satyam,
ETH...all of them are spending time and energy on working with cable
operators.
Cable, as one of
the media for Internet access in India, is here to stay. And grow. What
we should watch out for is how.