INTERNET SERVICES: TRAI-ng Hard for Broadband

TRAI recently took the first step towards broadbanding India when they
presented their recommendations on the subject to the government. The regulator
has suggested 12 ways to achieve greater broadband penetration in India.
Currently, the broadband penetration in India is only around 0.02 percent.

The minister for communications and IT, Dayanidhi Maran told VOICE&DATA
that the TRAI recommendations on broadband and Internet are high-priority areas.
"The ministry is deliberating on the recommendations and we will be soon
coming out with a decision on them," Maran said.

Not So Healthy

While the growth rate in the telecom sector is second only to China,
officials are concerned over the exceptionally low Internet subscriber base and
usage rates. The picture gets further blurred when compared with South Korea
where there are almost 79 computers and 25 broadband connections for every 100
persons. In India, there are only around 10 million PCs for over a billion
people and a dismally low Internet density of 0.4. Add to that the fact that
only one person in 100 uses the Net.

Lessons to be Learnt

TRAI recommends that tariffs be cut massively to make broadband attractive to
the masses. At present a 100 kbps line costs around $16 in India, compared to
Korea where it is less than a dollar. Even in China it is $3. If the
recommendations are accepted, this will be cut down to less than $8. Moreover,
TRAI has tried to make a case for broadband and Internet by linking their
expansion to the country's GDP growth. The regulators have also suggested
unbundling of the local loops held by basic operators, mainly BSNL and MTNL. The
PSUs have strongly opposed this saying that private service providers cannot
share the investments hitherto made, for free. As it does not make sense to lay
parallel infrastructure for Net services, TRAI feels that the PSUs should be
given five years to extract returns on their investments. This can be through
shared unbundling, where others install the DSL and incumbents share revenue, or
extract rental. The second option is through bit-stream access where BSNL/MTNL
install DSLs and then lease out the connectivity.

TRAI also recommends that multiple access technologies should co-exist
without artificial hurdles and effective competition should ensure choice of
multiple service providers. TRAI has also suggested 100 percent depreciation on
computers, easier norms for donation and recycling of computers, and removal of
anti-dumping duties.

Content and Pricing as Growth Enablers

While it is generally perceived that multimedia applications can be popular
in the urban areas, rural areas would probably first get hooked on to the
educational and e-governance applications. For example, a farmer in Punjab may
be more interested in the market price of farm products than Nasdaq stock
quotes. The big push, as even TRAI agrees, has to come from government
initiatives like putting information online, e-governance, wiring of schools,
projects like Bhoomi, e-Seva, and Gyandoot.

Ultimately, as in the mobile industry, costs will determine the number of
subscribers, but innovative and apt content will bring in the moolah.

By our Sr Reporter