Making Broadband More Meaningful

University of Chicago Graduate School of Business economists Matthew Gentzkow and Jesse Shapiro in a paper published in the Quarterly Journal of Economics presented a series of analyses which showed that the advent of television might actually have had a positive effect on children's cognitive ability. Based on another research by Emily Oster, assistant professor of the University of Chicago and Robert Jensen, “The Power of TV: Cable Television and Women's Status in India” they found women exposed to TV have shown significant changes in gender attitude. These women are less likely to report that it is acceptable for a husband to beat up his wife and would be less likely to express a preference for a son. Also they have observed behavior traditionally associated with women's status also changes. Women report increased autonomy-ability to go out on their own and participate in household decision making-and that they had lower fertility; these are positive impacts of TV in villages.

Now imagine if plain vanilla TV can be so much of an impact-think about what interactive tele-viewing could do for the women and children in Rural India. TV then will not be an entertainment device during the evening hours but will also be used for edutainment and infotainment during the daytime. No training needed, remote is a good user interface and the benefits could be lot more.

Video communication will be the driver for broadband. The benefits of broadband penetration to an economy have been well documented. Increased broadband penetration can provide a powerful stimulant for productivity growth. Better educated children in broadband enabled schools, a more efficient government through e-governance initiatives and companies delivering new and innovative services in broadband enabled economy can help prop up sagging GDP growth rates in difficult global economic conditions. India can easily grow at 10% GDP by ensuring productivity increases driven by broadband penetration.

In the 18th century, French economist Jean Baptiste Say postulated the famous Say's Law highlighting that there can be no demand without adequate supply. The more the goods are produced, the more those goods can constitute a demand for other goods. The law certainly has proved itself in the widespread adoption of mobiles in India and if applied to broadband can certainly change the story of the broadband market in India. As broadband penetration increases and higher bandwidth networks become more prevalent, the opportunity to create whole new industries is possible. Unleashing new products and services will create a positive feedback loop which will drive further penetration and create even newer products and services.

India has one of the lowest numbers of broadband connections and at the same time has one of the largest numbers of mobile phones in the world. Recent numbers estimate that there are only just 10 mn broadband subscription connections, a penetration of only 0.01% while mobile penetration is at 60% with nearly 15 mn new phone connections being added every month. One critical aspect of the increase in mobile penetration has been the declining prices of cell phones and call rates. Most carriers do not charge more than 50 paise per minute for calls and handsets are easily available for `1,500 onwards. As the prices declined, the virtuous cycle of demand and supply kicked in due to which operators could develop sufficient scale to offer cheaper rates to an even greater number of customers. If service providers can afford to drop broadband prices to more meaningful levels, broadband penetration can be quickly brought up to more meaningful levels.

Optimization of Cost=Reduced Broadband Pricing

In order for the service provider to reduce price, they will need to cost optimize their offering which would include working with government authorities to reduce the cost of 'right of way' expenses, use of local content and hosting of content in country to reduce cost on international bandwidth and cross-subsidization via an advertising model.

Right of way remains a big cost that is a major deterrent for service providers who are promoting high speed Internet access. A close collaboration between the service providers and the government agencies could help alleviate this pain point of service providers.

Localization of content and hosting of content in country will go a long way in reducing the cost of offering broadband services. To reduce the digital divide and to make broadband appeal to the masses, the localization of content becomes a must. This way the typical Indian homes that are used to user interface of using the remote and their ability to see content relevant to them and in their local language will be welcome and will go a long way in reducing the digital divide.

Further cross-subsidization can be achieved by adopting an advertising supported model that connects sellers with buyers in more efficient ways. Without such a cross-subsidization, broadband penetration may continue to lag at levels deleterious to the entire economy and keep the nation's dreams of being a modern digitally advanced country a distant reality. An advertising model can not only create a vibrant ecosystem of Internet content providers, but create a virtuous cycle of even more demand which the service providers can offer at even cheaper prices.

Access Device for the Internet

In addition to the service providers providing broadband services at a reasonable price, another significant factor that may continue to inhibit broadband penetration inspite of cost-effective broadband services is the low penetration of PCs in India- currently at 3.6%. Removing this adoption barrier becomes even more important and can be achieved by using the TV as an access device to the Internet. This can easily be done via the IPTV technology. The good news is that there are 120 mn homes (catering to approx. 600 mn individuals) that already have access to TVs that can easily be used to further promote broadband, eliminating the need to invest in a PC.

Broadband-A Helping Hand to Government

Educating the masses would be a good start. The government has to act as a catalyst and also be the user to not only help build the network but also work with other government agencies that would be heavy users of this network. Government is already investing in lots of programs for the betterment of its citizens. By using mechanisms to best use such resources while reducing pilferage would be added incentive for the government to use the electronic means to deliver the program as well as monitor such programs for its impact to the citizens and the benefits the citizens receive because of the program.

Education could be a good start. Education could mean a lot of things-

• Education could be complementing the classroom for the K to 12 system
• Provide promotion of government programs
• Provide access to information that is the concern of information arbitrage and the reason for rampant corruption
• Provide vocational training and training to make better citizens-inculcating civic sense, respecting the laws of the land etc
• Provide information services to expecting mothers, to farmers
• Programs for better health and nutrition; the list can go on

Conclusion

Services such as Internet Protocol Television (IPTV) sometimes also referred to as Interactive Personalized TeleViewing can be utilized to offer video services via managed broadband connection. Video services could include entertainment eg, offering linear video as in broadcast TV services, infotainment services and edutainment services among others via non-linear video and interactive applications. Such services are made possible via two-way communication enabled by broadband IP networks. Currently available regular cable or DTH TV in India is only one-way communication-users cannot interact with the content observed on the TV. To enable IPTV, the TV will need to be connected to a set top box (STB) that in turn would be connected to a broadband pipe. With this setup the TV will then be available access to a wealth of information that the user could choose to interact with.

Given the interactivity available on IPTV, its use of TV as an access device and pervasive of TV in Indian homes, services such as IPTV will further help improve lives in rural India by offering its citizens entertainment, infotainment and edutainment services that are more relevant and meaningful for the masses. This is in direct correlation based on research that has shown that exposure to Cable TV has had positive affects on women and children in India. IPTV can also be a great driver for broadband in our country as this technology uses TV as an access device as a TV is already available in majority of Indian homes. Government can become a great catalyst in the promotion of technology as there are direct benefits to society-another engine to drive growth and improve transparency in governance. The

benefits to the end user are huge-it will help reduce the digital divide and

bring the masses in India to the mainstream.

Vijay Yadav

The author is managing director, UTStarcom India

vadmail@cybermedia.co.in