The broadband segment in India has failed to replicate the growth witnessed in the wireless voice segment due to issues such as high network roll-out costs, low fixed line network penetration and limited availability of affordable smartphones. To give an impetus to this segment and improve broadband penetration in the country, the government launched the ambitious Digital India programme, which aims to provide broadband connectivity to 250,000 gram panchayats. Industry experts share their views on the current broadband landscape in the country and the emerging scenario…

What are the key reasons for the low broadband penetration in India?

Rahul Agarwal

Broadband penetration in India has been abysmal. The deployment of fixed broadband networks is not only expensive but is also difficult owing to the country’s vast geographical expanse. The adoption of broadband services has been limited due to issues like poor quality of service and lack of access in rural areas. Besides, deployment in rural areas is not economically feasible.

Mobile broadband is expected to drive penetration in urban as well as rural areas because of its low capex, ease of installation, reduced time to market, availability of affordable mobility devices and the increasing need for seamless broadband connectivity on the go.

In order to increase broadband penetration in rural areas, stakeholders need to improve end-user experience by eliminating bottlenecks in network infrastructure and ensure the availability of localised vernacular content.

Kunal Bajaj

The availability and affordability of three things guide the adoption of broadband. These are  infrastructure, affordable devices, and content and services. For a long time, the lack of availability of content and services was considered the major roadblock in broadband penetration. However, now there are many companies that provide India-specific content. As far as devices are concerned, smartphones are now available for as little as Rs 3,000, but these do not offer very good user experience. However, smartphone prices are likely to fall  in the future, which will help increase broadband penetration. With regard to broadband infrastructure, there has been virtually no growth in fixed line broadband as, apart from a few cable operators, the major telecom players have not invested much in this area. On the wireless front, although there has been fairly good adoption of 3G services, the quality of these services is questionable. The industry and consumers are now eagerly awaiting the launch of 4G services.

Bharat Bhargava

The main reasons for the low broadband penetration in India are as follows:

• Low fixed line internet penetration – Due to the lack of fixed infrastructure, internet penetration has remained low and India ranks 125th in the world in terms of fixed broadband penetration. More than 85 per cent of the total broadband subscribers in the country are wireless subscribers.
• High capex for service launch – The financial environment for the Indian telecom industry is currently challenging as spectrum acquisition and infrastructure roll-outs require huge investments.
• Rural areas lag behind urban areas – Broadband coverage at present is mostly limited to urban areas. The demand for services in rural areas has been low mainly due to the limited purchasing power of people and the lack of awareness.
• Consumer awareness and education – The majority of the population in India is digitally illiterate, which hinders broadband service adoption. It is essential to impart training to people in the rural regions so as to make them capable of using the internet.
• Lack of relevant content and applications – Lack of multilingual and relevant content is also an impediment. There is a need to develop local content and applications that cater to local issues and needs, in local languages.

Neeraj Katariya

The reasons for the low broadband penetration include supply-side constraints as well as demand-side challenges. Some of the demand-side issues are limited penetration of access devices (smartphones, tablets, laptops, computers, etc.), limited local language content, and low digital/ internet literacy. Supply-side constraints are low penetration of wired telephony; limited and fragmented spectrum allocations, resulting in expensive services; and financially stretched telecom operators, resulting in limited spends on capital investment to roll out 3G/4G networks.

Udit Mehrotra

Currently, there is no government policy to safeguard the interests of broadband service providers, thereby creating disruptions and hurdles at multiple levels. This has increased not only network costs but also internet tariffs due to which the growth of broadband services has been limited. While internet penetration in metro cities is around 23 per cent, other cities have close to 10 per cent penetration only, while in rural areas, the penetration is abysmally low.

Will the government’s Digital India initiative improve the uptake of broadband services in rural areas?

Kunal Bajaj

The uptake of broadband services in rural areas will depend on the affordability of these services. The government’s initiatives, such as digitising services and providing subsidies directly to bank accounts through e-transfers, will definitely enhance the adoption and demand for internet services. This, however, will require good and affordable broadband connectivity.

Bharat Bhargava

Digital India will improve the uptake of broadband services in rural areas in the following ways:

• Improved connectivity – With the aim of connecting cities, towns and 250,000 villages through the broadband network, the Digital India initiative has the potential to give the much-needed push to broadband access in the country.
• Rural inclusion – The Digital India initiative is expected to make it viable for operators to operate in rural and semi-urban areas where broadband demand has been low. Digital literacy programmes like the National Digital Literacy Mission  will encourage people to learn how to use the internet and utilise it for their benefit.
• Data growth driven by digital services – The emphasis on e-governance and delivery of government programmes and services via digital platforms is expected to drive growth in data consumption, as well as provide opportunities to telecom companies to expand their 3G and 4G network capacities.
• Business case for new innovative services – The digital infrastructure being set up is expected to provide a platform to budding entrepreneurs looking for opportunities in areas such as e-health, e-entertainment and e-commerce. This will, in turn, push the consumption of mobile broadband services.

Neeraj Katariya

The government has been working on multiple initiatives to provide citizen welfare services through online platforms. Through its Make in India initiative, the government can help bring down the prices of access devices. This will spur demand for broadband services and will incentivise its uptake. Through initiatives such us the National Optical Fibre Network (NOFN)/ BharatNet project and free Wi-Fi, the government can lower the capital cost of broadband service/3G/4G network roll-outs in rural areas. These will, in turn, lower costs and extend reach by addressing supply-side bottlenecks.

Udit Mehrotra

Although the government’s Digital India initiative is commendable, private players also need to play a role for the programme to succeed. As per government estimates, the Digital India programme would give a boost to broadband connectivity in all panchayats, Wi-Fi provision in schools and universities, and public Wi-Fi hotspots.

The government’s BharatNet project aims to create a high speed digital highway to connect all 250,000 gram panchayats in the country. This would be the world’s largest rural broadband connectivity project using optic fibre cable (OFC).

While it clearly shows the government’s commitment to connect rural India with broadband, it would be difficult to achieve its objective without private player participation.

What new initiatives can be taken to achieve the objective of “Broadband for All”?

Kunal Bajaj

The government should focus on removing all possible hurdles that limit the expansion of broadband infrastructure and its affordability. In the case of wireless, the biggest hurdle is the availability and pricing of spectrum. The government should ensure that the spectrum is available at prices that will all-ow affordable plans to be offered to users.

Bharat Bhargava

• Application and services to drive usage – Incentivising multilingual content relevant to local needs and introducing digital literacy programmes to facilitate consumer support will help people in rural and semi-urban areas to adopt digital services.
• Innovative mobile services to drive growth – Operators need to adopt innovative business models. They should focus on new services such as digital payment, m-healthcare, m-education and machine-to-machine to increase the popularity of broadband services.
• Private sector participation – Public and private sector collaboration will help the government leverage the existing capabilities of private players in the management and operations of broadband network programmes.
• New ways to increase awareness about services – People should be made aware about the services by using technology for digitally disseminating information and setting up call centres and rural BPO firms.

Neeraj Katariya

The government should realise that, like with voice, the initial phase of rural broadband has to be wirelessled. It needs to incentivise operators to increase the reach of 3G/4G networks in rural areas. For example, the rural towers could be connected with OFC as part of the BharatNet initiative, which will reduce backhaul costs for operators. Also, the government should make more sub-1 GHz spectrum available for auction without being overly concerned about its revenues. As long as spectrum is made available through auctions, it will fetch a fair market price. It should also work towards bringing down the regulatory charges that are levied on the industry to free up operators’ financial resources, which, in turn, can be used to increase capital investments.

Udit Mehrotra

The government needs to put broadband under the critical infrastructure projects category and create an ecosystem wherein pre-laid shared ducts are created by government agencies and private players. This will not only ensure that fibre is available at reasonable rates to operators but also help reduce internet tariffs for end-consumers.

The government should also accept the Telecom Regulatory Authority of India’s recommendations on the exemption of licence fee on wireline broadband services for at least the first five years and allow the sharing of active and passive infrastructure among licensed service providers. Further, an enabling environment needs to be created to attract investments to the sector. This will reduce the financial burden on existing and new players. In addition, policy guidelines should be provided to protect the rights of the existing players.

A nationwide broadband network can prove to be a game changer for the country. It will help disseminate a wide range of services like communications, governance, health, education and entertainment across the country.

How will the adoption of 4G technology help change the broadband landscape?

Rahul Agarwal

Given the increasing smartphone adoption and demand for data-intensive applications, mobile operators must upgrade their network infrastructure to provide high speed data services by deploying OFC.

As per Frost & Sullivan estimates, India will have about 500 million mobile broadband subscribers by 2020, which will include 3G, evolution-data optimised and 4G users. According to Cisco, the overall internet traffic in India is expected to reach 2 GB per capita in the next few years. Next-generation network technologies such as long term evolution (LTE) and 3G need all-IP networks for data transfer. However, at present, most of the backhaul can carry only legacy time division multiplexing traffic. The deployment of all-IP networks will drive the demand for OFC.

Kunal Bajaj

The industry and consumers are hopeful that the 4G roll-out will increase the availability of high speed broadband services at affordable prices. It is expected that operators will make significant investments in both the 2300 MHz and 1800 MHz bands.

Bharat Bhargava

According to Ericsson’s mobility report, India is expected to have approximately 100 million 4G connections by 2020. While 3G is expected to remain the mainstream technology for mobile broadband services, 4G will drive the next round of the internet revolution in India. It is not only more efficient in utilising spectrum but is also more relevant in a country that has spectrum scarcity. 4G will open the doors to a number of applications that are data-hungry and require higher bandwidth, such as videoconferencing, e-learning, security surveillance and turn-by-turn navigation.

As compared to 3G, 4G services would offer a better user experience and allow telcos to offer innovative services and new business models. Once 4G is available for the mass market, telcos and broadband service providers will compete to produce and launch multimedia services to monetise their networks. However, for 4G technology to cater to the mass market, the handset device ecosystem needs to improve with device availability across multiple price points in order to drive adoption.

Neeraj Katariya

4G, especially in lower bands (700/850/ 1800 MHz), will significantly increase the capacity and reach of high speed broadband networks in the country. We strongly believe that rural broadband connectivity can only be achieved through 4G LTE networks deployed in sub-1 GHz frequencies.

Udit Mehrotra

The 4G network has certain inherent limitations in network connectivity, coverage, terrain and speed, which will make the user experience somewhat unsatisfactory. Although 4G will deliver a high quality mobile internet experience, it will not be able to match the high speed and quality offered on an optic fibre network. Therefore, wireline broadband services will continue to be in demand in both the residential as well as commercial user segments.

What is the current status of the fibre-to-the-x (FTTx) market in India? What measures can be taken to encourage higher adoption?

Rahul Agarwal

The country is witnessing many fibre-to-the-home (FTTH) deployments, through both private companies and government initiatives such as the NOFN. The total length of the OFC network in India is more than 1 million route kilometres. Bharat Sanchar Nigam Limited owns the lion’s share of the OFC network. Other service providers are also showing keen interest in deploying and owning optical fibre network infrastructure. Through the NOFN, the government aims to provide high speed broadband connectivity to all 250,000 gram panchayats in the country. The NOFN is expected to add another 100,000 km of OFC routes.

Kunal Bajaj

The country has not been able to fully deploy the FTTx technology. There has been no growth in fixed line broadband, which still uses the digital subscriber line (DSL) technology. The biggest impediment to the adoption of FTTx is the absence of rationalisation of costs and processes. India holds vast potential for the deployment of this technology.

Bharat Bhargava

Until now, the penetration and reach of OFC in India has been low. Last mile connectivity to the consumer has been poor and people are largely dependent on wireless services for broadband. The government plans to cover 250,000 gram panchayats with OFC by December 2016 to address the connectivity issue in rural areas. FTTH deployments are also increasing with both public and private operators rolling out these services. The government is working towards solving right-of-way (RoW) issues, and this will help operators in laying OFC. FTTx services will also help in minimising the reliance of operators on deficient spectrum, which is largely used for delivering mobile services.

Carrier-agnostic FTTx infrastructure sharing models can reduce the cost of deployment and increase uptake, thereby driving financial viability for the ecosystem.

Neeraj Katariya

We have limited FTTH connections today and most of these are in the metro cities. Further, RoW regulations act as a major impediment in increasing fibre connectivity. At present, not only are RoW charges high and vary significantly from city to city, but they also involve complicated and unpredictable approval processes. All these factors along with high maintenance costs restrict uptake.

Udit Mehrotra

There are several benefits of FTTx that easily outweigh the copper-based DSL medium, which accounts for more than 90 per cent of the existing network in India. FTTx delivers high speed data, video and voice on fibre. For higher adoption of FTTx, all buildings should allocate two or more entry points up to the designated room and further create space for the distribution of optic fibre to all floors/working units. All major government initiatives, including Make in India, Digital India and Smart Cities will depend on a robust broadband network. The OFC network will be the central nervous system of smart cities.