The Indian telecom market is the fastest growing in the world, with mobile telephony being the largest contributor. Broadband penetration, however, continues to lag behind with only 12.12 million subscribers in the country as compared to 874.68 million mobile subscribers as of May 2011.

Broadband users constituted 60.5 per cent of the 19.67 million internet subscribers as of March 2011. According to CRISIL Research, the country’s internet and broadband subscriber base is expected to touch 140 million in 2014-15.

Given this potential, the effective deployment of 3G- and 4G-based broadband technologies is being seen as a critical step for future growth. These technologies can provide quality broadband services at high speeds and at affordable rates. Advances in broadband wireless access (BWA) technologies would play an important role in bridging the digital divide in India.

Market status

Wireline has been the dominant medium for providing broadband services for a long time. Among the available wireline broadband technologies, digital subscriber line (DSL) is the most frequently used platform. Of the total wireline broadband subscriber base of 11.5 million as of March 2011, DSL constituted 86.09 per cent followed by cable modem at 5.97 per cent, Ethernet/local area network at 4.81 per cent, leased lines at 0.33 per cent, fibre-based networks at 0.2 per cent and other mediums at 0.01 per cent.

As far as wireless broadband access is concerned, these services are currently being provided through Wi-Max, EVDO and 3G HSDPA. Tata Communications and Reliance Communications (RCOM) deployed Wi-Max broadband networks in the unlicensed spectrum band in select cities three years ago, but soon shifted their focus to EVDO, a natural progression for data services on CDMA technology. Bharat Sanchar Nigam Limited (BSNL) has very limited Wi-Max coverage and does not have a clear rollout strategy yet. The total Wi-Max subscriber base in the country currently stands at less than 200,000.

Tata Teleservices Limited (TTSL) launched the Tata Photon+ broadband services on EVDO in early 2009. BSNL rolled out a similar broadband service at about the same time, followed by RCOM, which launched the Reliance Netconnect Broadband+ service in the first quarter of 2009. In the last quarter of the same year, MTS, a new entrant, jumped onto the bandwagon and launched MBlaze. Virgin Mobile India, a mobile virtual network operator on TTSL’s network, has also been offering wireless broadband data plans under the vFlash brand. The total EVDO broadband user base was estimated to be 1.2 million as of end-2010.

Meanwhile, the launch of 3G services by companies like Bharti airtel, TTSL, Vodafone Essar and RCOM is expected to have a positive effect on broadband uptake. According to estimates, 3G subscriptions grew by 73 per cent in the first quarter of 2011 to reach 12.2 million.

Government initiatives

Providing broadband connectivity has become a key focus area for the government. The biggest government initiative on this front is the National Broadband Plan, which envisages connecting villages through optic fibre and, in the last mile, through wireless broadband. (The plan is awaiting cabinet approval.)

As part of the plan, the government will implement the Rs 250 billion National Optic Fibre Network project (2.5 million km) connecting 250,000 village panchayats across the country. The project would be supported by the Universal Service Obligation (USO) Fund.

Also, the Department of Telecommunications is planning to float a tender for providing wireless broadband connections to over 500,000 villages in 18 months. This network is estimated to cost Rs 80 billion-Rs 150 billion.

A similar programme, the Rural Wireline Broadband Scheme, was launched last year. Under this scheme, BSNL, the implementing agency, had provided 261,413 broadband connections and set up 2,506 kiosks till January 31, 2011.

3G and BWA

The 3G and BWA spectrum auctions were expected to provide a much-needed fillip to broadband wireless services. While most operators have launched 3G services, BWA licence winners are yet to select the technology platform for service rollout. Options like long term evolution-time division duplex (LTE-TDD), Wi-Max and hybrid networks that support Wi-Max initially and offer the flexibility to shift to LTE-TDD later are being considered.

State-owned operators BSNL and Mahanagar Telephone Nigam Limited (MTNL), which received BWA spectrum in 2009, have deployed only a few Wi-Max networks. However, in late 2010, with Reliance Infotel, Aircel and Qualcomm pledging allegiance to LTE-TDD, the scales seem to be tilting towards this technology. Unsure about the dominant future technology, BSNL and MTNL have asked their franchise partners to keep both technology options open.

Operator initiatives

While the internet service provider (ISP) segment is fragmented with over 150 players, only a few dominate the market and together have over 90 per cent share in it. The following are the key players in this space:

BSNL

BSNL is the largest internet and broadband operator in the country. It had more than 11.31 million internet subscribers or about 60 per cent market share as of March 2011. Of these, 7.5 million are broadband users. The company plans to increase its broadband subscriber base to 16 million by March 2014.

Currently, the operator offers services with speeds of up to 8 Mbps using asymmetric digital subscriber line (ADSL) technology, which utilises copper telephone pairs to provide fixed line broadband connectivity.

On the wireless front, BSNL has launched Wi-Max services in some rural and urban pockets. In the urban segment, the company has introduced services in Punjab and Kerala, and has entered into a franchise agreement with SOMA Networks for Gujarat, Andhra Pradesh and Maharashtra.

The ISP is also developing a network to link 400 universities, colleges and polytechnic institutes to provide broadband access. In addition, the company will roll out wireless broadband services in 62,443 villages under the USO Fund’s rural broadband initiative.

MTNL

MTNL offers broadband services in Delhi and Mumbai under the Triband brand. It is the country’s second largest ISP with 2.42 million internet users as of March 2011, of which 947,611 were broadband subscribers. The operator has 90 per cent market share in its service areas.

MTNL was the first operator to offer broadband services using ADSL 2+ technology. In early 2011, the company upgraded its network to very high bit rate DSL, which increased data speeds from 1-2 Mbps to 10-20 Mbps. In April-May 2011, the company launched fibre-to-the-home triple-play broadband services with access speeds of up to 10 Gbps. MTNL is looking forward to deploy metro Ethernet technology to improve last mile connectivity. The operator is also planning to share its optic fibre cable network to generate additional revenues. It intends to buy international internet bandwidth from Bharti airtel and Tata Communications to augment its overseas networks.

MTNL has selected the Wi-Max platform for BWA rollout and has launched services in a few pockets. It is still looking for franchise partners.

RCOM

RCOM, India’s third largest internet and broadband service provider, had a market share of 11.05 per cent and provided services to around 2.17 million customers as of March 2011. Broadband users constituted only 8.5 per cent of this subscriber base.

The company’s primary building access technology is metro Ethernet with ring-based fibre uplinks. It has selectively used the wireless local multipoint distribution service to access buildings in cities where it is yet to deploy wireline direct building technology. The company also plans to leverage its metro OFC networks to establish direct building connectivity.

Aircel

The operator has BWA licences in eight telecom circles and is reportedly planning to roll out services by early 2012. It would invest about $10 billion by 2014 in service rollout as well as network expansion.

Aircel will provide broadband services through the LTE-TDD platform and is in talks with equipment vendors such as Huawei Technologies, ZTE Corporation, Nokia Siemens Networks (NSN) and Ericsson for network deployment.

Bharti airtel

Bharti airtel, India’s leading mobile operator, has 7.29 per cent market share in the broadband space. It is the country’s fourth largest ISP and serves more than 1.5 million users in over 96 cities as of March 2011. Broadband subscribers accounted for more than 90 per cent of the operator’s internet user base.

Bharti airtel provides broadband internet access through the DSL technology platform. It recently launched broadband plans offering speeds of up to 4 Mbps in metros, 2 Mbps in 10 major cities and 1 Mbps in other areas. The company has also introduced broadband TV services that allow users to browse the internet or watch TV on the computer without additional data usage charges. The operator has signed major contracts with vendors such as Ericsson, NSN and Alcatel-Lucent for network management.

Bharti airtel has BWA spectrum in the Maharashtra, Karnataka, Kolkata and Punjab circles, and is expected to roll out services towards the end of 2011.

Pure-play ISPs

Besides the universal access service licensees, several pure-play internet and broadband service providers are catering to the needs of enterprise and retail customers.

Hathway Cable & Datacom Limited

Hathway led the segment with a market share of 1.77 per cent and an internet subscriber base of 348,345 as of March 2011. Broadband constituted about 99 per cent of this user base. The company provides internet services through cable networks.

YOU Broadband & Cable Limited

YOU Broadband had a share of 1.66 per cent in the internet service market and a subscriber base of 325,993 as of March 2011. The company offers high speed internet, and voice and video services through the cable modem platform to the residential, small and medium enterprise, and corporate segments in 12 Indian cities. It has an OFC network of over 1,000 km and a last mile coaxial cable network of 4,000 km.

Tikona Digital Networks Limited

A relatively new player in the broadband space, Tikona is a Mumbai-based wireless broadband service provider with an internet subscriber base of 216,351 as of March 2011. Of this, 215,047 were broadband users. The company has a pan-Indian Category A ISP licence.

Tikona has BWA licences in five circles and has selected LTE for providing services. It offers services in 30 cities using the unlicensed 5.8 MHz spectrum, which is commonly used for small spaces such as homes and offices. The company recently acquired HCL Infinet, a wholly owned subsidiary of HCL Infosystems, with the objective of adding an enterprise service base.

Tata Communications Internet Services

Tata Communications Internet Services had an internet subscriber base of 185,070 as of March 2011. Its OFC  network currently covers 60 cities and 125 points of presence (PoPs). The company has tied up with US-based Telsima to offer BWA services through Wi-Max in 110 cities across the country. The company’s Wi-Max-based retail broadband services are already available in Delhi NCR, Bangalore, Hyderabad and Chandigarh.

Sify Technologies

Sify Technologies had an internet subscriber base of 102,705 as of March 2011. It currently has 900 PoPs serving more than 400 cities in India. Sify was among the first private players to offer internet access in the country. It has set up last mile connectivity through mediums like Wi-Fi connections using rooftop antennas, and copper connections using phone lines or cable TV connections.

BWA initiatives

The following are some of the key initiatives taken by successful bidders in the broadband space:

Infotel Broadband

Reliance Industries Limited-owned Infotel Broadband is the only company to have won BWA licences in all the 22 telecom circles. The company has chosen LTE-TDD as the technology platform for service rollout and is expected to cover 700 cities by end-2011 in the first phase. In order to facilitate this, Infotel plans to lease 26,000 towers initially. To manage its LTE capabilities, the company intends to award contracts worth $2 billion and has invited bids from international telecom vendors like Huawei, Samsung, Ericsson, Alcatel-Lucent and NSN. It is also tying up with handset manufacturers like Samsung for bulk procurement of tablet PC devices such as the Galaxy Tab, which supports LTE. The company is reportedly planning to invest $1 billion in BWA service rollout in India.

Qualcomm

Qualcomm acquired 20 MHz BWA spectrum in four circles through one of its Indian subsidiaries, Wireless Broadband Business Services Limited,  in 2010. The company holds 74 per cent stake in the broadband venture and has evenly off-loaded the remaining 26 per cent to the Global Holding Corporation and Tulip Telecom.

The company plans to exit the venture  once it finds a suitable Indian partner for LTE deployment.

Augere Wireless Broadband

UK-based Augere Wireless Broadband has BWA spectrum in the Madhya Pradesh circle. Currently, the company is looking to tie up with a local partner for launching its Indian business. Augere has selected the LTE-TDD platform for service launch.

The way forward

The existing broadband access network does not cover most of the country’s rural and remote areas. Government initiatives in the rural broadband segment as well as the launch of 3G services will improve broadband penetration in India in the coming years. Also, the 3G road map and BWA network rollout by 2012-13 would present a major opportunity for telecom operators to create and sustain networks that will meet the requirements of 400 million internet connections by 2015.