India - Calls for a more integrated and longer term plan for broadband

[express computer online] Earlier this week, we attended the TRAI (Telecom regulatory authority of India) forum for discussing proposed National broadband plan where key stakeholders including mobile operators, equipment vendors, cable operators and consumer groups shared their views. With the impending launch of 3G/BWA services, TRAI will need to ensure that any policy on broadband is both non-discriminatory and forward looking in order to accommodate the interests of all players in the ecosystem.

The regulator needs to take a longer term view while drafting policy

Though there is already a national broadband policy drafted in 2004, a need was felt for a new broadband plan because the previous policy has largely failed in increasing the broadband penetration in the country. The broadband penetration in India is currently less than 1% despite the fact that there are 104 operators. Currently, there are only 200,000 new broadband connections per month, compared to an equivalent of 15-18 million new mobile connections. Some of the key proposals from participants included local loop unbundling (LLU), tax benefits for broadband CPEs, nodal authority for all RoW requests, separate definitions for fixed and mobile broadband, auction of 700 MHz and 2.6 GHz spectrum and equitable treatment of all broadband service providers. Few stakeholders have evinced interest in national fiber network (NFN) and suggested use of more than 1 million route kilometers of fiber already laid by different operators.

Some of the participants rightly pointed out the short term nature of planning by TRAI in its consultation paper and we believe that the scope and time period envisaged under the new policy must include a plan for increasing broadband penetration up to 2020 compared to the existing proposal of planning up to 2014. Ovum analyst, Santosh Sathanur, opined, “The proposed plan of up to 2020 should also be further subdivided into phases with clear objectives for each phase. Due to the initial economies of providing broadband access, the initial phases of any plan proposed by TRAI should provide an increased fillip to wireless broadband in rural areas and LLU in urban areas with pan India wired broadband given due importance in subsequent phases.”

More encouragement is required for developing localized content

In order for broadband to be successful in India, operators should design business models which provide the same level of comfort and ease that consumers today attach to mobile telephony. Similar to mobile communications, where introducing local language user interface resulted in increased uptake of mobile services, broadband take up in India is linked to a content ecosystem which is localized in nature. Sathanur, said, “TRAI needs to work on developing an ecosystem which supports developing more and more content in local Indian languages by providing seed funding and/or taxation benefits to select companies focused on developing rural-specific and local language information. Developing area specific local content in order to address the local and immediate needs is imperative for increased penetration of broadband services in rural areas.”

The regulatory framework must treat all broadband providers equitably

The current licensing framework varies for different players providing Internet services. Though the ISPs are currently required to comply with speed requirement of 256 Kbps per subscriber in order to term their service as broadband, there is no clarity on how the same can be applied to mobile players who are expected to provide high speed Internet/broadband services with the launch of 3G and BWA networks. Further, the ISP’s licensees are subject to a lower revenue share regime compared to the mobile players offering Internet services with Unified access service (UAS) licenses. The cable operator license is currently not seen in the same light as a UASL or ISP license. Hence, any infrastructure deployment benefits derived by UASL or ISP licensees by not paying license fee on revenues earned by respective infrastructure entities do not apply to cable operators leaving them in a disadvantaged position. Sathanur added, “In order to ensure a competitive landscape for operators providing broadband services in the future, the regulator should ensure a license treatment which is similar for all service providers.”

TRAI needs to take a holistic view on national broadband plan, says Ovum