Big Bang, Broadband

Private players, including the Tatas, as well as government-owned BSNL and MTNL, are ramping up infrastructure to provide high-speed broadband8212;Internet access at speeds greater than 256 kbps that enable high-speed downloads and video-on-demand8212;to both retail and corporate customers in the metros by the end of the year.

LAYING THE BIG FAT PIPES

Of the massive 12.2 billion market, 50-million consumers will account for 9 billion revenues by 2010, say industry analysts. Till January, India had about one million broadband customers8212;consisting mainly of corporate customers8212;who want high-speed internet connectivity for video-conferencing.

To start with, Bharti is offering broadband services in those pockets where it has a licence to provide basic phones. The company has started offering services in Delhi and has established broadband in Punjab by laying over 245 km of fibre optic cables. 8216;8216;We will touch every square inch of India,8217;8217; said Sunil Mittal, Chairman of Airtel while launching his broadband services in Punjab last week.

On the other hand, Reliance8217;s retail foray has already begun with the company testmarketing its broadband IPTV internet protocol television services like video on demand in Pune and is now eyeing Mumbai for a launch. The company8212;which has wired 50,000 buildings by now8212;has laid over 20,000 kms of fibre optic across the country and will provide last mile solutions in a combination of fibre optic and copper wire network to its metro customers.

8216;8216;We are looking at launch of broadband in Mumbai by this year-end,8217;8217; said Reliance Infocomm, President, Sanjay Behl. The broadband services to corporates are already adding four per cent of revenues to Reliance Infocomm8217;s topline. 8216;8216;Broadband will be our biggest growth driver,8217;8217; Chairman of Reliance Infocomm Anil Ambani predicted in a presentation to analysts.

And then, there8217;s the Tata Group, which has launched its broadband services for corporates but its retail launch is still a few months away. VSNL did not want to give details about their plans, but there8217;s no denying that the Tata Group will also emerge as a key player in the broadband sweepstake.

DOWNLOADED BY CONSUMERs

The broadband revolution is also fuelled by a massive drop in rates with the minimum rate of Rs 280 including rent of a modem charged by BSNL and MTNL. Though this cannot qualify as classic broadband, these rates are far lower than what the consumer was paying earlier.

Take, for example, in September 2004, the minimum monthly tariff for a 256 kbps connection for 25 hours was Rs 1,000. By June 2005, the prices fell to Rs 500 per month and by September 2005, the prices fell further to a more affordable Rs 280 a month.

With this price, and with operators like MTNL and BSNL bundling broadband with telephone lines, the sector took off with many first-time customers directly signing up for broadband, while dial-up connections are facing a slow death. Now, after having tasted a sample of what broadband can do, will consumers bite when they come face-to-face with the real thing?

Yes, say experts8212;and at great, competitive prices. 8216;8216;The expansion of broadband services by telecom operators is consumer-driven,8217;8217; says Enam Financial8217;s telecom analyst Salil Pitale.

At present broadband services are provided by MTNL in Mumbai and Delhi on its existing copper wire network. In Mumbai, MTNL has 1 lakh customers. But as the government-owned company has not laid fibre optic network for its broadband customers, its customers are not getting very high-speed data transfer.

It is this lacunae which both Reliance, Bharti are planning to exploit. 8216;8216;Focus on products and services will be vital to our consumer strategy,8217;8217; a Reliance official said. Poor last-mile connectivity, lack of a wireless alternative, and low PC penetration has hampered the growth of broadband till now.

And the really good download here: With private players now becoming aggressive, and existing players trying to retain their market share, the Indian consumer is gearing up to be broadband king.