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Journalism of Courage
On Friday evening, Internet firms 8212; the step children of India8217;s IT revolution8212; had reason to celebrate. The telecom regulator announced a cap in tariffs for international bandwidth, setting the stage for price cuts in the langushing business. Starting April 1, the fastest international bandwidth will be 35 to 71 per cent less expensive than today. While this may make for immediately less expensive ISD calls, it will also give high-quality, high-speed Internet the kick-start it needs.
The Telecom Regulatory Authority of India Trai argument is simple: Only three operators offer international leased bandwidth in India, compared to 14 in Korea, 24 in France and 32 in Germany and the US. With little or no competition, they were unlikely to cut prices on their own. To encourage Internet penetration beyond today8217;s 25 million, subscriptions have to cost less.
But bringing average Internet usage in the country up from 15-20 minutes to at least an hour every day, as in most more developed nations, will not be a cakewalk.
Trai8217;s Friday announcement assures a new round of discussions to address domestic bandwidth prices in the immediate future. A re-look at infrastructure in landing stations is also in the pipeline. But expectations are high. 8216;8216;Overall, we are bullish on estimates,8217;8217; says R. Ramaraj CEO, Sify Ltd. 8216;8216;I think it is a welcome step from the regulator. Once domestic bandwidth prices are addressed, like Trai seems to have said, and last mile problems are settled too, users can expect significant price drops,8217;8217; he points out.
The least expensive 8212; and slowest 8212; E1 bandwidth prices have been left untouched by the regulator, who has argued that most of the growth in Internet subscriptions will come from this segment 8212; if better quality access needs a fillip, that8217;s where prices should be lower, it points out.
In any case, a possible awesome threesome of reasonably priced international bandwidth, freer last mile and more metal to landing stations has the internet and telecom industry reaching an overjoyed frenzy. 8216;8216;The ceiling will shift people towards higher use, specially in homes and at small and medium enterprises SMEs. It will take Internet access to cyber cafes in class B and C cities, where most of the growth is coming from,8217;8217; says Preeti Desai, president, Internet and Online Association, India IOA.
India8217;s internet users fit into three neat sets: 8216;8216;Evolving users8217;8217; who use less than 11 hours a week, medium users picking up 11 to 20 hours a week and heavy users, who are online more than 20 hours. The trick to pushing usage up lies in raising the quality of services they get.
8216;8216;After a price drop, smaller commercial set-ups will switch to better quality internet. And as more people access the web in cyber cafes, the more they8217;ll be tempted to opt for individual connections,8217;8217; says Desai. Moving people from the 8216;8216;evolving8217;8217; to heavy usage will give E-commerce a thrust too.
International bandwidth tariffs have been the key culprit in keeping the Internet largely inaccessible. Now that tariffs are under the regulator8217;s scanner and there8217;s more to come, industry estimates are buoyant: Internet usage can shoot up 8 to 20 per cent this year and users can prepare for a far richer online experience. Watch this download.
