Will Budget Help India Realise Its Broadband Dream?

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Keeping rural India out of the net has been hugely detrimental to India’s economic growth, says Pranav Roach, Hughes Network Systems

India had 238.71 million internet subscribers at the end of December 2013, which now takes the country to third position after China and the USA. The number of broadband subscribers (those able to access the internet at a minimum speed of 512 kbps) is 55.20 million, therefore taking the number of ‘narrowband subscribers’ to 183.51 million at the end of December 2013. Sometime in 2011, in an effort to improve India’s teledensity and enable ubiquitious access to the internet for rural India, the government rolled out the ambitious National Optical Fibre Network (NOFN) to provide Broadband connectivity to 2.5 lakh village Panchayats. This was expected to be completed in 2014 but till earlier this year, only pilot projects in Rajasthan, Andhra Pradesh and Tripura had been completed. New dates were shared for NOFN’s completion: phase one completion of 1,00,000 villages by December 2014, 1,00,000 additional villages by December 2015 in phase two and 50,000 villages by March 2016 in phase three.


However, it’s anybody’s guess whether these targets will be met. An important reason for this delay (and perhaps largely over-looked by mainstream media) was the alleged inability of the government to create a sustainable business model for rural broadband. Elsewhere however, a few state government’s adopted a different model to connect gram panchayats. The state governments of Gujarat and Chattisgarh were early movers when it came to introducing ubiquitious internet connectivity at the gram panchayat level using a VSAT model to ensure reliability and keep costs low. The VSAT model enabled video, voice and data offerings in the areas of e-governance, distance education, telemedicine, agriculture and interactive advisory and counselling services. Each panchayat had its own email address and over 13,000 of them have been hosted on the state-owned data centre. Unfortunately this successful, time-bound and cost-effective model was not considered for the rest of the country. 

A VSAT model uses a satellite in a geo-synchronous orbit to provide internet/broadband connectivity; in India this is typically done using the Ku – Band but globally it’s through the more preferred KA – band, better in terms of both, coverage and throughput. The VSAT model used by Gujarat and a few other states worked because of two very important reasons – the model was low cost – set up at a cost of only Rs. 200-300 crores per state and the second, equally important reason; deployment and roll-out was extremely quick as there is no digging or laying of fiber optics or towers required. This doesn’t even merit a comparison with a terrestrial broadband network such as the NOFN project, which is pegged at Rs 21,000 crores and growing (and already facing a shortfall of Rs. 4763 crores for the first phase of roll-out). So even if we were to extrapolate this into a national rollout – 29 states at Rs. 300 crores each, a satellite enabled broadband umbrella covering the entire subcontinent would perhaps be somewhere in the range of approximately Rs. 8,700 crores.  And the time taken for deployment would be a few months compared to several years. And given that it is satellite linked, connectivity would not be affected by extremes of weather or man-made disruptions (including extremist actions in Maoist affected or other regions for example). The previous government, for reasons best known to itself, chose to not to adopt this tried and tested model (its widely used across all continents – from Africa to North America, Lat Am, China and the Middle East). 

In addition to the satellite enabled VSAT model highlighted above, the other issue that we need to consider is how we define broadband. It is unfortunate that India defines ‘broadband’ as 512 Kbps while the global average is 3 Mbps (and growing) and countries like Korea, currently at 14 Mbps now considering an increase to 100 Mbps. Another distressing statistic – most new internet users are coming through narrowband networks and on mobile primarily through 2G networks. Consequently an ubiquitous, always on, pan-India ‘broadband’ network just does not exist.

Is there a way out? I believe the solution lies in the government introducing an Open Sky policy. The Telecom Regulatory Authority of India (TRAI) had earlier proposed this to benefit the Indian DTH and VSAT operators and had asked for a revision of the 14 year old Indian satellite communications policy.  The new government’s first budget needs to allow private investment in satellite services as per the existing policy to reduce dependence on the sole provider of satellite bandwidth.  Despite the monopoly of ISRO a majority of the current satellite demand is met by capacity hired from foreign satellite operators. It’s interesting to note that most country across the world, from the US to those in Europe and even China permit private participation and investments in satellite services. An Open Sky policy would allow private satellite and VSAT operators to place (leased or owned) satellites in geosynchronous orbits above the Indian subcontinent to provide a steady 24×7 broadband umbrella.  A single powerful, high throughput KA band satellite (100 times more powerful that the exiting INSAT satellites offering these services) would allow every single village to embrace the internet. 

Imagine the benefits – an Open Sky policy would be much more than just facilitating DTH services or improving unlinking services used by Indian corporates. It would enable broadband applications such as education services to populations unable to access the urban centres of learning. Training and skills development services would get a boost.  Equally importantly small businesses would come online and get direct access to consumers across the country. India, in the midst of its own e-commerce boom (though it’s still extremely nascent) has a fraction of the approximately 2 million transacting merchants that China’s leading ecommerce portal Alibaba has. Imagine to what extent this number could grow if sellers from across the country had the abiliy to come online to sell their products. A broadband revolution can enable small businesses use the Internet and grow 50 per cent faster than those unable to access the internet. Enabling micro, small and medium businesses and helping them to grow faster is a great way to accelerate GDP.

In conclusion, I would say that satellite enabled broadband services can supplement and support services provided by wireline and wireless operators. All three are required to provide comprehensive and forever-on access and enable India to become a true broadband nation. Keeping rural India out of the broadband loop will be only to India’s detriment. And we cannot afford to wait forever!

The author is president of Hughes Network Systems India Ltd

All figures sourced from TRAI and/or media reports – See more at: http://www.businessworld.in/news/india/will-budget-help-india-realise-its-broadband-dream/1439659/page-0.html#sthash.IbQXekcI.dpuf

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