Broadband to go free in 2 yrs

Broadband to go free in 2 yrs
JOJI THOMAS PHILIP
TIMES NEWS NETWORK [THURSDAY, APRIL 26, 2007 02:00:26 AM]

NEW DELHI: The government proposes to offer all citizens of India free, high-speed broadband connectivity by 2009, through the state-owned telecom service providers BSNL and MTNL. While consumers would cheer, the move holds the potential to kill the telecom business as we know it.

You have heard of free municipal broadband — many cities in the US have drenched themselves in wireless broadband connectivity which is freely accessible to residents. The idea is to boost economic activity in general. The government of India plans to achieve free broadband connectivity at a speed of 2 MB per second across the country, with a similar goal. Senior government officials expect to be able to achieve this goal spending only a portion of the corpus of the Universal Service Obligation Fund (USOF).

All telecom operators contribute 5% of their revenues every year to USOF. It is estimated that the unutilized sum from the USOF has touched Rs 9,194.12 crore by March, 2007-end.

The current technological trend is for voice calls also to shift to the internet, using voice over internet protocol (VOIP). The quality of VOIP calls, patchy to start off with, has been improving steadily over the years and by 2009, is likely to be as good as current analogue calls that establish a circuit between the calling and called parties. When that happens, revenue streams from calls would dry up and telecom companies would need to develop value-added applications to make money from the connectivity they provide for free or virtually free.

The department of telecom (DoT) will be taking a series of steps to make its plans for free broadband a reality. These include, using the USOF to set an extensive optic cable network across the country, opening up the long-distance sectors to further competition, allowing free and fair access to cable landing stations, permitting the resale of bandwidth, setting up web hosting facilities within the country and asking all internet service providers to connect to the National Internet Exchange of India (NIXI).

With international bandwidth rates in India being between two-to-five times higher than the global standards, the DoT will also go all out to break the monopoly of existing national and international distance players in a bid to induce cut throat competition in this sector. “India has only a handful of NLD/ILD operators while small countries such as Singapore and Taiwan have over 30 and 60 long distance operators respectively.