Stage set for new broadband policy

In Mumbai, only 15.87% of fixed line telephone subscribers have broadband connections — the lowest among the metros.

According to data available with the Telecom Regulatory Authority of India (Trai), Delhi has the best record with 28.97% of fixed-ine subscribers being broadband users, followed by Chennai at 25.8% and Kolkata at 16.98%.

Also, the broadband penetration in India is low despite the fact that 104 service providers are providing broadband services. Going by the Trai data, the net broadband addition per month is just 0.1 million to 0.2 million in contrast to 18 million mobile connections per month. The broadband penetration is just 0.74% compared with teledensity of 52.74%.

In this backdrop, the regulator has come out with a consultation paper on a national broadband policy. The regulator will formulate its recommendation on the subject in a few months, which may then be taken up by the government for a broadband policy.
An ambitious broadband policy, announced in 2004, flopped big time with the huge mismatch between its targets and achievements.

“It is of concern to note that we have just 8.75 million broadband connections in the country at the end of March 2010, as against the target of 20 million broadband subscribers by 2010, set by the Broadband Policy 2004,” Trai has noted in the consultation paper released on Thursday.

The paper comes just two weeks after the meeting between the visiting US Federal Communications Commission chairman Julius Genachowski and Trai chief J S Sarma. The two discussed various regulatory issues, including broadband. Like India, national broadband is a priority area for the Obama administration in the US.

The focus of the Trai consultation paper is to review the definition of broadband, to address regulatory and licensing bottlenecks, if any, for speedy growth of broadband, to identify infrastructural bottlenecks impeding the growth of broadband in urban and rural areas and suggest corrective measures and to identify the need for a national optical fibre network.

Pointing out that the growth of broadband will increase with the launch of 3G (third generation) and BWA (broadband wireless access) services, the paper projects 5%, 20% and 40% households in the country to have broadband connections by 2010, 2012 and 2014, respectively.

At present, internet service providers, unified access service licensees, cellular mobile service providers and basic service operators are all permitted to provide broadband access under the existing licensing framework. But the top 10 service providers, among a total of 104, account for more than 95% of the market. Of this 95% market share, again, 70% is occupied by the state-owned companies BSNL and MTNL, Trai has said. Despite having licence for provisioning of broadband services, the majority of service providers are unable to penetrate the market, which is dominated by a few players, it has stated.

Currently, spectrum auction for wireless broadband is underway in the country, and it is expected to fetch over Rs40,000 crore revenue to the exchequer, while the initial government target was just 15,000 crore.