State of Broadband in India

By Sujai Karampuri, Guest Author

Take a look at current broadband penetration in India? It’s a mere 2.5 million subscribers (or less). That’s less than 0.25%. Most indicators of technology penetrations, such as telephone, PC, mobile, broadband, have a direct correlation with increase in the GDP and per capita of a nation. However, India’s broadband penetration seems to be extremely low. Is it that we are going to skip broadband the way we skip 1G and the industrial revolution?

The penetration of broadband will increase in the next few years and will catch like a wildfire when suddenly the cost of adoption and network deployment and maintenance will turn out to be extremely low compared to the kind of market demand it has.

The drivers will be-

* Decreasing cost per line
* Decreasing operating expense
* Decreasing cost of PC (or similar device)
* Social attitudes and habits embracing broadband facilities
* More Indian content

Broadband Revolution in India

In effect, I believe that there is a very big room for growth of broadband penetration in India. With the decreasing cost of PCs to under Rs. 10,000 and then to under Rs. 5000 soon, and with increasing in content for Indian masses, the broadband penetration will be going through a revolution, and I call it the Broadband Revolution in India. The cost per line will dramatically reduce from the current Rs. 7000-10,000 per line to around Rs. 1500-2500 per line by 2010.

The pieces of puzzle are falling into place. With advent of wireless broadband (such as WiMAX and WiFi), with decreasing costs of PC, we will see the penetration grow slow and suddenly, when the price points have achieved that critical milestone, it will take a dramatic upswing and go on an exponential path for the next few years. In my estimation, by end of 2011, Indian will have more than 350 million broadband subscribers and by end of 2013, we will have more than 600 million subscribers.

My question to all of us

Indian telecom operators are smarter than the rest of us. They usually wake up quite early to realize the potentials of Indian markets. They will definitely get themselves geared up for this oncoming Broadband Revolution. However, will the Indian entrepreneurs, Indian telecom vendors, Indian VCs, Indian startups wake up to this? When Indian Mobile Revolution happened, it was foreign telecom vendors which benefited. They supplied the radio access network equipments, and they supplied the core network equipment. They also supplied the mobile handsets and PDAs. Indian telecom operators had no choice but buy equipment from these foreign players.

Operators like BSNL, Airtel and Reliance throw open tenders worth billions of dollars, and most of these monies are taken up by foreign companies. Almost no domestic company seems to wake up to capture some of this market share. We could give ourselves an excuse that Indian ecosystem was not conducive to create such suppliers in India. That we didn’t really anticipate or predict the oncoming Mobile Revolution to benefit from it. Will we give ourselves the same excuse for missing Broadband Revolution, or will we do something about it?