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India can have 500 million internet users by 2012 – Is that a pipe dream?

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Manufacturers Association for Information technology (MAIT) the India IT hardware group has set itself an ambitious target. Ambitious would be an understatement if we look at the numbers.

India could have 500 million internet users, 100 million broadband connections and 100 million connected devices by 2012, provided infrastructural bottlenecks are removed and 3G and Wi Max networks are rolled out early, industry body representing the IT hardware MAIT today said. (Business Standard)

A convenient caveat as expected in all estimates is also here. Marked by the keyword ‘provided’. 3G and WiMax networks are rolled out early – that’s a speculation. Because, they won’t be rolled out early.

3G auction did not happen and looks like it would take 6 more months. After which the operators will take 6 more months to roll out their network. That is 1 year taken out of the above estimate. If you think BSNL and MTNL already have 3G operations then you should be surprised that together they managed just 10000 subscribers.

broadband

500 million internet users are potentially coming from the large pool of 400 million mobile users which would be 700 million in 2012. India is betting high on mobile Internet more than anything else. But 100 million connected devices?

By connected devices it could be a smartphone or something similar lik e a netPC. 100 million smartphones in 3 years is not going to happen given the cost of these smartphones which make me think – are they really smart?.  And by connected device there will be netPC’s which will be deployed on a large scale. Airtel and BSNL are already doing it. The connectivity is by copper wires – which we all know suck. That is where the lookout of 3G and WiMax is so important.

Coming to 100 million broadband connections. The current broadband connections (greater than 256 kbps speed as defined by TRAI) is at 6.22 million. For it to jump to 100 million in 3 years is a tall order. I don’t think it is even possible. The goal of 100 million connected devices can be achieved in an ideal world but 100 million broadband connections in India by 2012 is a pipedream. The reasons are manifold.

Most of the connections are based on DSL and that again has to run on copper wires. If we look at the maze of wires running through our cities it would be a nightmare. Besides, there is really no incentive to retain the existing customers. Why bother when we have a monopoly?

Broadband space is widely dominated by BSNL and it only has copper wire network. Airtel is catching up but various cartel’s in various areas will not allow other broadband players. Airtel does not have the reach like BSNL. If Airtel doesn’t have the reach we are left with the clout of Reliance and Tata.

Reliance and Tata control most of the International bandwidth in India. Those 2 operators are busy deploying expensive wireless services rather than building the backbone in the form of broadband. Sure, Reliance has a great network across the country but how is it using it?

Tata Photon+ and Reliance Broadband+ are 2 expensive wireless broadband services promising speeds upto 3.1 MBps and download limit capped at 15 MB – under the garb of fair usage policy. More than the download limit the cost of the wireless device is stunning. It is at 3500 rupees and the data plans are not recession friendly.

The only decent broadband player in the circuit is Indian Railway’s Railtel which operates under the name of Railwire. Its plans and speeds are something to die for. But they only operate in few select areas of Bangalore. It works on a fiber optic backbone and promises very good speeds with good connectivity.

There was a initiative by the Railways to use its 30000 km strong fiber optic network and Sam Pitroda was heading a committee to make recommendations on how to commercialize the network. If these operations are used commercially then it would be a win-win for the broadband users and the Railways.

Wireless (3G & WiMAX) might look like an obvious choice to solve the broadband problems, but we need to have a reliable backbone.

What can India do differently to increase broadband penetration?

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PS : This is how life will be without broadband.

  1. Abhishek Gupta says

    india can do this.

  2. Arun says

    Sir u have not mentioned BSNL EVDO, its also wireless it claims 2.4 MBps where as i get around 1 MBps and its tariffs dedly cheap compared to the other two, only 650 Rs/month for unlimited data usage.

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