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India’s Broadband Economy: Vision 2010

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

March 2004

Confederation of Indian Industry


23, Institutional Area
Lodi Road
New Delhi 110 003, India
Tel: 91 11 2462 9994-7
Fax: 91 11 2462 6149/2463 3168

Please contact Sabyasachi Patra, email: sabyasachi.patra@ciionline.org for any


report related information.

© Confederation of Indian Industry, 2004

All rights reserved. No part of this report may be reproduced, either in part or in full,
without the express written consent of Confederation of Indian Industry.

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

FOREWORD

CII believes that digital infrastructure is as vital to the nation’s future growth, as
physical infrastructure is to its present prosperity. The absence of inexpensive non
dial-up options is already becoming a major stumbling block to the country’s growth.
Ubiquitous and cost effective public and private broadband networks are as important
today as voice based Telecom networks were in the previous decade. Internet based
services and connectivity for SOHOs / SME are crucial for enhanced productivity and
perhaps even survival.

Broadband networks, both wireline and wireless, provide an essential and integrated
communication highway that can deliver diverse types of data at a speed and quality
unattainable by current delivery mechanisms. They must be viewed, not as some
esoteric “technology”, but as an important vehicle to reach a new trajectory of
development. And this quantum leap need not cost the earth. Existing wireline and
wireless networks can be broadband enabled with only incremental investments by
industry, provided this is combined with suitable fiscal & regulatory regimes.

“India’s Broadband Economy: Vision 2010” is a path breaking effort to help develop a
vision and roadmap for the proliferation of a broadband economy in India. Ubiquitous
broadband services will accelerate economic growth and employment generation,
and can revolutionize the delivery of education, health and governance services. It is
one of the most exciting tools for enhancing the quality of life of our people.

This study is the outcome of a true public- private partnership between government,
regulators and industry. I would like to compliment the Committee and all those who
have contributed to this study for their effort and their ideas.

CII hopes that the recommendations of the Study will be implemented and that we
will see India emerge as a leader and role model in the field of broadband
deployment. It is my fervent hope that the India of 2010 will be a vibrant and truly
connected country in every sense of the word.

Anand Mahindra
President
Confederation of Indian Industry

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

INTRODUCTION

“India’s Broadband Economy: Vision 2010” is the culmination of an initiative of July 2002
through which Department of IT (DIT) and Department of Telecom (DOT), Ministry of
Communications & IT, Government of India and stakeholders from Industry, representing the
Broadband value chain, joined hands as CII National Broadband Economy Committee.

The Committee commissioned a holistic Study to help develop a Roadmap for the
development of the Broadband Ecosystem in India. IBM Business Consulting Services (BCS)
th
commenced the four-month Study on 15 September 2003.

A Steering Group comprising Departments of IT and Telecom and private sector stakeholders
including BG Broadband, Hindustan Lever Limited, Hughes Network Systems, HP, Intel, Sony
group, Turner International, Tata group and UTStarcom has guided the Study.

Working groups on Access Infrastructure and Technology, Demand and Service Provisioning,
Content and Applications, Regulatory and Policy Frameworks interacted closely with IBM
BCS during the course of the study. Subject matter experts, national and international, have
also been consulted.

Based on the Interim Report of the Study, a Discussion Paper was placed in the public
domain, inviting responses from interested parties.

This Report, which is in two volumes, has an Executive Brief and Chapters in Volume 1 and
Annexures in Volume 2. Chapter One scans international experiences and draws conclusions
for India. Chapter Two documents the findings of the first ever primary research that has been
carried out by IMRB as a part of the Study to estimate demand and price elasticity for
Broadband access, content and applications. Chapter Three examines the technology options
and possible business models. Chapter Four reviews deployment of content and applications
internationally, draws pointers for and documents the Indian scenario. Chapter Five dwells on
the enabling role of Broadband in public services. Chapter Six makes the case for Broadband
for Rural India. Chapter Seven visualizes the evolving industry structure. Chapter Eight is a
seminal attempt at modeling the economic benefits of Broadband for India.

The Committee is thankful for the partial Grant in Aid from Department of IT and sponsorship
by the Incumbent Telcos as well as other Key Stakeholders in Industry and is confident that
this Report will provide vital inputs to the Government in formulating and adopting a National
Broadband Policy.
CII stands committed to making a Broadband Economy a reality.

Sujit Kumar

Chairman
CII National Broadband Economy Committee
March 2004

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

ACKNOWLEDGEMENTS

The text of this report was prepared by a team from IBM Business Consulting Services led by
Arvind Mahajan, comprising Saravanan S, Sandeep Goyal, Biswanath Bhattacharya, Sheril
Vaidhyan and Dushyant Singh, and Sabyasachi Patra of CII.

The report has benefited from the input and comments of many people to whom we owe our
thanks. In particular, we would like to thank Mr K K Jaswal, Secretary, Government of India,
Department of IT; Mr V Vaish, former Secretary, Government of India, Department of
Telecom; Mr P S Saran, former Secretary, Government of India; Mr V P Sinha, CMD, Bharat
Sanchar Nigam Limited (BSNL); Mr R S P Sinha, CMD, Mahanagar Telephone Nigam Limited
(MTNL); Mr N K Mangla, Director, BSNL; Mr P Agrawala, Joint Secretary, Department of IT;
Mr H K Gupta, Deputy Director General, Department of Telecom; Mr. S N Gupta, Advisor,
Telecom Regulatory Authority of India.

We would like to express our appreciation of the valuable inputs received from the key
participants: P Shrikhande (Asianet), A Sethuraman (Alcatel), EVS Chakravarthy (B G
Broadband), Lav Gupta (BSNL), P Roach (Hughes Network Systemts) and P Banerjee
(Hughes Escorts Communications Limited), P Ravindranath (HP), N Dhawan (HP), P Mathur
(HP), K G Mohan (Hindustan Lever Limited), A Ghosh and J Bose (Intel), T R Wadhwa
(MTNL), B Bhatia (Motorola), R Singh and A Gupta (Microsoft), S Prasad (Sony India), N P
Singh and A Garg (Sony Entertainment Television), D Appaswamy and D Maheshwari (Sify),
A Misra (Turner International), N Srinath (VSNL), S R Addepalli (Tata Industries), R Godura
and N Manaktala (UTStarcom), P Prasad (Warburg Pincus), N Taraporewalla (Yahoo! India),
Ron Victor (Homeland Networks) and Rajneesh Bhandari.

We would also like to thank IMRB for the market research segment of the study and various
subject matter experts from IBM and other organisations without whose inputs a report of this
nature would have been impossible. As a token of our appreciation of their effort, we have
enclosed a complete list of the various people who have contributed to this report.

Special mention must be made of the unstinted support from Dilip Chenoy, Deputy Director
General, CII for, and since, the formation of CII National Broadband Economy Committee in
July 2002.

The views expressed in this report are those of CII National Broadband Economy Committee
and do not necessarily reflect the opinions of CII or its membership.

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

ASSOCIATE SPONSORS

Alcatel

Motorola

Microsoft

Sony India Pvt Ltd.

Sify

Yahoo! India Web Service Pvt Ltd.

Warburg Pincus Singapore LLC

SECTORAL ASSOCIATE

Asianet Communications Ltd.

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

INDIA’S BROADBAND ECONOMY: VISION 2010

EXECUTIVE BRIEF

This document covers the summary of the key findings and recommendations with respect to
the following core questions posed at the beginning of this study

• What is the proposed Broadband Vision for India?

• What is the need for such a Vision?

• What is the Roadmap to achieve this Vision?

The following exhibit presents the coverage of the study.

Exhibit 1: Coverage of the Study

Benefits of Broadband to India

India’s Broadband Vision

Targets and Milestones

Urban Rural Broadband


Broadband Broadband Services -
Access Access Rural / Urban

Prices, taxes Technology & Content &


and duties Cost Model applications

Technology Revenue Readiness


options / m odel assessm ent &
Business case Initiatives

Industry Village Conditional


Structure Segm ents & Access and
Evolution Funding model Copyright

Role of Industry & Governm ent

Next Steps

© Confederation of Indian Industry 1


India’s Broadband Economy: Vision 2010

I. INDIA’S BROADBAND VISION

Why Broadband for India? – The Benefits of Broadband

High-speed access to information and web based communication / transactions have become
a competitive differentiator. Internet based services (whether it is work or learning from
homes, schools, colleges) or connectivity for SOHOs / SME is crucial for enhanced
productivity and perhaps even survival. Absence of inexpensive non dial-up options is
becoming a major stumbling block for the country’s growth. Ubiquitous and cost effective
public and private Broadband networks are as important today as Telecom networks were in
the previous decade.

Broadband networks, both wireline and wireless, are best not seen as “technologies” but as
“non dial up, always-on, integrated communication highways delivering voice, data and video
along with interactivity at speeds necessary for delivery of different services at required
quality levels and in a manner that current delivery mechanisms do not enable.

Broadband connectivity and services, if designed appropriately and innovatively and


implemented effectively, can be a key driver for several socio-economic gains including:

• Economic growth and employment generation

• Education, health, governance and citizen empowerment required to achieve these


economic goals for all citizens including the rural population that cannot be covered
effectively using traditional brick and mortar solutions.

With reference to the Planning Commission’s Vision 2020 document, this report visualises
ubiquitous Broadband as playing a strategic role. Its economic impact is given in the exhibit
below. The quantification has been done for the period 2010 to 2020 and economic data is
provided as Present Value (in 2003 prices) of the estimated benefits for the period 2010 to
2020 (Chapter 8 on Economic Benefits of Broadband). Thus, during the period 2010 – 2020,
ubiquitous broadband is estimated to contribute to direct employment of 1.8 million, indirect
employment of 59 million and yield benefits with a present value of USD 90 billion.

Exhibit 2: Economic Impact of Broadband

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© Confederation of Indian Industry 2


India’s Broadband Economy: Vision 2010

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Proposed Vision

The proposed vision for India’s Broadband Economy is presented in the exhibit below.

Exhibit 3: India’s Broadband Economy Vision 2010

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Definition of Broadband

The CII National Broadband Economy Committee has adopted a dynamic and flexible
definition of broadband that is technology neutral and focused towards delivery of services to
the end user, rather than on speed. For the purpose of this initiative, Broadband has been
defined as “An always-on network capable of providing interactive voice, data and
video services on public networks”.

In terms of speed, there should be at least two tiers of service – the ‘true’ broadband being
capable of providing minimum asymmetric bandwidth of 1.5 Mbps and a ‘lite’ version capable
of providing 256 kbps. Within these ranges and including the variations possible with service
offering mix, it is expected that several tiers of broadband services will be made available to
different segments to meet the market requirements.

It should also be noted that by definition, broadband (triple play of voice, data and video on
the same network) requires the convergence of services for enabling its adoption and usage.
Further discussions on the need for this have been taken up in Chapter 1 on International
Experience and Chapter 7 on Industry Evolution.

© Confederation of Indian Industry 3


India’s Broadband Economy: Vision 2010

Targets and Milestones

In quantitative terms, the vision can be expressed as follows:

• To achieve a minimum of 10 million subscribers by 2010 and 35 million subscribers


by 2020 in urban India across homes, enterprises and public kiosks

• To achieve broadband coverage for at least 50% of the rural population by 2010 and
100% by 2020 through rural broadband kiosks
• To make appropriate and locally relevant e-education, e-health, e-governance,
entertainment and e-commerce services and employment opportunities available
through broadband connectivity to all cities, towns and villages in India

The total investments for achieving these milestones is summarised in the exhibit below.

Exhibit 4: Projected Investments

Investments required by Investments required


2006 (USD mn) by 2010 (USD mn)
Urban networks* 1100 2100

National / International bandwidth 150 500

National Content Delivery Networks 100 250

Rural Networks 250 500

Content and Applications 1000 2000

TOTAL 1600
2600 3350
5350

The Guiding Principles

The primary principles that have guided the formulation of the vision and the roadmap are as
follows:
• Ensure mass market usage of Broadband access and services (not just availability
but off-take)
• Eliminate Digital Divide – Access to broadband either at home or through public
kiosks within walking distance
• Enable viable / sustainable business models to promote private investments and
entrepreneurship and minimise the need for direct investments by Government
• Choice for the user, content / application provider, and service provider in a
potentially oligopolistic industry.

© Confederation of Indian Industry 4


India’s Broadband Economy: Vision 2010

II. BROADBAND IN URBAN INDIA

Demand – Urban residential users

In arriving at the specific targets for the urban residential markets, the price elasticity of
demand and supply side viability has been taken into consideration. Of the three scenarios
shown in the exhibit below, Scenario 2 has been taken for the purpose of target fixation since
it provides the maximum penetration while being a viable business model. (Refer to Chapter 2
on Demand for details on demand estimation).

Exhibit 5: Possible Demand Scenarios for Urban residential Market


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Demand – Commercial Users

The estimates of demand from the commercial user category i.e. large enterprises, SMEs,
SOHO / professionals and cyber cafes (i.e. the urban broadband kiosks) have been
presented in the table below. The projections have been prepared with access pricing at Rs.
3600 per month.

Exhibit 6: Demand Projections for Urban Commercial Market


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Summary of Demand

Based on the above projections, the demand targets for urban India are provided in the
following exhibit.

© Confederation of Indian Industry 5


India’s Broadband Economy: Vision 2010

Exhibit 7: Demand Targets for Urban Market

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Impact of Taxes and Duties

The key to achieving the above target is the pricing of the service for a residential subscriber
at an up-front fee of Rs. 5000, a monthly access pricing of Rs. 600 and a monthly rental of
Rs. 100 (for the balance cost of CPE). Payment for content and applications would be
additional. Based on the business case analysis (refer Chapter 3 on Technology and
Business Models), this package is viable on a medium to long-term perspective. However
these prices will be viable for the service providers only under the assumption of ZERO duties
and taxes for the broadband business.

Assuming that the broadband service provider passes on the additional costs on account of
the applicable duties and taxes to the customer, the effect on the prices is presented in the
exhibit below. To ensure mass-market penetration and a viable industry, Broadband industry
would require full waiver of all applicable duties and taxes for a period of at least 7 to 8 years.

Exhibit 8: Impact of Taxes& Duties on Prices


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Impact of National / International bandwidth costs

The prevailing Indian prices of international and national bandwidth are among the highest in
the world, at an effective Rs 160 to 180 (USD 3.5 to 4) per Kbps per month. The business

© Confederation of Indian Industry 6


India’s Broadband Economy: Vision 2010

case analysis has been done assuming an immediate reduction by 50% in International
bandwidth prices and a further reduction of 25% over the next 3-4 years. The national
rd
bandwidth has been assumed to drop to close to 1/3 of the current prices. However, if the
current high prices prevail and the difference in costs need to be passed on to the broadband
subscriber, the proposed low entry-level access pricing of Rs 600 would increase to Rs. 1950
per month (USD 42.5 p.m.) effectively placing broadband out of reach of the mass market. In
order to address this issue, some of the interventions that should be considered are
mandating cost based pricing of bandwidth, promotion of domestic internet exchange and
local hosting of content and promotion of creation of local language content.

Technology Options

The results of evaluation of the five categories of broadband technologies for the urban
market, viz. xDSL (on copper), HFC (on upgraded cable), Fiber (+ethernet), Wireless and
Satellite, are presented in the exhibit below.

Exhibit 9: Evaluation of Technology Options for Urban market


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© Confederation of Indian Industry 7


India’s Broadband Economy: Vision 2010

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Based on the above analysis, it appears that wireless broadband connectivity services are
likely to be used in rural networks where density of usage would be much lower or for
hotspots kind of niche locations and it is unlikely that true broadband connectivity to home on
wireless would be rolled out on a city-wide basis in a major way within the next 2-3 years. .
Satellite solutions may be used in remote / niche locations where other options are not
capable of providing connectivity solutions.

There are 40 million cable homes in India and cable / HFC based broadband technologies are
fairly mature and stable. From a cost and financial viability perspective as well (refer exhibit
below) cable displays a low cost and viable model similar to the DSL over existing copper
model. However without consolidation, professionalism and improvement in technological /
process management and customer care capability in the business, the cable industry is
unlikely to become truly broadband capable in the short term and the industry may take 3 to 4
years to achieve the same.

© Confederation of Indian Industry 8


India’s Broadband Economy: Vision 2010

Exhibit 10: Viability Assessment of Technology Options


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While DSL over fresh copper is clearly not a viable business model, DSL over existing
copper, HFC over upgraded cable and Fiber based options considered in the analysis prove
to be very close to each other in terms of business viability as can be seen from the
comparison of IRR, cash breakeven and cash payback period. However the assumptions
relating to revenue share (between the ILEC and the broadband service provider) have a
significant impact on the financials for DSL over existing copper and HFC over upgraded
cable. If for instance, the revenue share (currently assumed at 20% for the analysis) is
reduced to 15% for the last mile copper owner, the business viability for the broadband
service provider could improve significantly. In the case of DSL over existing copper
(hereafter also called the DSL case), it should be noted that if the service were provided by
the incumbent telco itself, the viability of the model would improve significantly since the 20%
revenue share would accrue to the incumbent in any case.

In the case of Fiber + ethernet model, although it appears to be very similar in terms of basic
viability vis-a-vis DSL model, this business model is inherently riskier than the DSL model, for
the following reasons:

• Higher capex per subscriber and higher initial fixed cost components in the capex

• Significantly higher capex per subscriber also means that initial investments for this
model would be over twice the investments required for DSL

• A full nationwide rollout of fiber to the curb / home in all 250 to 300 cities and towns
may require significant time given the need to physically connect up all the targeted
homes / commercial users, whereas the owners of existing wireline telephony
subscribers are capable of moving to DSL right away.

Infrastructure Investments Required

To achieve the targeted goals of cities covered and subscriber base an investment of USD
1.4 bn is required by 2006 and USD 2.8 bn by 2010(based on the DSL on existing copper
model). As can be seen in the exhibit below, the fibre-based model requires twice the
investment of the DSL over existing copper model.

© Confederation of Indian Industry 9


India’s Broadband Economy: Vision 2010

Exhibit 11: Investments required for Urban Broadband Infrastructure


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Options for Short-term rollout – DSL

In the case of DSL, roughly 95% of the existing copper is owned by the incumbent telcos
(BSNL / MTNL), who have three options for rolling out broadband services on this copper:

• Go alone by themselves: Given their dominance of existing copper and the


advantages of their business models, there are issues regarding whether they would
be focused in achieving the national broadband coverage and penetration targets
discussed in this report.

• A mandated Open Access regime with Local Loop Unbundling (LLUB) could be
imposed on the incumbents, that will throw open the existing copper to any new
player. If the scheme succeeds, this would lead to entry of a large number of players
for city / town level markets. Such a large influx of entrepreneurs at a micro-market
level will adversely affect their ability to generate adequate scale their operations at
the city / town level, thereby affecting the business viability of most of such entrants.
This option has not met much success internationally.

• Lastly, the two national telcos could opt for (on their own) or be mandated to provide
‘Managed Access’, that will allow the incumbents to share the existing copper with a
limited number of new service providers and also share the revenue generated, in a
pre-determined manner.

The last option appears to be the more practical option and is briefly discussed below.
Comparison of the above three options has also been presented subsequently.

Managed Access Model

There are three critical aspects of the Managed Access model:

• Any one city / town to have a limited number of players (two to four players based on
the market potential) who will be allowed to provide broadband services on
incumbents’ copper. Such service providers would be selected for their ability to

© Confederation of Indian Industry 10


India’s Broadband Economy: Vision 2010

create and run a viable and growing Broadband service at a high QoS and at the
targeted mass market price ranges. To the extent that the selection criteria will look
for prior track record to prove capability, even non-wireline telcos and internet service
providers may opt to provide such services on the incumbent copper. (Refer Chapter
7 on Industry Evolution for details / discussions of the issues involved).

• The national Telcos will provide shared access only for the data frequency range. But
once total convergence of services is in place, and VoIP solutions can be offered by
the service providers even through shared access, the retention of the voice stream
business by the incumbent will be of less significance.

• The Service Providers would pay a percentage share of their revenues (both
revenues from access and content) to the national Telcos who have provided them
access. This revenue share could be pre-determined and would not be based on cost
sharing principles.

Optional Regulatory Regimes for the Short term Urban Access Industry

The Regulator may opt for one of three different models to promote competition. The exhibit
below gives the pros and cons of all three options.

Exhibit 12: Comparison of Regulatory Regimes for Last Mile Access in Urban markets
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© Confederation of Indian Industry 11


India’s Broadband Economy: Vision 2010

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Review of international cases has shown that full open access with LLUB has not succeeded
and may not be suitable in the medium and long term. On the other hand, depending on
facilities based competition for achieving the coverage and penetration targets in the short
and medium term may be a risky option, since under this model, there would be only two
national telcos (on DSL) and one or two Fiber based national players.

Therefore it is recommended that India needs to look at Managed Access option for DSL in
order to achieve the quick growth required, while simultaneously promoting inter-modal
competition over the longer term to bring in newer technologies.

Other Critical Gaps in Industry Readiness

One critical capability gap in the Indian broadband value chain is related to Content Delivery
Network, Application and Content aggregation and Digital Media factory (i.e. content creation
and content management). In the absence of existing equivalent infrastructure, the gap is
significant in terms of the investment (approximately 25 to 30% of the projected broadband
infrastructure investment) required for this. It is also critical to attend to gaps on the skills /

© Confederation of Indian Industry 12


India’s Broadband Economy: Vision 2010

human capital side in the technical and management aspects of the business. These skills
require to be inducted into the country over the next one to two years if local content services
are to be made available to the subscribers.

Till the time locally hosted content becomes significant, there will be a need for high
international bandwidth to enable the subscribers to access content that is hosted overseas.
The investment needed in national and international bandwidth range between 10 to 15% of
the total capex. However this assumes that existing dark fiber that is already in place may be
lighted for this purpose. Otherwise, the cost estimates can be higher.

In this context, strategies that include domestic storage for local hosting, mirroring and
caching of popular international content, and development of local content will be important
for reducing the requirement of expensive international bandwidth.

There are a also number of back office and support systems including user services such as
e-billing and payments, authentication / verification services, electronic cash, micro-payment
systems, etc. that are required to be put in place. Similarly, the existing OSS / BSS systems
need to be upgraded to allow for a multiplicity of tracking, billing, payment mechanisms (as
may be required by a variety of content and application service providers) as well as the
complex interconnection related settlement requirements in a broadband network.

Recommendations for Long Term Development of the Urban Access Industry

While in the short term, given the need to quickly roll out broadband services in the country
and create a customer base, it may be necessary to focus on leveraging existing copper, in
the long term (beyond 2010), India needs to look at creating communication infrastructure that
is able to leapfrog to newer technologies.

From a long-term perspective, therefore, India needs to promote multiple technologies and
inter-modal competition from DSL, HFC, fiber, wireless and satellite technologies, as and
when they become relevant and cost effective. To this purpose, the Government / Regulator
needs to:

• Promote consolidation, professionalisation and upgradation of network / technological


capability of the cable industry through determined and focused regulatory
interventions to make the industry Broadband capable

• Open up relevant bandwidth in the wireless spectrum (2 to 6 GHz range) to enable


City wide and Hot spot wireless Broadband solutions to be rolled out

• Simplify and speed up the processes and reduce the costs involved in providing Right
of Way (ROW) to Fibre and HFC based service providers (through promotion of
innovative mechanisms such as the “ROW for Bandwidth” barter schemes in
Karnataka, etc.)

• Promote local R&D and manufacture of new Broadband technologies / solutions

© Confederation of Indian Industry 13


India’s Broadband Economy: Vision 2010

III. BROADBAND IN RURAL INDIA

The Indian Rural Market

The Indian rural market segmented by the size of the village, i.e. population of the village, is
presented in the exhibit below

Exhibit 13: Segmentation of Rural India


( % * & ( * ( * ( *
% + # * A A 0
7 # 0 , # * H # %
7 ! ( # #% %- +- # #- 4 %%4
% J( ,& % 2 +& -# -4 (,4
# J% #%% #&( %+, % 2 & 4 &24
! # #& #&- #+% ,% # 4 # 4
& '3 5995: ! ! ! " . ( ; :; ; ; ! (;;5

Demand Projections

To achieve the target of 50% population coverage by 2010 and 100% of the population
coverage by 2020, the specific targets in terms of rural broadband kiosks and the rural
coverage is provided in the following exhibit.

Exhibit 14: Targets for Broadband in Rural India


3
!
/ > D # 3 ,% 3
! % # 4
/ : !
-4 # 4

Business Model

The rural broadband business model (detailed in Chapter 6 on Rural Broadband) would
consist of the following partners:

• The agri-commodity corporates, who stand to gain from savings on procurement and
hence would be willing to invest in the broadband network as part of their supply
chain process.

• The local entrepreneur, who becomes the agent / franchisee kiosk operator, creates
the market for the kiosk and acts as the system operator for villagers

• The rural broadband solution provider, who will construct and operate the network
and allied services for a fee

© Confederation of Indian Industry 14


India’s Broadband Economy: Vision 2010

• The State and Central Government and their agencies, who would need to act as
anchor tenants using the communication facilities, provide e-governance services and
proactively assist / promote network development in the villages

• The banks, which would need to provide low cost financing to the rural kiosk operator
under any of the various policies for promotion of self employment and
entrepreneurship among the rural educated unemployed youth

• The Central Government and the USO fund, which will provide direct subsidy /
funding for very small villages with population less than 1000 or for very remote
villages.

Financial Model

At the core of any rural broadband / connectivity model in India is the Kiosk as an aggregator
of demand and a central infrastructure for the entire village. This is the only proven system by
which the rural population will be able to take advantage of broadband or any form of
connectivity services on a cost-effective basis.

On the revenue model side, there are two key aspects that require to be taken note of for
ensuring a viable business model

• Any rural broadband network must have a revenue model, based on e-commerce in
agro-commodities. This is the single largest revenue stream accounting for anywhere
between 50 to 60% of the total potential revenues for the service provider and the
kiosk operator

• The rural Broadband network must necessarily be designed to capture all possible
revenue streams. Triple play and convergence are a basic necessity for survival in
the rural market

On the cost side, capital expenditure is a critical component affecting the viability. A key point
to be understood is the high proportion of non-connectivity related assets in the capital cost
structure, e.g. kiosk equipment, back end support infrastructure, NOC, etc. The viable capex
limit on a per kiosk basis should not exceed Rs. 250,000 (USD 5500) for villages with
population of 2000 to 5000. For villages with smaller population sizes between 2000 and
1000, this capex limit may need to be lower, i.e. closer to Rs. 100,000 (USD 2200). It may not
be possible to reduce the capital cost below this given the minimum cost of provisioning the
kiosk, network and NOC. Therefore villages with population of less than 1000 may not be able
to support a sustainable broadband kiosk.

Such small villages could combine with other nearby villages of similar or larger size so that
the cluster has one broadband kiosk that may be based in any one village, but supports the
needs of all villages in the cluster. Villages that are both too small and are unable to cluster
with others would require mandatory Government / NGO funding for capital cost, and possibly
even running costs, to operate a broadband kiosk.

© Confederation of Indian Industry 15


India’s Broadband Economy: Vision 2010

Business Models and Funding options

As can be seen in the exhibit below, almost 74% of the rural population could be covered
through broadband kiosk networks that are driven by industry capital.

Exhibit 15: Funding options for Rural Broadband Coverage


( % ( * ( * % 0 0
% + A & % *
* 7 #
# M( # #- 4 = 0 A @
% % J( -# -4 0 A @
2 # J% % 2 & 4 / ) 0 A @
$
N # ,# # 4 / ) $ 0

!! " 1 < <= - 2

Impact of Duties and Taxes

Even after the recent reduction in duties, the remaining effective duties impact capital
expenditure by 20 to 25%, thereby making the village kiosks unviable for a large proportion of
the rural population. Similarly taxes (such as entertainment tax, service tax) also affect the
total operating costs to the extent of over 35 to 40% of normal revenues. Again this distorts
the sustainability and breakeven points for the rural markets that could otherwise be served
by corporates. It is therefore recommended that the Government should waive all duties and
taxes for all rural broadband investments and thereby promote investments by corporates.

IV. BROADBAND SERVICES – CONTENT / APPLICATIONS

Content & Applications

The digital content that can be delivered through broadband covers a wide range of
applications including:

• Societal Applications

o E-Education

o E-Health / Telemedicine

o E-Governance

• Commercial Applications

o Entertainment on demand

o E-Commerce, Tele working

o Business applications / data store on demand

© Confederation of Indian Industry 16


India’s Broadband Economy: Vision 2010

Readiness Assessment and Initiatives

e-Education

Providing equitable and affordable access to ICT resources would be the key to meeting the
educational needs of India and broadband can play a significant role in enabling the potential
of distance education / e-learning. Introducing high-speed broadband access in schools and
other educational institutions is one of the easiest and fastest ways to address the
educational requirements.

The detailed review and recommendations for promotion of e-education on the broadband
network has been taken up in the relevant section in Chapter 5 on Broadband in Public
Services. The critical recommendations are summarised below for reference:

• Setting up of a Central Nodal e-Education agency that would coordinate and ensure
coherence of all the initiatives and programs taken up for e-education

o This agency would be specially responsible for finalising the e-education


content standards for India

o They would design and execute programs for content creation and
aggregation / dissemination, training of faculty in ICT and in use of e-
education content and monitor and manage all programs undertaken in this
area

o They would play a critical role in providing certification of e-educational


content to the target population in collaboration with the various Institutions /
Academic Boards so as to align such content to the educational system and
to create a demand for such content

• It is estimated that creation and maintenance of e-education content and applications


would involve initial investment of around USD 550 to 650 million (i.e. Rs. 25-30
billion) and annual ongoing investment of USD 110-150 million (i.e. Rs. 5-7 billion) for
updation / maintenance / upgradation of content.

o Although the Private / NGO sector may play some role in creating content for
the commercially viable segments and even some select niche users, much
of the e-education content related investments (such as vernacular content,
primary / vocational school related content) may not be commercially viable.
The Government has a critical role here with regard to direct investment,
design of certified e-education materials, etc

• The Government needs to train the existing faculty, employed in the Government
owned / operated schools and educational institutes, in the use of ICT and e-
education tools / content. While technical / financial assistance for dissemination of
such training may be undertaken by industry, NGOs and external aid agencies, the
delivery of the training and effective use of the same by the faculty is the
responsibility of the Government.

© Confederation of Indian Industry 17


India’s Broadband Economy: Vision 2010

e-Health

The key steps that need to be taken on a public–private platform to enable the full fruition of
the broadband aided tele-medicine promise in India have been detailed in Chapter 5 on
Broadband in Public services and are summarised below:

• Chart a national e-health strategy and roadmap

• Link up all Government health establishments to public broadband networks as they


are rolled out

• Promote investment from all private sector participants in the medical / health value
chain

• Put in place a viable commercial model involving all beneficiaries including insurance
businesses, pharmaceutical industries, etc. for tele-medicine solutions

• Develop standards and put in place mechanisms for resolution of all medico-legal
issues

• Promote awareness and acceptance through media campaigns of successful pilot


programs

e-Governance

Broadband networks can not only enable faster and wider rollout of e-governance services,
but also allow enhanced delivery of services to citizens through use of complex applications
that would not have been possible in the narrowband environment. A key benefit for the
Government would be that a large part of the resources that are currently being spent or
planned to be spent for providing connectivity for delivery of e-governance services would no
longer be required. The planned e-governance services can be delivered using the public
broadband network and the resources thus freed up can be made available for alternate
developmental needs of the country. While a detailed review of the need for e-governance
and the issues involved in effectively providing it through a broadband network can be found
in Chapter 5 on Broadband in Public Services, the key findings have been summarised below:

• The starting point of a public e-governance system should be the computerisation of


all relevant operations within the Government so as to provide a seamless online
experience to citizens once the operations are e-enabled. This will require that all
Central and State Governments need to put together a comprehensive plan for:

o Re-engineering of internal Government processes and the interface points of


these processes with the public

o Implementing systems for automation and IT enabling of the re-engineered


processes

o E-enabling the applications and content so that the public may be able to
access them and commence transactions at kiosks

© Confederation of Indian Industry 18


India’s Broadband Economy: Vision 2010

o Replicating best processes / policies across the country at all locations

o Training of Government personnel at all levels on ICT usage and how they
can use e-governance tools and content

• Given the high level of illiteracy in India, there is a need to maintain video – audio
services that do not require the user to interact with only text based content /
applications.

• Encourage public – private participation in funding of such initiatives including user


payments helping in funding the initiative (e.g. Bhoomi).

• Maintain a portfolio of potential funding agencies / sources and ensure that they are
periodically tapped for fresh funds as required.

• Set up an e-Governance policy for security and privacy protection and ensure
implementation in the e-Governance system.

• Where ever possible, leverage the State Government / their agencies to enable local
language translation of content so that all users can benefit from the provision of e-
governance

Entertainment on demand

The role of Entertainment on demand as a ‘driver’ in helping achieve the Broadband Vision
and goals has been discussed in Chapter 4 on Content and Applications. The key issues that
emerge are as follows:

• There are no consistent global trends in specific types of content and services in the
form of a killer application in the broadband space. But generally, broadband
generates higher usage and revenues from multimedia and video-audio services and
online shopping / e-shopping. Specific usage would depend on availability of content,
bandwidth available for use, charges, etc.

• The study of international trends indicates that content needs to meet the four
parameters of differentiation, interactivity, quality and variety

o Existing content that is being used in other traditional media may be re-
purposed and used in the initial period providing some degree of choice,
limited interactivity and improved (digital) quality.

o However beyond the first 12 to 18 months, availability of local language and


locally developed broadband specific content will become an imperative.

o Even the existing traditional media content, will need to be re-purposed and
significantly improved in terms of quality of delivery to make an impact

o Lastly, usage of content would depend to a large extent on the bandwidth


availability and QoS on various parameters to ensure customer demand for
content. There is a need to ensure that the Broadband Industry gets together

© Confederation of Indian Industry 19


India’s Broadband Economy: Vision 2010

to set standards on this through mutual agreement between the access and
backhaul / CDN players and the content creator / aggregators.

• There are several gaps in the content value chain. The primary areas of concern
include non-movie / music content creators, digital factories (to prepare content for
use on broadband type of delivery systems) and content aggregators. From a
perspective of all investment, new business formation and technical and management
skills, there is a need to upgrade the capability of the Industry within the next 2-3
years.

• The entire CDN capability needs to be put in place at the national and the city level
involving significant investment and development of human capital.

• The proprietary nature of systems in the broadcasting industry traditionally has had
an impact on the broadband space entertainment CPEs. Although the Industry is now
moving towards developing a set of common standards to ensure interoperability
across content stores, central office equipment and CPE, this is expected to take 2 to
3 years. India needs to ensure that global standards are adopted by the Indian
content / CDN / CPE players and the standards are implemented as early as possible
once they are developed.

o Given the above two points viz. the gap in CDN capabilities, the investment
involved and the lack of common standards in the content creation and
delivery systems, it is worth considering, whether India should try to promote
a small group of interoperable CDN players and their systems / infrastructure
during the initial years of broadband rollout, so that customer mobility and
CPE interoperability is made possible.

o Also in the light of this, it is proposed that the CPE be provided on a rental
rather than on ownership basis to the subscribers by the service providers so
that it is possible to allow a financial basis for customer mobility and choice,
during the period till such mobility, choice and interoperability is made
possible through technological means.

It is relevant to highlight here that the last few points mentioned above apply not only to
entertainment, but would also affect any multimedia educational / commerce / health /
governance related content as well.

Application services

Primarily three applications services are expected to generate demand over broadband. They
are:

• Online retail

• Online finance

• Video conferencing

© Confederation of Indian Industry 20


India’s Broadband Economy: Vision 2010

While most of these services are available in India in narrowband formats, there exist
significant issues or gaps in generating high demand and usage for them. In the case of
online retailing, the key issues include:

• In a broadband environment, online retailers will need to integrate merchandising and


marketing by introducing advanced website tools that take advantage of high-speed
connectivity and assist product buyers in comparing and selecting products, for
instance, through live video chats with customer service representatives. However, as
several online retailers in India are yet to break even and are short of investible funds,
it is unlikely that they will make the investments necessary for broadband upgrades to
their sites in the next 1-2 years

• Online payment systems through payment gateways linked to user bank accounts are
not established yet, and many users are apprehensive of using their credit cards
online due to fears around security and misuse.

• The unorganised and fragmented structure of the retailing industry in India also acts
as a barrier to online retailing – since unsophisticated customers of low cost
unorganised retail shops are unlikely to demand the variety, choice and convenience
that departmental stores customers do, which prompt them to value e-tailing as an
option.

• There exist barriers also to increased penetration of online financial services in India.

• Low connectivity prevents introduction of bandwidth-intensive product


demonstrations. Poor connectivity also creates uncertainty in the mind of customers,
as there is the fear of transaction failures due to timeouts.

• Online banking websites are not integrated with the CRM and other systems of the
bank; banks do not therefore get a unified view of their customers. However, Internet
banking helps banks in reducing their transaction processing costs.

• There are no inter-bank payment gateways – this prevents seamless transfer of funds
and is a barrier to growth in online transactions.

• A key barrier to growth of online stock trading in India has been the absence of a fail-
safe method to close a transaction when the connection fails.

Conditional Access and Copyright Protection

The lack of an effective and enforceable regulatory framework for protection of copyright
conditional access is a critical inhibitor to the creation / provisioning / distribution of all forms
of content and application services on the broadband network. It is therefore necessary that
India should create a framework in the immediate term that addresses protection of digital
content and copyright and limits or prohibits the use of circumvention tools for copying of
copyrighted digital content.

© Confederation of Indian Industry 21


India’s Broadband Economy: Vision 2010

V. KEY RECOMMENDATIONS FOR THE INDUSTRY

The following exhibits provide the summary of the key recommendations and action points for
the Industry.

Exhibit 16: Key recommendations for the Industry

Key Recommendations for the Industry

Demand Stimulation
Keep access prices between Rs. 450 to 600 ($ 10-13) for ensuring mass market
penetration and subscriber offtake / usage
Provide range of services / content including entertainment, education, health, community
participation, tele-working, etc. differentiated and tiered bouquets to maximize revenues
Provide Value-added content and services as early as possible
Strengthen revenue models
Multi-segment focus and multi-tiered solutions for different price ranges to maximise value
capture from the market
Adopt / promote Kiosk / community solutions for rural, urban lower classes and small town
populations
Rural solutions have to be linked to participation in village economy / agri-commodity trade
and commerce starting at the farmer’s gate
Manage costs effectively
Keep capital costs low through scaling either individually or through procurement pooling
and other alliances among industry members to gain economies of scale
Lower operating costs through outsourcing and sharing of resources with alliance partners

Key Recommendations for the Industry


Access side
Support convergence of services at the earliest regardless of physical layer or prior
classification of industry
Support and assist early implementation of an effective Managed Access policy that allows
for rapid capital formation and rollout of services to the market
Move towards alliances / partnerships that leverage existing capabilities and assets while
bridging gaps in own capabilities using alliance partner’s capabilities / resources. Work out
financial / risk sharing arrangements among alliance / partnerships that support merger of
interests rather than create conflict of interests.
Incumbents should consider innovative structuring options to achieve quick rollout without
necessarily losing control
Invest in human capital creation / skills development in existing areas of gaps (CDN,
billing,payment, content aggregation, OSS/BSS) for broadband space
Cable industry should initiate a range of programs to create a consolidated, technology
savvy, customer oriented industry that is broadband capable
Work out specific spectrum requirements with the government and work out a way for
sharing of spectrum among players
For rural broadband, Industry and associations need to come together and foster the
investor-operator alliances / arrangements that will ensure true broadband rural initiatives

© Confederation of Indian Industry 22


India’s Broadband Economy: Vision 2010

Exhibit 17: Key Recommendations for the Industry

Key Recommendations for the Industry


Content side
Industry should jointly set up ‘Experience Centers’ to study broadband usage
behaviour and test market content / applications; results can be made available to
participating members
Participate through investments in developmental content creation such as
education, health etc.
Re-purposing of existing content to meet broadband needs must ensure conversion
of existing content to high digital quality levels
By medium term, significant investment and effort to create broadband oriented and
broadband specific content
Create an industry association to track and adopt global trends in content standards
to ensure alignment
Consumer Protection / Support systems
Industry members across the value chain need to come together and develop a set
of QoS based agreements that ensure quality of experience for the user
Access / CDN industry and the financing industry need to come together to put
together viable financing schemes to enable availability of rental / EMI options for
CPEs to the retail subscriber

Key Recommendations for the Industry

Backhaul / NLD / ILD / IP transport


Promote local hosting of internet content - first for locally owned internet sites and
also for high traffic international site’s local replica
Invest in creation of international bandwidth to support the expected growth of
usage of international content with rollout of broadband
Promote / develop IDCs, ASPs and other online service facilities to enable users to
benefit from the rapid access to the internet

© Confederation of Indian Industry 23


India’s Broadband Economy: Vision 2010

VI. ROLE OF THE GOVERNMENT / REGULATOR

The following exhibits summarise the key action points for the Government and the Regulator.

Exhibit 18: Role of the Government / Regulator

Regulatory measures

Progressive reduction upto 75% of prevailing prices of international / domestic


bandwidth prices by 2006
Mandate interconnection for all broadband services (on any media / technology
platform) with the national backbone
Enable regulation for managed open access on incumbent copper network;
Release of unlicensed and licensed spectrum in the 2.5 GHz, 3.5 GHz and 5 GHz range
at low costs
Promote state level agreements for free Right Of Way in exchange for free bandwidth
for government requirements
Mandate standards for cable networks to make them Broadband capable
Mandate and enforce QoS standards for broadband service providers for each tier /
type of broadband service; Regulator to conduct periodic audits, publish results and
penalise violators
Bring in Digital Copyright and Conditional Access Protection / Enforcement Law based
on proactive prevention (along the lines of the EU Digital Copyright Directive 2001)
Extend cyber laws on privacy and fraud to cover all media for broadband services

Industry structuring measures

Determine timing for full convergence of services, i.e. allowing triple play regardless of
technology / underlying media
Allow for sharing, leasing, trading, sale and transfer of licenses, spectrum, bandwidth
and other assets/ resources among all industry players
Ensure adoption of global standards in technology / services so as to ensure
interoperability and standardisation
Extend FDI limits to all parts of the broadband industry value chain to attract overseas
investments
Explore options for establishment of national level repositories to kickstart the content
aggregation
Establish mechanisms for secure micro payments

© Confederation of Indian Industry 24


India’s Broadband Economy: Vision 2010

Exhibit 19: Role of the Government / Regulator

Fiscal Measures

All broadband infrastructure / service providers, regardless of underlying technology or


media, to be provided with a 10 year income tax waiver (as provided for the IT companies)
Exempt CO equipment and CPEs (including STBs and PCs) from all customs and excise
duties including countervailing duties, special duties and Sales Tax
Exempt broadband services for the next 10 years from payment of Service tax
Tax exempt broadband allowance for users, the same being tax deductible for paying
organisations
Treat investments in Broadband Experience Centers as R&D expenses - i.e. Tax free
status
Digital content (education, health, governance, local language, web content, interactive
entertainment) to be accorded soft infrastructure status with enabling incentives and
interventions
Provide Educated Unemployed youth who wish to set up BB Kiosks with easy financing
options / support from the various self employment / entrepreneurship development funds
available

Rural

Full Triple Play to be allowed on all Rural broadband services


Deregulate rural broadband service players from licensing requirements. Mandate only
registration requirements
Subject to ensuring auditable open and transparent price discovery by the farmers
Remove all restrictions on direct corporate e-procurement of agriculture
commodities from the farmers through appropriate modification of the APMC
Provide exemption from Mandi Tax for all direct corporate e-procurement from
farmers
Promote educated unemployed rural youth to set up rural Broadband kiosks by providing
them matching funds from the USO funds and by assuring all authorised Rural Kiosk
operators low / nil (<2%) interest bank financing for setting up broadband kiosk facilities
Provide matching funds from the USO funds for all Rural Broadband Networks
connecting small (population below 2000) and / or remote villages
Mandate full screen video capable broadband connectivity to all schools and government
PHCs in the village from the kiosk within 5 years of setting up of the kiosk for all rural
broadband network providers / kiosk operators who use USO funding.

© Confederation of Indian Industry 25


India’s Broadband Economy: Vision 2010

Exhibit 20: Role of the Government / Regulator

Public Services

Create Certification program for e-Education courses / content


Firm up standards, systems and processes to certify e-educational content
creators / service providers and provide means for affiliation with relevant state /
central boards and the UGC
Develop time bound action plan for incorporating ICT in school level teaching
curriculum and methodology
Review of the medico-legal laws to incorporate impact of e-Health and Tele-
medicine
Central / State governments and their agencies to stop all direct funding /
investments in communication infrastructure for implementation of their individual
programs and instead promote adoption / use of public / private networks where
ever available and act as anchor tenants.
Detailed e-Governance and e-Health plans and their annual review to be made
available in public domain
PC proliferation strategies- Government guaranteed high volume based low price
PC procurement (like Thailand)

VII. ROADMAP & RESPONSIBILITIES

The definition of Broadband is stated as below:

“An always-on network capable of providing interactive voice, data and video services
on public networks”

In terms of speed, there should be at least two tiers of service – the ‘true’ broadband being
capable of providing minimum asymmetric bandwidth of 1.5 Mbps and a ‘lite’ version capable
of providing 256 kbps.

To achieve the under mentioned Broadband deployment and uptake objectives,

(i) 3 mn subscribers by 2006 and 10 mn subscribers / 1-1.5 m kiosks by 2010 in


urban India (figures exclude narrow and wide band access at speeds below 256
kbps),

(ii) 100,000 kiosks covering 50 % of rural India by 2010, (with coverage at speeds
below 256kbps, 100% coverage is expected)

(iii) Threshold access pricing of Rs. 450-600 for mass adoption by residential and
access pricing of Rs. 3600 for the commercial segment,

© Confederation of Indian Industry 26


India’s Broadband Economy: Vision 2010

the following Roadmap needs to be adopted and implemented.

CLOSURE IN FISCAL 2004-05

• Adoption of a National Broadband Policy by the Government (Ministry of


Communications & Information Technology)

• Formalisation of Fiscal Support, mainly: (Ministry of Communications & Information


Technology, Ministry of Finance)

(i) Immediate Infrastructure Status and waiver of Corporate Income Tax for 10
years for Broadband Infrastructure and Service Providers

(ii) Immediate waiver of Custom & Excise duties and Service Tax

(iii) Introduction of tax free Broadband Allowance for users (equivalent to the
threshold access pricing, i.e., around Rs. 6000 p.a.), and making the same
tax deductible for paying organisations till 2006-07

• Additional interventions necessary for growing the PC base exponentially by 2006


including Government guaranteed high volume low price procurement system for the
public which could enable users, both individual and enterprise, to buy upwards of
perhaps 20-30m PCs over the next 2-3 years at an aggregate level (instead of the
normal 3-4m per annum). (Ministry of Communications & Information Technology;
Ministry of Finance)

• Suitable amendments to the Copyright Act including an evaluation and adoption of


technology based proactive protection measures (Ministry of Human Resource
Development; Ministry of Communications & Information Technology; Ministry of
Information & Broadcasting; taskforce comprising CII National Broadband Economy
Committee, select legal experts, relevant Government departments and other
Industry bodies)

• Early implementation of Incumbent Telecom Operator’s plans for National Internet


Backbone Phase-II, Core Network, and deployment of upto 1m DSL lines
(Department of Telecommunications, Bharat Sanchar Nigam Limited, Mahanagar
Telephone Nigam Limited)

• The Industry should progressively bring down international and domestic bandwidth
prices by about 75% of current levels by 2006 and introduce the concept of wholesale
& retail pricing of domestic bandwidth

• TRAI, in consultation with the industry to (i) study and formulate the details of a
Managed Access Policy on Incumbent Telecom Operator; (ii) set down Quality of
Standards and definitions of service for broadband services; (iii) mandate

© Confederation of Indian Industry 27


India’s Broadband Economy: Vision 2010

interconnection wherever required, (iv) lay down bandwidth pricing benchmarks /


ceilings to enable viable broadband services at threshold access price levels (v)
enable domestic peering among all ISPs and examine issues associated with
inadequate / partial use of NIXI.

• Industry should create at least one National Content Delivery Network which would
enable multiple operators / service providers to provide complete suite of Broadband
services quickly along with benefits of scale and standards.

• A joint Government - Industry - Educational Institutions study for deployment of ICT in


education with special emphasis on Government schools - physical infrastructure,
Information Technology & communications infrastructure, teaching resources etc
(Department of Information Technology, Ministry of Human Resource Development,
CII National Broadband Economy Committee)

• A joint Government-Industry study for development of Digital Content (education,


health, governance, language web content and original interactive entertainment) &
Applications (DIT, MHRD, Ministry of Health, CII National Broadband Economy
Committee) and catalysing implementation of online “driver” services like public
utilities, acceptance of digitally signed invoices for audit, entrance tests etc which will
promote mass use of Broadband. The “soft infrastructure” status of digital content and
application and policy implication thereof will flow from the study.

• A joint Government –Industry study for modification of existing legal frameworks and
development of necessary enabling legislations for a robust Broadband economy
(Ministry of Communications & Information Technology, Law Ministry, Telecom
Regulatory Authority of India, CII National Broadband Economy Committee, other
relevant bodies).

• A study to chart out a roadmap for utilisation of domestic data centres, deployment of
international and domestic content and reduction in the use of international bandwidth
(CII National Broadband Economy Committee, TRAI).

• A collaborative industry initiative should be taken up to promote broadband to the


public through familiarisation and experience sessions at demo kiosks open to the
public and through generic promotion (CII National Broadband Economy Committee,
other relevant bodies)

• A joint Government - Industry work group should study and propose spectrum release
for urban and rural wireless rollouts and satellite usage policies including bandwidth
cost lowering, competition enhancing “open skies” policy (Department of
Telecommunications, Telecom Regulatory Authority of India, other relevant bodies)

• Adoption of policies for rural broadband: (i) registration instead of licensing, (ii)
convergent services, (iii) others (Ministry of Communications & Information
Technology, Telecom Regulatory Authority of India)

© Confederation of Indian Industry 28


India’s Broadband Economy: Vision 2010

• Policy on use by Government Departments, after 2006-07, of only public/private


Broadband networks for their communication needs wherever possible instead of
creating captive networks for their limited use, thereby making Government an anchor
tenant of public/private Broadband networks. (Ministry of Communications &
Information Technology)

CLOSURE IN FISCAL 2005-06

• TRAI, in consultation with the Industry, should implement a plan for the consolidation,
professionalisation and upgradation of technology infrastructure, business processes
and human resources of the cable industry to make it Broadband capable

• Industry association should lead an initiative to form alliances between corporates


and the rural broadband solution providers to kick start rural broadband initiatives (CII
National Broadband Economy Committee, Ministry of Communications & Information
Technology)

• A joint Government - Industry initiative should form a standards body for Content
Delivery Network (CDN), IP content and Broadband TV streaming for interoperability.

• Industry body to set up pilot ‘experience’ centres / ‘test beds’ to study the user, usage
behaviour and test interest / demand for content and applications

• A Government initiative should put in place specific approval for funding / easy
financing of unemployed youth who wish to set up and operate urban / rural kiosks for
broadband.

• A joint Government – Industry review of APMC and other regulatory restrictions on


direct- at-the-farmgate agro-commerce and should come up with ways to promote
direct e-commerce between farmers and corporates using broadband networks
including scrapping of unnecessary taxes applicable on agri-commerce outside the
RMC network.

• A Government sponsored study along with select medical professionals and private
hospitals should carry out a detailed study to roll out Telemedicine services on
broadband, including setting up a pilot operation to study commercial viability of the
operation

• A joint Government - Private sector - Educational Institutions body to be set up for


implementing recommendations of the above mentioned study on deployment of ICT
in education, including operating a pilot study to test various methods and options
that may be identified during the study itself.

© Confederation of Indian Industry 29


India’s Broadband Economy: Vision 2010

Contributors

This report would not have been possible without the invaluable contribution of the following.
We thank them for sharing their perspectives and experiences with us.

Working Group Member


Bharti Broadband

Kailash Choudhari Parag Kasture


Aksh Broadband CISCO

Rajesh Madan Arvind Kumar


Alcatel Department of IT

Rajesh Narang B S Bedi


Alcatel Department of IT

Dr. Geetha Dr Govind


Anna University Department of IT

P Rambabu Dr J S Sehra
Asian Paints
Department of IT
Vivekanad Heble
K B Narayanan
Aventis Pharma
Department of IT
Gautam Thakar
Tushar Sighat
Baazee.Com
D-Link
Talnekar
Jayant Kumar
Bajaj Auto
Department of Telecom
Rajesh Pavitran
Shantanu Prakash
Balaji Telefilms
Educomp Datamatics Limited
Ashok Juneja
Gulshan Rai
Bharti
ERNET
S K Dattar
R S Krishna
Bombay Dyeing
Galileo India Limited.
Anil Kaushik
Dr. Pradeep Chowbey
BPCL
Ganga Ram Hospital
Ravindran
Sridhar
Broadband Pacenet Ltd.
Gems & Jewellery Export Promotion
Council (GJEPC)
Arvind Chawla
BSNL S Suresh
Glaxo SKB

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

Kanti Haria Jas Gulati


Haria Exports Microsoft Corporation (India) Pvt Limited

Neeraj Bhatia Major Vijay Kapur


Hathway Microsoft Corporation (India) Pvt Limited

Rajeev Tandon Chandramohan Pupala


Hero Honda Mid Day Multimedia

Aneesh Chaudhary Jayant Sharma


Hindustan Lever Limited Milestone Interactive

Avijeet Mukherjee Vivek Bharadwaj


HP Ministry of HRD

Kallol Hazra B K Mittal


HP MTNL

B N Singh Chirag Unadkat


Hughes Escorts Communications Limited Narsee Monjee Institute of Management
Studies
K Krishna
Sangeeta Gupta
Hughes Escorts Communications Limited
NASSCOM
Kunal Bhattacharya
Diggy Barman
ICI-Uniqema
NIC, Department of IT
Brig. Sreedharan
Dr Y K Sharma
Incable
NIC, Department of IT
Jyotin Goel
PG Ponnapa
Indian Movie Producers Association
nLogue
Julio Ribero
C Chakravorty
Indian Performing Rights Society
Office of the Registrar General & Census
Sanjay Tandon Commissioner
Indian Performing Rights Society
Satish Shetty
Manjunath Jagirdar PAFEX
I-Spatial
Arun Gupta
Sivakumar S Pfizer
ITC
Vipul Pradhan
V V Rajshekhar Phonographic Performances Limited
ITC
Dhaval Agarwal
Abhishek Rao Qualtime exports Corporation
Marico

© Confederation of Indian Industry


India’s Broadband Economy: Vision 2010

Prakash Jhaveri
River Diamond & Jewels Company Noel O' Connor
The Technology Mission
Abhik Mitra
RPG Group Sam George
Traveljini.com

Ronak Rughani N C Gupta


Rughani Brothers Tulip

Dr. Pednekar Pradeep Hejmadi


Ruia College Turner International India Private Limited

Jyoti Sagar Prof. J.B.Joshi


Sagar Arts UDCT Mumbai

Gowri Ishwaran Ashwani Kumar


Sanskriti School UTStarcomm

Kavita Punjala Dhruv Anand


Sanskriti School UTStarcomm

Pradeep Kumar Yogesh Bijlani


SBI UTStarcomm

Shrikant Joshi P K Garg


Sify Wireless Planning & Coordination Wing,
MOCIT
V V Kannan
Sify

M Venugopal
Software Technology Park of India

S N Zindal
Software Technology Park of India

Rajiv Mehta
Surat Diamonds & Jewellery

© Confederation of Indian Industry