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Rural broadband

November 16, 2010
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With the completion of the 3G and broadband wireless access (BWA) spectrum auctions, the sector is gearing up to replicate the success of mobile telephony in broadband. The potential of BWA technologies is evident from the fact that the auctions fetched the government over seven times the reserve price per block. tele.net recently organised a conference, “BWA in India”, to provide a platform to discuss the potential and challenges associated with these services. The following section on Rural Broadband opportunity brings forward the views of  Ajay Bhattacharya, Administrator, USO Fund….

The rural market has huge untapped potential for broadband. The country’s current broadband subscriber base has crossed 10 million, of which rural areas account for only 0.7 million. These figures fall far short of the government’s national broadband target of 20 million connections by 2010. However, the rural market should not be underestimated. Increasing the penetration of voice services in these areas would translate into a higher broadband reach and greater uptake.

Several initiatives are being taken to improve the situation. For instance, 100,000 customer service centres (CSCs) are being set up under a project launched by the Department of Information Technology.  Another 250,000 CSCs are being set up under the Bharat Nirman programme. Also, the Universal Service Obligation (USO) Fund is supporting the construction of broadband kiosks. Of these, 80,000-85,000 CSCs will be accessible through wireline and the rest through wireless technologies.

Several other departments of the union and state governments have been initiating e-governance projects. A key driver for broadband in rural areas is the growth of literacy and demand for entertainment-centric services.

However, there are several issues that need to be addressed. These include poor connectivity, lack of content affordability, etc. Connectivity is a major issue in providing broadband services in rural India. A sparse and dispersed population means that the capital expenditure per customer is high. This issue can be addressed by using the existing passive infrastructure. Usually, spectrum scarcity is not a problem in rural areas. This is because adequate passive infrastructure is available due to the phenomenal growth of voice services. Therefore, we plan to piggyback on that infrastructure, while using cost-effective technologies.

Also, the number of customers per site would be low, which gives rise to the issue of viability of the network (at least initially). The challenge, therefore, is to minimise capex and opex. Similarly, energy usage needs to be optimised and renewable sources should be used wherever possible.

Moreover, rural-specific packages should be offered at reasonable prices to drive demand. Also, relevant content in local languages needs to be provided so that the business case for broadband is strengthened. Operators should not shy away from entering these areas as there are rich rewards awaiting players who leverage the first-mover advantage.

Backhaul may not be a problem in these areas initially but it could become a constraint with the increase in data traffic. Therefore, there is an urgent need to upgrade backhaul across the country to meet the growing needs of rural customers. Also, optic fibre cable infrastructure has to be extended and needs to be shared by all operators to minimise capex.

So far, our strategy has been to use the existing infrastructure and we have launched a programme with Bharat Sanchar Nigam Limited for rolling out wireline networks in rural areas, keeping in mind the operator’s extensive wireline coverage. However, availability of copper has been a hindrance to this programme.

With the 3G and broadband wireless access spectrum auctions completed earlier this year, we feel that wireless will be the medium for accessing broadband services for the bulk of the rural population. The basic issue in broadband is its qualitative difference from voice-based services. We, at the USO Fund, follow the principle of funding the gaps in viability, which holds true for implementing broadband wireless projects as well. Therefore, we plan to discuss the issues related to implementing wireless broadband projects with the telecom industry. Since implementing these projects is a complex process, the USO Fund needs to do its homework, as do the operators, in order to achieve the desired results.

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