Broadband services growth in India has lived under the oversized shadow of mobile services growth. While the Telecom policies of 1994 and 1999 did help the country achieve a telecom revolution, the Broadband Policy of 2004 could not lead to a comparable outcome.

There could be several reasons to this, but a key factor has been a relatively low private-sector participation in the broadband services segment. Unlike in the case of mobile services, where the private telcos have pan-India footprints, in the broadband segment they only have pockets of coverage. As a result, while private telcos together command a dominant share of the mobile service subscriber base, a majority of broadband subscribers in India are with the state-run telcos.

A key reason why private telcos have not been able to expand their wireline broadband footprint the way they have grown their mobile presence is because the cost of deploying broadband infrastructure would be prohibitive and disproportionate with the potential returns. On the other hand, mobile infrastructure is much easier and cheaper to deploy and the subscriptions are quick to follow.

It’s been reiterated in the recent past that broadband and telecom growth can potentially contribute to the GDP of the country in a significant way. Telecom Regulatory Authority of India (TRAI), in its recommendation on National Broadband Plan in December 2010 noted, “According to World Bank a 10% increase in broadband penetration increases GDP of a developing country by 1.38%.” Now, more than seven months after the recommendations were made, Telecom Commission has reportedly proposed to create the National Optical Fiber Network (NOFN), a plan for which was detailed in TRAI’s recommendations.

The project would indeed be of a mega scale and will require a long timeline, which would likely be elongated by virtue of a series of ministerial and bureaucratic processes and approvals that must be adhered to, appreciably so.

So do the potential broadband users, in smaller towns and possibly in rural centers have no other option but to wait for an NOFN to roll out? Or can the private telcos offer an alternative?

While it could be unviable for telcos to deploy separate broadband infrastructures, could a consortium route be explored? Consortia are already common for international long-distance undersea cables. Could the idea be extended to build domestic terrestrial fiber networks? Such workarounds could make broadband growth a quicker reality.

(As published in Deccan Chronicle, July 28, 2011; header modified)

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