Even with prices fallings, you still pay more for your bandwidth than you should. What’s going on, and will 2007 really be the “year of broadband” ?
“Hey, watch this hilarious video”, says the friend from the US, and you click on the YouTube link with all imaginable anticipation. “It’s still loading,” you say, when said friend asks you whether you watched it. Now, if your US-based friends are anything like ours, they’ll instantly give in to the temptation to send you a screenshot of their 500 KBps (yes, that’s kilo bytes ) download and call it Awww.jpg.
The urban Indian’s quest for high-speed Internet access is something that should be turned into a daily soap-lots of tears, and with nothing of note happening over long periods of time. There isn’t a rant about broadband connections we haven’t heard; what ulterior motive could ISPs have for not giving us our daily GB? After all, depriving customers isn’t exactly smart business, is it? But before we get on, time for a little lesson…
The Bandwidth Food Chain
This whole explanation becomes simpler if you consider bandwidth to be a commodity-like apples, for example. It all starts with the Network Service Providers (NSPs), who own the backbone to the Internet. They’re the ones bringing bandwidth to India, and selling it to both ISPs and you. Bharti (Airtel), Reliance, VSNL, MTNL, and BSNL, for example, are all NSPs-they’re the people importing the apples.
Next are the ISPs, who buy bandwidth by the GB from the NSPs-usually more than one-and sell it to you. Just like the supermarkets that stock the imported apples. And just like you’re charged for apples by quality and quantity, ISPs are charged for speed and data transfer-which is why they need to cap your connections as well. There are two types of ISPs-those who have established their own infrastructure and provide access over that, and those who use infrastructure that already exists-Sify, for example, provides its broadband services over the cable that has already been laid out by your local cable operator. Both deal with their own advantages and disadvantages-upgrading your own infrastructure is easier than getting your franchisees to upgrade theirs, for instance. ISPs that have their own infrastructure are also able to guarantee better services, since they are in full control of quality. However, taking the plunge to network an area is an expensive proposition, and they need to think more than twice before laying out more cabling.
We aren’t going to get more penetration this way, indicates Naresh Ajwani, VP Projects at Sify Broadband: “There are 120 million cable TV connections in India just waiting to be exploited.” We’ll get deeper to the penetration dilemma later, but there’s some food for thought in that…
Finally, the people giving you your connection may be franchisees of the ISPs, though many ISPs prefer to establish their own branch offices and give you service themselves.
The Purse-strings
So why is bandwidth so expensive? There are a number of factors to consider here, and many of them depend on each other to a point where it’s like listening to the chicken-and-egg argument.
The first, and most obvious, is the cost of the infrastructure itself. Connecting a country like India is no small matter-says A S Oberai, Director, IOL Broadband, “India is actually quite exceptional in its degree of connectivity. VSNL has around 12,000 km of optical fibre running across India-and that’s just VSNL. A lot of countries aren’t that well off. I’m told that 18 lakh villages are connected by fibre-optic cable-that’s one of the greatest things achieved in India.”
It’s not that bandwidth is much cheaper abroad-but the demand is such that it’s easier for ISPs to make their money back.”
A.S. Oberai, Director, IOL Broadband
All commendable and everything, but we still didn’t have a clear answer-but everyone we spoke to was quick to point out that prices are falling. Today, you get a 256 Kbps unlimited connection for the same price that you got a 64 Kbps connection a few years ago; if you’re on an MTNL or BSNL connection, you’re paying the same price for your 2 Mbps connection that you did for your 256 Kbps pre-January! And yet…
They key is the return on investment (ROI)-with penetration the way it is in the country, ISPs need to make enough money from subscriptions to offset their investments. Bandwidth is an expensive commodity-You Telecom CEO E. V. S Chakravarthy calls it perishable: “We pay for bandwidth by the day, so if any of it goes unused, we make a loss.” If you’re on a limited data transfer plan, you should be able to relate to this instantly-this is why you can’t carry your remaining megabytes forward to the next month.
Penetration is crucial, then-when more people start adopting broadband, the economies of scale will come into play, and the cost per connection will fall. It isn’t the only thing, however-while we fight the monster of penetration, there’s something else that will drive prices down further…
Consider your home or office LAN-the costs involved in maintaining it aren’t particularly high. There’s the one-time cost of cabling, servers, and routers, and the recurring costs of repairing the odd broken cable, the power to keep the servers running, and so on. While these aren’t costs to be scoffed at, they aren’t daunting in the big picture-to you, the bandwidth you use when accessing another computer on the network is free. Costs only come into play when you’re accessing the Internet, and companies pay a lot of money for high-speed (usually those measured in Mbps) unlimited connections.
Take it a step higher, and the story is similar. Try to picture India as one massive LAN. Accessing sites (servers) that are on this network is cheap-you’re using local bandwidth. But then, how many of the sites you visit are hosted in India? “Our dependence on international bandwidth is too much,” Ajwani points out, “and prices will drop only when more datacentres are established in India.”
All the data that comes to you has travelled from the US or Europe through an NSP’s broadband pipe-a pipe that costs them a lot of money to own, thus costing ISPs a lot of money to buy bandwidth off; so you pay more for accessing, say, Yahoo! than someone in the US does.
And that’s saying a lot-Yahoo!, Orkut and Google India are the top three sites visited by Indians-and none of them are hosted in India. Every time you access these sites (and how can you not?), it costs money. Compare this to the ideal situation where your most frequently-used sites have their own mirrors within the country. You’ll be using the international pipes less often, which means that your ISP can actually get away with buying less bandwidth form the NSP than it does now-connecting to a server in India costs considerably less-which in turn means that you can actually get much higher speeds for what you’re paying now, perhaps even cheaper!
Now you know why those blasted friends in the US are getting so much for so little!
Still, we’ve only figured out the problem. Is there a solution on the way? Datacentres in India are coming up, but progress has been slow-setting up a datacentre that meets international standards is a rather large investment.
The National Internet Exchange of India, or NIXI, (www.nixi.org) is a group of ISPs dedicated to the cause of establishing more datacentres in India, and their outlook for the future is quite optimistic. Ajwani agrees, “It will take a couple of years, but the domestic bandwidth situation in India will get better.”
Sify, incidentally, has datacentres in Navi Mumbai and Bangalore. VSNL has been at it for a while now, and the number is growing. News surfaced late last year that Google was planning to invest $1 billion in a datacentre in Andhra Pradesh.
A couple of years it is, then. Meanwhile…
The Penetration Demon
The Telecom Regulatory Authority of India (TRAI), in their Broadband Policy (www.trai.gov.in/ broadbandpolicy.asp), estimated three million broadband subscribers by the end of 2005. The actual number was a depressing 835,000 (source: Tonse Telecom, Analysts). At the end of 2006, the number was up to 2 million-still short of the previous year’s target. What’s wrong?
Ajwani blames, in part, the pricing model. “Mobile phones saw phenomenal growth only after prepaid connections came into the market. Indians don’t like seeing hidden costs, and they don’t want to get a shock at the end of every month-they’ll just respond by not adopting. Prepaid broadband connections will give users transparency, and that’s the direction ISPs should be thinking in.”
And then there’s the vicious circle-for penetration to rise, people need compelling reasons that make broadband attractive. One of those compelling reasons will be lower prices, which will come when penetration rises. Now what?
Broadband… And More
While we wait for bandwidth prices to drop, ISPs are keen on showering Value-added Services on us-for a flat subscription fee, you can now get yourself VoIP services, play multiplayer games on-demand and watch TV, with a lot more on the way.
“What broadband will do for people matters as much as broadband itself”, says Pancham Endlaw, Senior Manager at Airtel Broadband. “Value-added services will play an important role in increasing broadband penetration.”
There are 120 million cable TV connections in India just waiting to be exploited.”
Naresh Ajwani, V. P. Projects, Sify Broadband
Today, you can buy VoIP services from as many as 30 ISPs-both local and national. For a subscription fee of around Rs 100, you can make calls to any international land line or mobile for as little as Rs 1.25 a minute! Chakravarthy believes VoIP is the future: “There is a huge desire on the part of the Government to make VoIP a reality in a big way, and in a way that will trigger a meltdown in telecom tariffs-which is fantastic. The guys stalling this are the telecom companies-if I can offer you international calls at one rupee a minute and you’re willingly paying me five a minute, where is the incentive for me to cut the price?” He continues, “Right now, all that’s being talked about is the fact that ISPs haven’t paid the big license fees the telecom companies have, so they shouldn’t get to provide telephony. Once all this resistance is broken, just watch…”
Sify plans to promote broadband as an educational medium with their upcoming educational portal-students will receive classroom-like education, enabled with facilities like VoIP. “If parents see broadband in this positive light, they will be less reluctant to adopt it,” says Ajwani. Airtel’s got educational plans of their own-something that will be “more than just school”, Endlaw tells us.
And once the homework is done…
Fun And Games
In September 2006, both Airtel and You Telecom tied up with Indiagames to offer games on demand-play all the multiplayer games you want for a flat monthly subscription fee. You Telecom also plans a service where the base game is free, but you pay a little for additional features-something like Need for Speed: Carbon, only you pay real money for upgrades to your car. This was due in January, but has been delayed by a few months.
“You’ll notice that a lot of the games we offer are games that families can play,” Endlaw points out. “This makes the service more attractive-just good, clean fun.” They will be adding more genres soon, though.
Neither has any complaints about the response, but Chakravarthy admits they’re still trying to figure out the mind of the gamer, and how to make the service more attractive to this mysterious creature.
Finally, there’s good old TV.
A lot of talk has surrounded MTNL’s announcement of its IPTV services in collaboration with IOL broadband, but will it change the way you watch TV? We watched a demo of the service at IOL’s offices, and we must admit that it looks promising on the face of it. Video quality is quite agreeable, and the video on demand service works better than what you get with Direct To Home (DTH) TV today. “And if it’s financially feasible, we’ll be giving you the latest movies as early as the Sunday after the release,” says Oberai.
Others aren’t as optimistic about IPTV-“It’s just something to showcase,” Ajwani scoffs. He also notes that IPTV hasn’t had much success in Europe, and that it won’t fit in in India, either. Chakravarthy points out that IPTV assumes that you’re not used to watching TV on your PC-five years ago, for example, you couldn’t imagine watching a movie on your PC. Today, it’s practically second nature. And yet, you are made to invest money in a “PC-like” set-top box, bringing the functionality you already have on your PC, to your TV. “But the younger generation will have one window open for TV, one for browsing, one for chat, and so on.” With sites like YouTube and services like Joost, why would you need IPTV?
Overall, IPTV is a better alternative to the local cablewallah in terms of the services it offers. There’s still a chance you won’t find some of your favourite channels in the bouquet, but this will change. Meanwhile, Oberai proclaims, “IPTV is changing the Internet!”
Be it IPTV or the alternatives, we will need fatter pipes.
The 2 Mbps Revolution (?)
When Dayanidhi Maran, Union Minister of Telecommunications and IT, announced that we’ll see speeds of up to 2 Mbps on our existing MTNL and BSNL connections, we took it with a pinch of salt. We Indians aren’t used to prompt action, are we? And yet, amidst much fanfare, we entered the New Year with, sure enough, 2 Mbps connections.
Barely a few days after that, You Telecom announced their 2 Mbps plans; as of this writing, Airtel and You Telecom are the only ones who offer such speeds to the home user. “In his announcement, Mr Maran encouraged private providers to match MTNL’s upcoming offers, so we did,” says Chakravarthy simply.
Airtel announced its 2 Mbps plans nearly a month later-why the delay? “We were preparing to provide higher speeds-I believe everyone was. You Telecom did trump us, but we’ll see 2 Mbps plans from everyone soon enough,” says Endlaw.
But is the 2 Mbps picture all peachy? The first thing that hits you when you visit the providers’ sites is that there still isn’t an affordable 2 Mbps plan with unlimited data transfer. The second thing is that transfer limits haven’t been changed; considering that you’ll hit that limit much faster with the 2 Mbps connection, you’ll need to watch your usage very carefully, or face the bill shocks that hit people when they got too carried away with their first month of a 2 Mbps connection. “2 Mbps could lose credibility this way,” says Chakravarthy, “Tomorrow, if you’ve been burned by the bills, you’ll tell your friends not to fall for it, they’ll tell their friends, and so on.”
Sify, on the other hand, won’t be going the 2 Mbps way soon. “It’s all hype,” says Ajwani. “There will be a lot of complaints with the download limits. 85 per cent of Internet users go online for e-mail and Instant Messaging-do they even need 2 Mbps?”
E. V. S. Chakravarthy, CEO, You Telecom
You’re probably appalled at this statement, but this is the truth in the Indian “hybrid market,” as Ajwani puts it. The disparity between the geek’s demands and the average user’s is tremendous, and for now, the majority-meaning the average user-is going to drive the plans available in India. Did you know that a lot of people don’t even hit their download limits?
So while urban users scream themselves hoarse for faster, unlimited connections, others scream themselves hoarse just for connections, period.
But we digress. It’s early days yet for the 2 Mbps brigade-both MTNL and BSNL warn that it depends on the line condition. If you’re closer to the telephone exchange and the lines in your area are being maintained properly, you’ll see the speeds. If not, you’ll find yourself at the receiving end of a broken promise. Feedback is online for all to view-you’ll find it on any Indian technology forum, including our own; the disparity is mind-boggling. As is the disparity in the quality of service…
Meat, And Poison
You’re quite happy with your ISP-good prices, speeds as advertised, and decent customer support. You recommend it to your friend in another area of the city. Ten days later, you get showered with abuses for your recommendation. What happened?
There are two facets to service-firstly, who’s providing it, and secondly, how much bandwidth has been allocated to the area in question. When an ISP provides its service through a franchisee-usually a local cable operator-you’re bound to see differences in the quality of service across areas. Sify has been dealing with this for a long time. On the other hand, Endlaw assures, “We manage our own customer service, so barring minor differences, you’ll see consistent quality across the country.”
The second aspect is bandwidth management-if there are 200 subscribers for 256 Kbps connections in an area that has only 30 Mbps allocated to it, there are naturally going to be problems.
Then there’s the matter of the customer himself being wrong. Even something as silly as someone tripping over and dislodging the network cable becomes an irate “My Internet isn’t working!” call to the service centre.
On paper, You Telecom’s plan is the best we’ve heard so far. Unless the problem with your connection is physical-a broken wire, a faulty network switch, and so on-you’ll still be able to connect to their service site, where you will be asked for a 10-digit code. Once you do so, your system is analysed (with your permission, of course) to ensure that everything is all right at your end-no viruses, proper settings, etc. If all is well, someone will come over to service the connection, and soon after the technician leaves, you’ll receive a text message asking you for feedback on the quality of service you received. Your reply to that message will enable them to give you better service in the future…on paper.
We’ll see cheaper, faster connections this year. We’ll also see new technologies like WiMAX coming to the fore-Bharti TeleVentures, Reliance, Sify, BSNL, and VSNL have all acquired licenses to provide it, and Sify showed off their first live demonstration on February 19.
At least, this is what we’ve been promised.
There will also be innovation in the way broadband is provided-for example, in keeping with his idea of the “Indian pricing model,” Ajwani envisions the advent of “Broadband On Demand”-the ability to ask only for the bandwidth you need, when you need it. But that’s only half of it.
The way we use broadband is changing-even ISPs in the US weren’t prepared for the volume of content that’s now available online. Horror stories of Comcast cutting off users’ connections for exceeding their bandwidth limits (on supposedly “unlimited” connections, mind you) have already begun to surface.
At the India Digital Summit 2007, Maran pointed out, “Connectivity, of course, is not enough to ensure adoption of Internet. Content is another significant contributor to it-I have to say we do not have much content today for consumers!”
Consider this: YouTube-an English-language site-is now number 7 on the list of sites most frequented by Indians. “Now imagine a Hindi YouTube in India,” says Chakravarthy.
Though Maran has made lofty promises, but Chakravarthy has complete faith in the minister: “He’s a performing minister, and he’s serious when he says these things. He’s almost running the Indian IT sector like a CEO.” As for the “Year of Broadband” and all that it promises, “He’ll get it done.”
Disconnect
You probably expected us to crucify your provider for daring to interrupt your download. Or tell you that you’ll see a 2 Mbps unlimited connection for Rs 250 a month, two weeks from now. Perhaps you even expected this writer to rail about the fact that while he writes this, a 200 KB file is downloading at 2 KBps in the background. Or that the “Hah!” in broad(hah!)band will never go. Pity.
We just need to give it time. The datacentres will come, and prices will fall. PC prices will fall, penetration will increase, and then broadband prices will fall. In the mean time, you can do your bit to help broadband and PC penetration by making them more desirable-if you know someone who’s worried about what their kids will get exposed to online, tell them about the whole world of knowledge waiting out there. The television faced the same kind of resistance, but with acceptance came adoption.
We know you’ve got a broadband anecdote to share-how could you not? Will you content yourself with value-added services while you wait for prices to fall? Will you opt for IPTV? Is the country doomed to sub-standard speeds? Write in-our inboxes are quite large!