Print

Comment

Email

Digg

Del.icio.us

Reddit

Growth in broadband subscribers is not encouraging. But the segment is likely to experience an impetus with the National Optic Fiber Authority(NOFA) all set to lay optic fiber across the country, which would be further leased out to telcos for providing broadband services.

BSNL has decided to shift about 2 lakh of its 3 lakh employees to the newly created NOFA. The PSU would be spending around Rs 40,000 crore for laying of around 12 lakh km of optic fiber. The time line for the same has not been specified.

The telecommunications industry welcomes the move since the biggest impediment in increasing broadband penetration in the country is that the incumbent operator is not ready to lease out the infrastructure. At just 0.5%, India has one of the lowest broadband penetration in the world. This dismal show can be attributed to the limitations of wireline Internet like last mile connectivity, right of way issues, poor quality of copper, time take to deploy the network and reach customer premises.

The industry alleges that the incumbent has not played a positive role in the penetration of broadband in the country and this is a step in the right direction.

“It will help in the proliferation of the broadband. BSNL has the best infrastructure in the country but they are using it only for themselves. They view the private operators as competitors and are scared that they would be able to offer more services than them. If they are planning to have infrastructure across the country for leasing out to other operators it is a positive thing,” says Rajesh Chharia, president of Internet Service Providers Association of India.

British Telecom in United Kingdom, which has one of the largest infrastructures, regularly leases out to other players. BT follows the concept of `functional separation', which basically means that separate business units with separate accounting are created for the firm's retail offerings and wholesale offerings. This idea could find application in situations where infrastructure competition is not likely to develop soon and, thus, the best hope for competition in the near term is service competition.

Chharia also emphasizes the importance of incumbent sharing its infrastructure. In this context the move of NOFA to have optical fiber across the country and to lease out to other telcos assumes importance.