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Private telecom operators have neglected most of the Indian population by not launching broadband in rural belts. Besides doubtful RoI, poor PC penetration has been cited as one of the main reasons for not expanding in unexploited areas.

For private players, wireless phones rule the rural market. Operators say, according to Trai, around 28% of total wireless users are now coming from rural areas. A large chunk is dominated by private operators. Will they replicate the wireless success in rural broadband too after grabbing 3G and WiMax spectrum? In the last quarter of FY 2008-09, the wireless rural user base reached the 109.71 mn mark as against 93.15 mn in the previous quarter.

PC penetration adds value. According to a recent study, for a country like China, our main rival in the telecom space, the per capita GDP is likely to increase to $18,000 from $8,000 as PC penetration increases from 5% to 24% from 2005 to 2015. Countries such as Korea, Singapore and Sweden attribute their inclusive economic growth over the past decade mainly to the increased PC and broadband penetration.

Baburajan K

Operators and PC makers are working together to make broadband dreams a reality. The recent tie-up between BSNL and HCL Infosystems to offer rural broadband is in the right direction. With this initiative, BSNL will be trying to regain its lost glory in the wireline space with the assistance of the USO Fund. BSNL commands 99.65% share in rural wireline market, which has declined to 10.58 mn in March 2009 from 11.64 mn in March 2008.

The USO Fund will be offering a subsidy of Rs 4,500 per broadband connection that BSNL will be rolling out through its 27,789 rural and remote telephone exchanges. This subsidy is available for private operators too. But there are no takers at present, as most of them are waiting for launching mobile Internet connections.

India has set a broadband target of 100 mn by 2014. We will miss our 20 mn broadband target by 2010, since the broadband subscriber base only increased to 6.80 mn in July 2009. If enough action is not taken, we will miss the 100 mn by 2014 target too.

We need brave actions from the government. Operators will listen to the Department of Telecommunications. They cannot afford to miss the rural masses. Along with rural cellular connections, they should offer cost effective broadband connections too. India did not realize the potential of broadband. It is time for action. We need stringent rules to encourage private operators to go rural with broadband connections. They should not neglect the market. Private players are losing market share in the Internet space. The PSU-run ISP's market share increased from 67.82% to 69.30% at the end of March 2009.

Since wireline broadband is not the right solution, the forthcoming 3G and WiMax spectrum auctions can solve the broadband issue. But how many operators will be looking for a pan India 3G licence? Even if they grab the spectrum, how many operators will be rolling out affordable mobile Internet services in rural areas?

Baburajan K
baburajank@cybermedia.co.in

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