Though broadband in urban areas has not penetrated the way it should have, at least the penetration level had reached 4 mn subscribers by end-April 2008. Every year the broadband target is missed.And given this fact, achieving 20 mn broadband subscribers by 2010 looks like a distant dream. A focus on rural broadband will be the savior to achieve this target. But, what are the impediments and the way out for a rural push?

Abysmal PC Penetration
Though prices of PCs in India are one of the lowest in the world, for many households in rural India, purchasing a computer is a big decision as there is a feeling that the price does not justify its utility.

According to a Manufacturers Association for Information Technology (MAIT) study, PC sales crossed 7.3 mn units, growing 16% in FY 2007-08, with households and SMEs driving the growth. It has also been projected that PC sales would touch 8.5 mn units in the ongoing fiscal. PC penetration is one of the keys to broadband growth, but the expansion is not taking place in rural areas. However, MAIT president Mukul Singhal says, “While the prices of PCs and other access devices in India are one of the lowest in the world, to sustain the domestic IT market, we need to strengthen our broadband infrastructure at a rapid pace.”

In an interesting revelation to resolve low PC penetration issues, RK Agarwal, director (Plg&NS), BSNL Board says, “BSNL is also testing a product that has the capability to replace PCs for accessing broadband. This product can be attached directly to a television, and complete PC functionality can be obtained.” It is expected that this product will cost between Rs 5,000-6,000 and may turn out to be a big boon for service providers to access rural areas for broadband connections.

On July 2 this year, BSNL launched a bundled offer to provide computers for customers who wish to subscribe to broadband connections at reduced rates, in Dakshina Kannada and Udupi districts of Karnataka. It brought down the entry-level price to Rs 199 from Rs 250 for 24 months. Also, BSNL's tie-up with HCL Computers is designed to benefit customers who opt to buy the latter's computers by offering 10% discount. The initiative also offers a 24-month loan and can be taken to rural areas as well, helping to address the issue of low PC penetration. These computers come with inbuilt ASDL 2+ modems.

Think Local, Act Global
Another significant challenge is the absence of relevant content in vernacular languages. A study by Web Analytics India points out that since most of the content available over the Internet is in English, the urban population forms the relevant mass for Internet usage. But, in India there are twenty-two official regional languages, which means that localized content is a sine quo non for operators to get good RoI in rural areas.

Awareness campaigns for rural masses about the utilities a broadband connection offers is important to warm up the broadband market in the hinterland. Commodore Shyam Kaushal (Retd), regional director India, WiMax Forum, says, “The USO fund has to be used for providing government-owned computer kiosks to spread literacy of computer usage, which will in turn lead to higher number of people who would possibly want connectivity in future. The Postal Department, which perhaps has one of the best coverage across the country, could be a central point to the creation of kiosks for Internet usage.”

The youth should be targeted once broadband rollout happens in a big way. Also, conversation using social media platforms such as YouTube, social networking, blogs, Wikipedia, podcast, etc, will grow and form a key marketing sector in rural India. Compelling localized content will drive up the adoption of broadband.

Costly Infrastructure
Operators as well as networking companies unanimously feel that the broadband ecosystem needs to be given a boost. Financial incentives for creating broadband infrastructure will encourage operators to venture in rural areas. Atul Bindal, president, Airtel Telemedia Services says, “Fiscal incentives for companies investing in creating broadband infrastructure are important. Service tax and license fee waiver on broadband revenue, cent per cent depreciation for broadband CPE, zero excise and customs duty on broadband equipment, and USOF support are the need of the hour.”

Vish Iyer, VP, Service Provider, West, Cisco India & Saarc, echoes a similar view: “Operators can achieve the kind of RoI they expect in the longer run only in rural areas. But for this, the government has to incentivize the operators for a rural push. Policies have to be operator-friendly.”

In June this year, BSNL announced that it would start a joint venture with OEMs to manufacture the latest versions of ADSL 2+ CPE like modems for BSNL's broadband service. As per the agreement, after meeting the requirement of BSNL, surplus equipments can be sold in the market or exported by the JV partner.

DSL, cable, and fiber mediums are not cost effective compared to other options, particularly in rural areas because of high equipment prices. An Airtel spokesperson says, “Wired broadband service is capital intensive and the cost of creating the infrastructure in rural areas has increased largely due to the geographically scattered areas and difficult terrain along with comparatively low RoI.” He further says, “Countries with high broadband penetration have solved this last mile problem by unbundling the local loop. The high license fee of 6-10%, a service tax of 12.4%, and the USOF contribution of 5% further increases the cost burden.” Kaushal of WiMax Forum says, “The government has to unbundle the local loop on a priority basis. Concessions have to be given to operators who set up rural infrastructure.”

Broadband Over Power Line
When on one side WiMax is gaining currency and is touted to be the broadband panacea in rural areas, in its latest move, the state-owned BSNL has announced to introduce broadband over power line or BPL to provide broadband access to ten villages in Amethi, Uttar Pradesh. This technology is being adopted in India for the first time to provide broadband connections to far-flung areas. The implementation of the project is expected to be completed in twelve months, to provide broadband connection to 3,000 people living in these villages.

“Telcos will never be serious about implementing WiMax, as it will eat into their mobile revenue. So, independent ISPs should be allowed to provide WiMax” AK Sekhar, CTO, YOU Telecom India	“Fiscal incentives for companies investing in creating broadband infrastructure is important” Atul Bindal, president, Airtel Telemedia Services	“The government has to unbundle the local loop on a priority basis. Concessions have to be given to operators who set up rural infrastructure” Shyam Kaushal, regional director India, WiMax Forum

If the multi million-dollar pilot project succeeds in Amethi, the model can be replicated in other rural areas. And up to 200 Mbps can be achieved over existing power lines on medium and low voltage applications. Real-time access for utility application from usage information, proactive outage notification, automatic meter reading, and load management capabilities are some utility management and customer service enhancements integrated in the system.

Maple Leaf, Corinex, and IIT-Allahabad have joined hands to work for the project on a hub-and-spoke model. Retaish Parimoo, MD, Maple Leaf India says, “The technology will provide access to multiple forms of communication including the World Wide Web and VoIP.” He added that it makes sense to promote this technology as it is a cost effective medium-since a kilometer of BPL technology costs one-fourth of optical fiber.

Initially though, Maple will import technology from Vancouver but once the BPL concept gains currency, it will start manufacturing in India. The flip-side of this technology is that it causes potential interference with all radio services using their frequency range, as power lines are not designed to prevent radiation of RF energy.

Recent Moves
Rural broadband pioneer BSNL is committed to cover all inhabited villages with broadband connectivity by December 2010. Agarwal of BSNL says, “Initial equipments for phase-1 have been received and are being deployed. BSNL has already covered more than 25,000 villages with broadband connectivity and has plans to use both wireline and wireless technology to provide broadband connections in rural areas.”

In May this year, the government set up an Inter-Ministerial Group to work on rural broadband infrastructure rollout planning with support from the USOF. The group, comprising Ministries of Health, Home, Human Resource Development, Panchayat Raj, and IT will work jointly to study how various departments and agencies across India could help promote broadband usage in hinterlands.

Gramjyoti, India's first HSPA-powered rural broadband demo network, plans to connect people of eighteen villages and fifteen towns in Tamil Nadu through broadband, which will help them inquire about latest selling rates of agricultural produce, have distant education by a teacher sitting in Delhi, and get treated by doctors through videoconferencing at a distant location, among other things.

Recently, BSNL and Nokia Siemens Networks (NSN) joined hands to roll out broadband services to more than 25,000 villages using network access solutions provided by NSN. NSN will offer multi-play solutions, including CPEs, to operators to deliver cost effective high-speed Internet access and VPNs among others to community service centers (CSCs) and other e-governance locations where the rural masses can have access to broadband connections. Scores of states like Haryana and Andhra Pradesh have implemented SWAN while West Bengal and Assam are in the process of implementation.

WiMax: Important Option
Laying new copper lines or going for fiber optic cables to deliver broadband in villages that are scattered over many acres are not cost effective for operators. Since wireline broadband will not be viable in terms of RoI. Thus, WiMax will be a much more viable alternative to cable and DSL. Equipment vendors and networking companies like Cisco are ready to supply cost effective and efficient infrastructures to operators. Vish Iyer of Cisco says, “We help operators create solutions and then monetize it for offering connectivity to customers at an affordable cost. We have WiMax solutions with longer range and spectral efficiency.”

The foremost impediment for operators in the way of rural broadband is non-availability of spectrum at an affordable cost. Iyer says, “Spectrum availability with low frequency, which could cover a long distance, is the primary need of the hour for operators to roll out wireless broadband in rural areas.”

On WiMax as a viable alternative, Sekhar of YOU Telecom India says, “With wireless technology being a viable option, the government should come up with a clear-cut WiMax policy”. He further adds, “As of now only large telcos are invited for WiMax spectrum auction. But unfortunately, these telcos will never be serious about implementing WiMax as it will eat into their mobile revenue. So, ideally, independent ISPs like YOU Telecom that doesn't have any telecom interest should be allowed to provide WiMax.” Also, if WiMax has to really take off spectrum issues have to be resolved by the government as soon as possible and low cost equipment should be made available for service providers to rollout the service in a major way.

Kannan K
kannan@cybermedia.co.in