How Broadband can change the business dynamics in India…

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Most of us have complained about bad infrastructure in India – roads, red-tape to setup businesses and processes, unclear and complex laws for taxation, non-deterministic period once Government is involved etc. The bigger and more critical problem is the lack of broadband in India.

Within Indian context, broadband is defined as an ‘Always on connection, providing at least 512 Kbps of throughput’ (till 2011, this was 256 Kbps). Apparently, this will be raised to 2Mbps by 2015! India, has one of the lowest broadband penetration rates compared to developed nations – India has about 130 million internet users, and roughly 20% of them have access to broadband.

Why is Broadband needed?

Broadband Internet is one of the key drivers for growth in terms of eGovernance, eCommerce and online education. A basic Internet connection may not suffice to drive newer applications that come up. A huge shift to deploying Software as a Service (SaaS) puts more work on the network / cloud and hence a good connection is required for an enriched SaaS experience. India has a further challenge of an immense skew in terms of broadband penetration in rural India, which is only 25% of the connections available in Top 30 cities.

Once, we needed a 2 GB Linux distro urgently – it would have taken a day to get it on a regular connection but with a 4G connection in our office, we got it done in less than an hour, and we made the release to a potential customer a day earlier. Needless to say, a high speed internet connection is always an asset and a valuable tool to a startup.

Price of Broadband

Broadband pricing is very important since it has a direct impact on penetration. DSL and wireline technologies rule the roost when it comes to broadband in India They provide adequate throughputs and they are priced reasonable in the lower end of the broadband availability.

However, with a lot of users being mobile, and the access to internet is using smart phones, tablets and laptops on the move, wireless broadband is an important driver in broadband penetration. Another important factor is, in India, a lot of people use phones as their only Internet access device.

Technology in Wireless Broadband:

To understand more about this, we need to realize that the 2.4 GHz spectrum where WiFi operates is free, unlike the 900 / 1800 / 2300 MHz (and more) spectrum in which cellular data technologies like 3G / 3.5G / 4G operate.

Operators have to pay for the spectrum. Spectrum is a limited and a finite resource, and in India, it is quite limited. Comparing to US’ 425 MHz bandwidth, China’s 300 MHz Bandwidth, India has auctioned only 125 MHz of its available spectrum. (Out of this, government owned telcos take away roughly 20%)

So, to make full use of the spectrum, it is imperative to use the technology that packs maximum data rate for the available spectrum. Currently, LTE can offer up to 40-100 Mbps in a cell (for each of the 3 sectors, typically). With a technology called carrier aggregation, throughputs can reach up to 400 Mbps. For e.g., Clear in US which has abundant spectrum is planning to use this technology. (This is the total of all client connections / subscribers in a sector). Operators can gain by reducing the cost-per-bit to 10% of 3G/3.5G data costs by effectively using 4G/LTE technologies.

Surprisingly, when I landed in Delhi two days ago, I got an SMS indicating the price and data rates – It was 10p for 10 KB for 2G Data, and 2p for 10 KB for 3G data! With 4G, this should drop even lower!

To roughly give you an idea, in terms of cost per bit, 3G is ten times cheaper than 2G, and 4G is ten times cheaper than 3G!

WiFi Offloading

Despite the amazing speeds, LTE cannot satisfy the need for speed of new and upcoming smartphones, tablets and bandwidth hungry devices and applications. To digress a little, few years ago there were two major classes of technologies in wireless. Some which provide coverage (Cellular) and some that provide capacity (WiFi), the need has now is that users require both coverage and capacity.

Cellular guys started adding capacity (HSPA+, LTE) and data guys started adding coverage (WiMAX) – We can now agree that LTE won, however, it cannot beat the capacity of a WiFi which has a fiber backhaul. So, 3GPP has recognized technologies like WiFi as a valid ‘Access Network’ and is working on ways to move from one to another.

WiFi can augment the cellular data using WiFi offloading where the users’ data connections get transferred to a close-by WiFi hotspot whenever available / possible. WiFi HotSpot 2.0 and ANDSF (Access Network Discovery and Selection Function) are some of the upcoming standards to support WiFi Offloading.

Operators in India have to plan for such scenarios with forethought not only to reduce the loads on their network, but also to provide agreed throughputs to their users. Needless to say, WiFi has a much lower cost-per-bit compared to cellular technologies. At UMA, we are working on an intelligent connection management platform to address this exact concern of mobility in Hybrid Wireless Networks (4G/3G/WiFi etc).

India really needs to step up its broadband offerings and user-friendly policies are required to push broadband penetration in India. This is indeed one of the most important infrastructure requirements to push India to the next level!

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