On behalf of the Income Tax Department, Andhra Pradesh, myself and one more Officer have attended the Conference on Telecom & Broadband conducted by Confederation of Indian Industry (CII), Andhra Pradesh on 10th January 2007 at CII Sohrabji Green Business Centre, Madhapur. This conference is to understand the new tends in telecom & broadband technology, the challenges and opportunities that it provides. The conference also deliberated on how to manage expectations of various stake holders, strartegies pertaining to aligning IT & business, business continuity and telecom outsourcing beside others.
BACKGROUND:-
The telecom services have been recognized the world-over as an important tool for socio-economic development for a nation. Telecommunication is one of the prime support services needed for rapid growth and modernization of various sectors of economy. It has become especially important in recent years because of enormous growth of information technology and its significant potential for the impact it has on the rest of the economy.
Telecommunication networks of India and China are among the largest in the world. India’s position as a global capital of outsourcing industry has been a major trigger for spurring broadband demand in the country. India operates one of the largest telecom networks in Asia and fifth place after China, US, Japan and Russia, with 183.46 million telephones as on November 30, 2006, as against 125.79 million as on December 31, 2005, a 50 percent growth rate.
The mobile phone made a debut in the country in 1995 and struggled for the first three years to touch 1 million mark in 1998. Thanks to the new telecom policy operated on revenue sharing mechanism for mobile operators, and southward movement of handset prices, the number of mobile subscribers touched 100 million in June, 2006. The mobile market is expanding at an awesome rate of around 5 miilion new subscribers added every month.
Four of the top ten broadband economies of the world are in Asia. South Korea, Hong Kong, Taiwan and Singapore have the distinction of achieving highest broadband household digital connectivity index of 60% to 80%. Broadband services were launched in India in 2005 and presently cover about 300 Indian cities with a combined 2 million connections. Although the Indian broadband sector is in its nascent stage, it offers huge potential provided proper policy initiatives of the government are combined with technological innovations so as to provide these services to customers at reasonable and affordable prices combined with satisfactory service.
The Conference was inaugurated by Mr. K. Rosaiah, Hon’ble Minister for Finance, Government of Andhra Pradesh. In his inaugural address, he congratulated CII, who with the help of state government organized this conference. He stressed the importance of information technology revolution helping the governments in initiatives like tele-education, tele-medicine, and e-governance. Accelerated growth in the penetration of PCS and convergence of video, audio and communication are paving the way for this revolution, he said. The domestic consumer mass for IT, telecom and consumer electronics is also contributing to the fast pace of telecom and broadband growth in the country. As per him, the main constraints are infrastructure, government policies and high interest rates. He said “the need of the hour is globally competitive”
In the theme address, Mr. Shakti Sagar, MD of ADP Pvt. Ltd., a fully owned subsidiary of Automatic Data Processing Inc., USA, said “today’s broadband is tomorrow’s traffic jam”. According to him, the main challenges in broad band sector are
- Cost, quality and content
- Broadband equipment
- Return on investment
- Affordable and high speed broadband
Presently, Korea is ahead in broadband services with a penetration rate of 80% : out of 15 million houses in Korea, Braodband is available in 12 million houses.
In his special address, Mr. Andrew Dinsley, First Scretary (Trade & Investment), UK Trade & Investment, given the UK’s perspective on broadband. He said that Singapore has free internet facility at its airports. In UK, the broadband subscribers are increasing at rate of 1 lakh per week. In fact, the number of mobile phones in UK standing at 67 million is more than its population at 60 million. In UK, the broadband services are provided free of cost. With the emerging technologies, there are enormous investment opportunities for Indian companies in UK and vice versa. Hyderabad based North Gate Technologies, a VoIP service provider, invested in UK. Vodafone, Orange and T-mobile are investing huge amounts in R&D leading to innovation in broadband technology. If the pace continues, India will knock out Japan for the second position in terms of investments made in UK.
In his keynote address, Mr. B V R Mohan Reddy, Chairman & Managing Director, Infotech Enterprises Ltd., has said that 21st century belongs to knowledge economy, which will create wealth all around the world. Research & Development (R&D) will become a key driver in innovation. The Indian telecom sector is growing at such an unprecedented rate that Vodafone is ready to buy stake in Hutchisson Essar at a cost of around $1100 per subscriber where as the international average is only $700 per subscriber. Demand form business will drive the growth of broadband in India. With the help of broadband, business processes will be improved achieving efficiency and increasing productivity. The sectors like supply chain management, movis, music, games, local information, e-education, life sciences, health care sector, e-governance and agriculture sectors are benefited by improved and faster broadband connectivity. More and more growth is expected from Tier-II and Tier-III cities like Vijayawada, Visakapatnam, Rajahmundry, Guntur and Kakinada in Andhra Pradesh.
In the world, the total broadband connections were 17 million in 2001, which was increased to 70 millions presently. South Korea tops the list with a penetration rate of 57 per 1000 households whereas in India the rate is 2 connections per 1000 households. Presently there are 60 million television viewers and 7 million internet users under dial-up connections. These are the potential customers for barodband connections.
Technical Session I : Broadband : The Wi-Fi world. What next?
Under the Technical Session-I, Mr. K. Balachandran, MD, ADC Krone, has addressed the conference under the theme “New Networks – New Ways”. Presently, service sector contributes around 56% to our Gross Domestic Product (GDP). Indian cities like Chennai and Banglore are absorbing office space equivalent to that of any other global known cities like Tokyo and New York. According to him, bundled services will drive the growth of broadband. The service provider will have to put together his video, audio and voice services. For example, in US, the revenues of those companies which have provided bundled services have grown faster than that of companies providing single service like ISP, Video Streaming etc. The evolution and advancement of broadband technology over copper, fiber and wireless will pave the way for seamless services integrating all of our gadgets including telephone, television, mobile, and computer.
The theme of tomorrow’s world is “Any content, Any where, Any time”. In recent years, mobile operators are passively sharing the mobile towers among different service providers so as to reduce the fixed costs. Gradually, they may be service convergence and network convergence on an active sharing basis wherein broadcasting capacity may be shared among the service providers. IEEE 802.16e deals with the broadband spectrum. In India, the 3G spectrum which may be auctioned by the Indian government may be 2.3 GHz, 2.5GHz, 3.3Ghz or 3.5 GHz. The main problem in the 3G spectrum is related to uniformity of the spectrum throughout the world as different countries are using different frequencies making the standardization of equipment difficult and in effect, rising the initial cost of infrastructure for broadband services. Many of us felt the failure of network coverage in big buildings, malls, hotels, underground parking spaces. Some of the industrial areas like underground mining areas are still to be covered by the network coverage. 60 to 70% of all calls are originated from the buildings. Hence, in-building systems to enhance the coverage is one of the area are required to make the broadband available to us while on the move. Mobility, affordability and speed are the three crux areas for successful penetration of broadband services.
Gradually third party infrastructure companies are coming into picture. These companies are only for establishing the telecom and broadband equipment and facilities. For example, American Towers, a owner, operator and developer of wireless communications towers with more than 14000 sites in the United States, Mexico and Canada, is in negotiations with Tata Teleservices, Hutchison-Essar, and Bharti for outsourcing and management of towers. The move is expected to help Indian telecom companies to reduce their requirement for fresh capital, reduce costs and unlock value of shareholders. Reliance Communications has decided to hive off its mobile phone towers into a subsidiary and offload a significant stake to American Tower.
Mr. T Hanuman Chowdary, Director, Centre for Telecommunications Management and Studies, a pioneer in the development of Indian Telecom Policy, spoke on the theme “Broadband Development – R&D for Technology & Applications: A National Mission”. As per the figures given by him, Average Revenue Per User (ARPU) was 1.6 times the Per Capita Income in 1994. With the drastic reduction of tariff in recent years and with the rising personal incomes of our populace, the ARPU has come down to 0.16 of per capita income at present. There is enough back-bone bandwidth for domestic and international traffic, he said. BSNL, Rail Communications, GAIL, PGCL & numerous P-Telcos have sufficient bandwidth, provided we use them efficiently. BSNl/MTNL is also planning for another Undersea Cable. VSNL acquired Canada’s national carrier – tele Globe which has connectivity to 240 countries and ownership in 100 subsea and terrestrial cable systems. He expressed concern over minimal allocation of budget for R&D in the telecom filed. For example, ITI has spent an amount of Rs. 38.73 crores on R&D in 2006, which is a paltry 2.21% of sales. Like pharma companies, Indian telecom companies have to spend at least 20-30% of their sales on R&D. In US, IT companies spend 15% to 30% of their sales on R&D. He lauded the government for its internet policy wherein there is no entrance fee, no license fee, no revenue sharing and no territorial restriction / obligation. Induce multi-story buildings, new townships / residential complexes to install Wi Max base stations and connect them to the back-bone.
Lt. Col. Narendra Kumar Yadav, genral Manager – Projects, ICOMM Tele Limited, addressed the conference on the latest alternative technology available for broadband services. It is called High Altitude Platforms (HAPS) wherein high altitude positioning of balloons fitted with broadband equipment caters to wider area wireless connectivity. The frequency spectrum is 28Ghz or 48 Ghz. In stratosphere, 17-22 kms above the ground, the air velocity is almost zero. In this layer, airships will be placed. One such airship can cover the land area of 75km radius, beneath it. It can have multiple antennas which can cater up to an area of 600 km diameter on earth. In fact, Japan has already proved this technology. But, we have to wait 3 to 5 years for this technology to arrive in India. Vehicle users in India may have to wait for at least 7 more years for this technology startup.
Mr. Kusumba S, Treasurer, ISP Association of India (ISPAI), spoke about the dangers involved in the wireless communications and pitfalls in the government’s broadband policy. While using your mobile phones, deactivate your Bluetooth or wi-fi, otherwise the man next door or in the vicinity may hack your mobile, steal your address book or message. He has introduced the terminology like WarWalking, WarTalking and WarFlying – these terms refer to the methods adopted by hackers to look for open wireless networks to login. In fact, there is WarChalking in which the the persons finding an open wireless network marks it on the traffic post or wall post with IP address and speed of the network so that other people can can come down to that place for entering into the network and use the internet services freely.
National Telecom Policy, 2005 enunciated the broadband targets at 3 million and 9 million by 2005 and 2007 respectively. However, we could achieve only 2 million broadband subscribers by the end of 2006. In fact, this is mainly due to the lopsided policies of the Government, he says. For example, BSNL’s 7 million copper conductor pairs covering 35 to 40 million premises can be used for providing broadband services. However, only 4% of the above network is used for these services as the present policy does not allow ISPs to access this copper network. He said that it is not the technology; it is the policy which is inhibiting the growth of the broadband sector in India.
M. T. Arvind, CEO, Amplebit Technologies, has thrown light on soft modem for broadband connections. In the initial stages of internet days, we had bulky external dial-up modems. Gradually, they have been replaced with the internal modems. Nowadays, the vendors are selling computers with modem inbuilt. Even in the case of broadband connections, we are presently spending around Rs. 1200-1500 on the broadband modem, installation charges of around Rs. 250 and recurring monthly charges of Rs. 250 – 500 depending on the usage plans offered by the service providers like HathWay or Dishnet. With the introduction of soft modem, a modem in software, the initial coast of broadband connection will reduce to the level of dial-up connections making it viable for rural and semi-urban expansion. He says “ affordable bundling of broadband modem with PC will accelerate the penetration of broadband services”
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