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Indian government greenlights plan to increase broadband penetration

Location India. Red pin on the map.

While Reliance Jio has been ripping up the rulebook, causing chaos in the Indian mobile market, some might be surprised to hear broadband penetration is still less than 10%.

Accessibility has long been an issue in India, from a mobile perspective Jio seems to have addressed this issue, though broadband remains an challenge. According to the latest subscription figures from the Telecom Regulatory Authority of India (TRAI), there are currently 22.2 million broadband subscriptions in the country, compared to roughly 250 million households. This is one of the discrepancies being addressed by the National Digital Communications Policy – 2018.

According to the Indian Express, the government has officially given the green light for the policy, which aims to attract $100 billion investment and create an additional four million jobs in the digital communications sector. The ambitions and targets are certainly bold, though momentum is certainly with India.

In terms of the top-line objectives, there are six; provisioning broadband for all; creating the four million jobs; increasing the percentage digital communications contributes to GDP from 6% to 8%; taking India into the top 50 places in the ICT Development Index of ITU; ensuring digital sovereignty; enhancing India’s global contribution to the digital economy.

Looking specifically at the broadband side of things, by 2022 the Indian government hopes to enable fixed line broadband access to 50% of households across the country, 100 Mbps broadband on demand to all key development institutions, provide 10 Gbps connectivity to all Gram Panchayats of India. These ambitions will be realised through creating a ‘fibre first’ initiative, promoting collaboration models involving state, local bodies and private sector, as well as incentivising and promoting fibre connectivity for all new developmental construction.

The telcos will surely be rubbing their hands together in anticipation of the opportunity. Fixed broadband infrastructure is an expensive game, though love and care from the government, as well as subsidies and potential tax benefits, will certainly offer opportunity to deploy infrastructure, new customers and revenues. Over the next couple of months, the government will aim to create a National Digital Grid, through the establishment of the National Fibre Authority, building Common Service Ducts and utility corridors, facilitating development of Open Access Next Generation Networks, as well as standardising costs and timelines.

Broadband offers a significant opportunity for the telcos who have seen profit margins decimated by the entry of Reliance Jio. With such low broadband penetration, the land grab for customers will be a vicious one, though with higher ARPU the rewards are quite clear.

From a global perspective, increased broadband penetration will certainly offer India a greater opportunity to play a more notable role in the global marketplace. This is looking at the global question outwardly; there will be a number of international businesses keeping an eye on developments here. Should broadband accessibility increase, companies like Netflix will almost certainly be lining up new products and tariffs. This in turn will stimulate the Indian creative industry, as a cornerstone of the Netflix strategy is to create local content.

The mobile revolution kicked off by Jio’s disruptive pricing proved to be a catalyst for India in the international digital economy, though increasing broadband accessibility and penetration could have the same impact. India has been an interesting market over the last 12-18 months, and with broadband now being addressed, it has recaptured our attention.

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