How a regulator and a state owned carrier is hampering Broadband growth in India.

More than half a decade ago, India’s state owned carrier BSNL(Bharat Sanchar Nigam Limited) was hailed as pioneer of providing wired broadband internet access in most of rural areas. It was a time when the nation had not experienced 3G, and 512kbps was a norm in broadband internet access.  Anyone using anything above a 1mbps was either too rich or a business owner. A 512k connection on an unlimited download quota would cost approximately INR.999 ($16 today). There was no such thing as a 8 or even a 4-mbps ADSL connection, even in the grand metros.

The state owned entity, BSNL, had the largest optical fibre cable connectivity which could also be termed as the best in terms of best last mile connectivity, covering a vast expanse of rural as well urban areas. This connectivity was available where no private player could reach easily, and still today private players have not ventured outside tier-2 cities for wired broadband. It was not unusual to see ADSL modems in houses in rural areas. At half-a-mb/sec and almost a thousand rupees a month, at least rural India was beginning to get connected.

Fast forward to 2014. Almost 3 years since 3G cellular services have been introduced. 3G was hailed as India’s route to “cheap high-speed broadband access”, due to ease and speed of setup of mobile towers compared to conventional digging & laying of cables. It was supposed to fill in the gap where wired-broadband couldn’t – cheap, fast and reliable access to internet for anyone using a mobile phone – which basically everyone seems to carry these days.

However, contrary to expectations, outside of metros and tier-2 cities, today, almost no 3G networks exists. Private telecom carriers, as in the case of wired broadband, have limited their 3G networks to urban India. As a result, urban India which already had access to wired-broadband is now upwardly mobile with 3G & even 4G-LTE internet speeds. And, as was the case with wired or ADSL broadband, only BSNL covers the rural areas with its 3G networks.

Now it is evident enough that the private sector has almost abandoned rural areas of high speed internet access, BSNL seems to be unable to get its act together when it comes to delivering both wired and wireless internet to rural India. And tragically, it has happened inspite of BSNL possessing the infrastructure to deliver it. The coverage might not be expansive and does not cover every village, but it is still far greater and covers a major portion of India’s population.

Now, that we know that there is no beating BSNL in terms of reach, let us have a look at some other aspects of broadband access in India.

A report by Akamai earlier this year, ranks India having the lowest broadband speeds in Asia-Pacific, with only 3% connections above 4mbps, compared to 93% in South Korea. An obscure country like Curacao has 87% of its internet connections above 4mbps.

This, of course should come as no surprise to anyone even remotely following the Indian telecommunications scene. The government regulator, TRAI, classified 512kbps of minimum download speed as Broadband back in 2013.

How fast is 512kbps? Well, it is fast enough for 2005, not 2014. At this speed it is not possible to stream videos, let alone HD videos, and most multimedia webpages today wouldn’t load fast enough on 512 kbps. By limiting to 512kbps, the regulator is effectively denying India the “Internet economy”. What this means is most Indians cannot go online and watch a latest movie(Netflix anyone?). That also means, any online streaming company would not open shop in India, which is basically lost employment. Not even mentioning the potential of having your own channel on Youtube and earning from it. These are just two examples of many when it comes to economic importance of having high speed internet on your premises. It’s ironic that these are simply not viable in a country which has 20% or more of world’s population.

 

So, there is no binding on even a state owned carrier to provide high speed internet on a basic start-up plan to the consumer. And a look at BSNL’s website reveals that the basic plan offering 512kbps starts at around INR.600/month. We cannot blame the private players here, because airtel seems to offer a 2mbps plan for INR.799/month(and 512kbps limit kicks-in only if you exhaust the download quotas). And herein lies the source of problems concerning growth of internet speeds in India.

Not only are BSNL’s broadband plans are at times 4 times as costly as competition, but ridiculous looking as well. Sometimes you cannot stop laughing at being made a fool of, and wonder whether BSNL is making a fool or you or itself. There are existing plans(yes as of 2014) which offer speeds of upto 4Mbps and monthly download limits of 8GB/month in the same plan. Then there are plans which have 4Mbps speeds and 100GB download limits, but it is has a monthly rent of approximately INR.7000. To give you a perspective, airtel offers 4mbps and 80GB combo at INR.2400/-.  The plans scream of not buying them. It is as if BSNL itself wants the consumers to go away from it.

As a state-owned entity, it seems natural that BSNL would be able to provide a low-cost alternative to private players. Anyone with a hint of common sense would think that government would effectively use BSNL to change the benchmarks in favor of the consumers which private players would follow. By pushing prices down across the board, and by increasing minimum speeds, BSNL could have lead the charge to change the scenery of wired broadband access. Rather, it is the private players who have been able to bring in volumes of customers by reducing prices, which has enabled them to further cheapen the services and as a result, bring in more subscribers.

BSNL like the rest of the state owned corporations, has failed to take advantage of its own strengths. The behemoth has basically just slept on its huge infrastructural advantages, instead of acting as a catalyst and facilitate as well as revolutionise the economic development of the nation.

Indian General Elections – Who is standing up for the environment?

India is home to more than one-sixth of world’s population and by 2025 is expected to be the most populous country in the world. It goes without saying that what India does will undoubtedly have an impact on the world. Forget about the world, whatever the Indian government decides to do or not do, it will have a more profound impact on India itself. In 2011, India was already the world’s 3rd largest CO2 emitter.

It is well known the entire Indian economy is hugely dependant on weather patterns. A failed yearly monsoon, is usually enough to wreak havoc with primarily agricultural driven economy. Though the climate change is expected to have no drastic impact on the monsoon patterns themselves. In fact, the rainy season might vary by 5-10% from normal.

It is not unusual to have drought like situation in some states, while others states are flooded. Most of the rain water runs-off anyways. It is surprising that how the fresh water from monsoons is not harvested which has the potential of eradicating drinking water scarcity issues Indian cities already face.

However, it is not the monsoon which is should be a cause of concern. Neither is it the Himalayan glaciers, glaciers are expected to stay put till at least 2060s, and additional 5-10% monsoon rains should provide adequate water for the great plains at least in theory.

What is of concern is the deteriorating quality of breathable air in some of our metros. Delhi was classified as the world’s most polluted city back in January. It is surprising to note, that despite having this very recent not-so-wanted feather in the cap, almost no political party in Delhi has pollution on the agenda. Indians have the weakest lung function[upto 30% lesser than a standard European person] because of pollution, not to mention that the nation has highest death rate from respiratory diseases.

But in India, none of the political parties(even in the heavily polluted Delhi) have clean-air on the agenda. Instead of sustained environment friendly development, only blind development seems to be a priority. With the count of vehicles increasing at a rapid pace, and the growth of per capita income the number of vehicles is only bound to increase in our cities. That will create more problems than development will ever solve, with high concentration of population, and lack of adequate road infrastructure for massive traffic. 

The blind flight towards urbanization & development, and absence of any policy to prevent environmental hazards resulting thereof, is simply unsustainable in a populous country like India. And it seems like the political class is yet to wake up to the reality.

The 2014 Indian General Elections & its impact.

Less than a week from now, India would be going to elections – probably it’s largest and most important general elections.

Economically, as is well known, India has not been faring well over last 3-4 years. The growth rate has been at amongst the all time low since last 2 decades. General mood amongst entrepreneurs & corporate houses is glim. Even though the masses might not be in a mood to admit, or may be simply may not be aware that the economic dream of the 2000’s is more or less over. What many forecasted as the rise of “The Great Indian Nation” in the next 10-15 years in early 2000’s is today still a pie in the sky. It was not rare for a week to pass without any prominent personality mentioning somewhere in the media how India will return to its former glory(sic) in the next 10-15 years.  The politicians, policy makers, economic experts and everyone else who falls in between were quick to point out that India will surpass China economically, militarily by 2020. Several reasons were cited – India’s abundance of english speakers, democratic values which would help in the long run and what not.

Over a decade later, cut to 2014 & the dream is still a dream. China is still far ahead of us, economically & militarily. India still has an abundance of english speakers, however most of them are unemployed. As far as democracy is concerned, the country’s democracy today resembles more like that of Iran or an African nation, rather than democracies of countries it actually wants to imitate. Politics is predominately driven by patronage, where without the support of bureaucracy or a family name, one cannot expect the government to function – a point in case, the recent debacle of AAP lead government which struggled to function before its untimely demise after 49 days.

For India, now, it is not about whether it is a superpower ahead of China. It is about survival of the essence in which this nation was born almost 70 years ago. The nation is treading on thin moral ice, where rape – of women, of moral values, of democracy itself – is an everyday occurrence. The political class is more concerned with power grabbing & money laundering rather than care about providing basic amenities to 20% of humanity it rules over. It is not uncommon to go without electricity for hours in urban areas. And with areas like South Delhi & Dwarka(West Delhi) still struggling for water supplies, it is anyone’s guess what the situation in lesser cities would be. There seems to be no policy in place to mitigate any water crises due to monsoon failure &  snow impacting climate changes which in effect would have a drastic impact on India’s electricity generation which is dominated by hydro-electric projects.

Civil amenities and services structure is on a brink of a collapse in most of the urban areas, where 30% of the Indian population resides, and the population in the urban areas is only expected to go up. Civil services, such as Police, health, are already stretched for the worse. With only some metros becoming hubs of development, stark contrasts in inequality of incomes will only become starker, in absence of any policy which focuses on all all round development. Entire UP is a stark contrast to Noida as far as development is concerned.

The problem is that not one political party today is willing or is able to take the country out of this mess it is in today.

Congress, which has been on a vanguard while India’s situation worsened, seems more concerned about power than actual development of the country. Mr. Rahul Gandhi, who has been unwillingly forced into politics(proven moreso by his contrasting body language in the speeches he delivers). And his only reason for joining politics seems to be saving his family name rather than saving the nation. Congress seems to be so certain of losing the election that with less than a week to go, it is yet to announce its PM candidate. It was Congress at helm, when the India went to ruins after 2008. Does this country need another 5 year term governed by a Congress lead government?

BJP, is just congress in saffron colors. It did nothing to address the socio-economic issues in its last term. The only feat worth remembering(apart from A.B. Vajpayee’s speeches, Rahul Gandhi would be wise to take a lesson or two) was India conducting nuclear tests was during BJPs tenure at center. The performance was so poor, it got thrown out of government after only one term despite the India Shining campaign. There is no way to prove that it is less corrupt than the Congress, rather, BJPs allies are not only more communal(Shiv Sena, Akali Dal), but sometimes more corrupt when BJP is at the center(Akali’s amassing of massive wealth in Punjab is an open secret).

AAP has done so much to damage its own image in Delhi, that any sane voter would think twice, and then think thrice, before voting for AAP. Here is a party which has absolutely zero experience in governance, and to top it all cannot seem to manage the bureaucrats who would are a necessary evil to run any government. And it seems to have no plan on how the economic challenges would be addressed. Imagine an AAP government at the center(though highly unlikely), and only one thing comes to mind is chaos – multiple times bigger than what Congress & BJP can create together.

Irrespective of who comes to power next month, the outcome of 2014 Lok Sabha elections will in all certainty define the future & the course India would take over next 2 decades –  economically, politically & socially.