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Broadband Technology: Engine for Economic Growth & Human Empowerment
Simply put, 'digital divide' is defined as the gap between persons who have access to ICT and the tools to use it effectively and those who do not, resulting in imbalances in access to technology as well as skills needed to compete in modern day's highly competitive environment. And like so many other services, ICT penetration fails to reach the most vulnerable and disadvantaged across the world, alienating them further.
Another key aspect of the digital divide is the global digital divide, reflecting, and increasing, the existing economic divisions in the world. Countries with limited Internet penetration are not able to provide wholesome education to their citizens and are thus slipping further in a globalised economy.
And it's not only about common good. From an economic perspective too, economists are making strong links between ICT use and innovation, and increased productivity and competition.
Broadband holds the key
With the spiralling number of Internet users and unbundling of more Net-enabled applications, unreliable dial-up connections have given way to the demand for speedier connections with much higher data rates. Governments across the world have widely acknowledged broadband accessibility as an imperative for long-term economic growth. Apart from providing public services like e-governance and e-learning, broadband has opened up new avenues for growth, helping economies become, and remain, highly competitive.
The reasons are not difficult to fathom: In addition to connecting Bharat to India, increased Internet penetration will also go towards effective governance and help in areas like agriculture, health, education, banking... the scope is vast.
Indian Industry Overview:
India is estimated to move from its current position at number 18 in the world for broadband market and jump to attain the number 6 rank by the end of 2013. This will be achieved at a mind-boggling growth rate of 489%. This is the highest growth rate expected from any market and is almost the double from the second highest growth market i.e. Vietnam (276%).
Broadband services as a whole will grow by 67 percent over the next five years to reach landmark 680 million connections worldwide. This is a significant surge as compared to yearly growth rate of 28% registered for broadband services from 2004 to 2008. The growth of the services is likely to be from the developing markets including the emerging markets like Russia, India, China, Brazil while countries like South Korea, Japan and Denmark are close to saturation level.
Few Quick Facts - Mobile Broadband
The Government paved the way for deployment of Mobile broadband over 3G and WiMax or LTE. It is now for the operators to build a healthy eco-system and offer Wireless Internet services. Here is what Industry Analysts expects on the Application of Wireless Broadband in India - Using Mobile / Hand-held Devices / Laptops etc.
- Mobile banking transactions are expected to be over 340 million in the year 2015 resulting in cost savings of approximately Rs. 11 billion.
- Using Unique ID, a customer who has a mobile phone will be able to open a mobile linked no-frills account.
- Digital music sales are expected to grow at a CAGR of 24 percent between 2009 and 2013 to reach Rs. 3 billion in 2013.
- Online advertising in India is expected to grow with CAGR of 32 percent between 2009 and 2013 to touch Rs 20 billion in 2013.
- With the advent of mobile broadband services distribution platforms such as downloads, streaming and music subscriptions will proliferate. Mobile gaming is projected to grow from a size of Rs. 2.5 billion in 2008 to an estimated Rs. 12 billion by 2013; translating into a CAGR of 36 percent between 2009 and 2013.
- Mobile broadband would also play a role in integrating rural India with other parts of the country and help widen markets, create better information flows, lower transaction costs. Through effective utilization of various mobile broadband based services, farmers are likely to save approximately Rs. 6 billion in 2015.
- Approximately 50 to 60 percent of government services in India can be delivered through mobile channels.
- Rollout of 3G will lead to additional revenue of approximately Rs. 90 billion over the period of 2010-2015 for the IT and BPO industry.
High speed access will enable content developers and aggregators to generate additional revenue by offering diverse interactive content such as videos, interactive gaming etc. Open internet access allowing direct access to subscribers and increasing value proposition of content to customers, will reflect in the bargaining power of content developers and aggregators increasing.
Content will be the key differentiator which will see new alliances being forged between handsets vendors/ operators and application developers to attract new customers. Mobile operators will leverage proprietary content to create customer stickiness. Boundaries may blur, as handset vendors and operators may also enter the content space.
Revenue from 3G related data services for other VAS value chain players is likely to reach Rs.36 Bn in 2015. Equipment manufacturer revenue from 3G roll out is expected to be Rs. 165 Bn in 2015 growing at a CAGR of 72% over the next 5 year period.
The rate of decline in prices of 3G enabled handsets would be a key driver for uptake of mobile broadband. Availability of diverse vernacular content at affordable prices would enable proliferation of 3G services across the country especially rural India. Quality of service would be just as important as content for faster uptake of mobile broadband services, which again would be linked to network congestion and hence spectrum.
However, there are two key challenges that broadband growth faces in India, namely, local loop unbundling (LLU) and low PC penetration. While the above represent challenges from the technology angle, overcoming these will be merely necessary, not sufficient. The primary impediment to broadband adoption will remain content that is both compelling and relevant content LLU is one of the main obstacles in the fast roll out of broadband services in India. This is an issue of lack of access to the local access network where the incumbents own close to 90% of the copper cable network, the most common medium for the access to the customers. The sooner the government makes unbundling mandatory for access by telecom operators on non-discriminatory basis, the better it would be for boosting broadband growth in India. Telecom Regulatory Authority of India (TRAI) has also recommended it as a significant step for speedy spread of broadband services.
Broadband revolution has not only helped in creating a niche for India globally but is now also going to transform the hinterland of the country. We as a country can look forward to a better networked and informed Society sooner than later. Let us strive to improve our Information Communication Technologies - bridge the digital divide in the country - and become an invincible leader and eventually a Super IT Power of the world.
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