Bandwidth issues

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Bandwidth issues ICT applications
Deepak Maheshwari Secretary ISP Association of
India
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Agenda

• 1,2,3Lets Talk numbers!
• IT Superpower or ?
• Elephant the Dragon(s)
• Bandwidth Internet
• International Trends
• Policy Regulatory Actions
• Regulatory Intent Actions
• Last Mile The Biggest Challenge
• Pro-Active Regulatory interventions
• Vibrant Bandwidth Market
• Futures, Options (circa 2006?)

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1,2,3Lets Talk Numbers!

• 700 ISP licenses issued so far
• 300 surrendered
• 180 operational
• 6 million Internet subscribers
• lt 0.4 million broadband subscribers
• 35 million Internet users
• Public access the primary and sole access point
  for a big populace
• 256 kbps minimum to qualify as broadband

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IT Superpower or ?
Index / Rank Sponsor(s) Rank Year
Network Readiness Index WEF / INSEAD 42/105 2003-2004
Digital Access Index ITU 119/178 2003
Friendliest Environment for online business EIU 43/60 2004
Maximum no. of Internet users Internet.com others 6-8 2004-2005

• In 2000, Planning Commission targeted 35 million
  Internet subscribers in 2007
• Broadband Policy 2004 has a target of 40 million
  Internet subscribers by 2010
• Large population and internal disparity weigh us
  down

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Elephant the Dragon(s)
India China
Internet users 6 million 100 million
Broadband as of Internet lt8 gt 45

• Broadband Policy 2004 targets at least 50
  Internet subscriptions to be of Broadband type
  in India, w.e.f. 2005 itself
• Less than 20 international traffic in China /
  Japan / Korea
• Mostly local content
• In India, more than 70 Internet traffic is
  international
• Mostly non-local content
• Even domestic traffic is often routed through
  international transit

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Bandwidth Internet

• Worldwide, gt80 international bandwidth is used
  for Internet
• Worldwide, gt50 domestic bandwidth is used for
  Internet
• Broadband access is the key behind continuous
  development of technologies like DSL, cable
  modem, wi-fi, Wimax, 3G/4G,
• Though Internet is a global system, its beauty
  and efficiency lie in keeping the traffic as
  local as possible.

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International Trends

• Bandwidth consumption outpacing reduction in
  prices
• Submarine as well as terrestrial prices down by
  around 50 during last year
• Around 50 further reduction predicted in next
  one year
• E1DS3STM1 price multiples are typically 1410
• Internet traffic growth rates have outpaced
  backbone capacity deployments
• New cables build-up begin with gusto
• Asia is the new fulcrum of activity
• FL-LRIC (Forward Looking Long Range Incremental
  Cost) is the model chosen by most regulators in
  tariff fixation

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Policy Regulatory Actions Towards Development
of Effective Competition

• Till 9th July 1998, service providers had to pay
  double the normal tariff for domestic leased
  circuits
• Thanks to Telecom Tariff Order, 1999 leased line
  tariff came down by upto 93 overnight, w.e.f.
  1st April 1999
• Competition in NLDO introduced in 2001
• Leasing of Passive Active Infrastructure
  permitted
• Competition in ILDO introduced in 2002
• No separate category for Passive Active
  Infrastructure
• Broadband Recommendations dated 29th April 2004
  recognised that bandwidth constitutes major cost
  for Internet Broadband services
• IPLC tariff ordernotified on 11th March 2005
• Domestic Leased Circuit order notified on 21st
  April 2005

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Regulatory Intent Actions

• Broadband Recommendations dated 29th April 2004
• Access providers of local segment of leased lines
  to be mandated to provide the local links to
  NLDOs IP-2
• The Authority views access to international
  bandwidth as a bottleneck facility and will take
  appropriate actions
• Telecom Tariff Order, 1999 dated 9th March 1999
• International Leased Line tariffs forborne though
  no reasons recorded
• The Authority will review leased circuit tariffs
  again after one year in order to take account of
  the decline in costs during that period
• Domestic Leased Circuits Tariff Order dated 21st
  April 2005
• The Authority will revisit this ceiling tariff
  after a year based on the prevailing market
  trends and data prevailing at that time

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Last Mile the biggest challenge

• gt90 fixed (copper) lines controlled by incumbent
• Unbundling is usually under the
  Interconnection regime in most countries but
  rather than dealing with it head-on, TRAI
  forwarded a complex set of recommendations on
  unbundling at least 3 year old copper pairs
• However, unbundling not recognised as a
  bottleneck in the Broadband Policy though
  operators free to enter into commercial
  agreements
• Commercial agreements could always happen and did
  not require policy annunciation per se
• Regulatory intervention required in sharing
  infrastructure of this natural historical
  monopoly of the copper pair in the last mile
• Cable
• Though technically, cable is ultra-high
  Broadband capable, mostly uni-directional and
  requires investment in upgrades
• Wireless
• Wi-fi, LMDS, MMDS, CorDECT, Wimax, 3G, 4G, ,
• Incentives needed for making wireless attractive
• Pricing reform decongestion

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Pro-active Regulatory Intervention

• Regulatory intervention required if the market
  fails
• TRAI has recognised market failure and
  ineffective competition for both IPLC DLC,
  albeit lately
• To be effective, the intervention must be fast,
  effective, minimalist exemplary
• Incumbent ignored and continues to do so, TRAIs
  intervention against discriminatory pricing of
  leased circuits to other telecom licensees
  introduced w.e.f. 1st April 2004
• Further steps to be taken for boosting
  competition
• Equitable access to submarine cable landing
  facility by all ILDOs ISPs
• Introduction of Infrastructure Providers in
  International Sector as well
• Leasing of dark fibers Wavelengths are quite
  common
• Guard against Vertical Price Squeeze

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Vibrant Bandwidth Market Futures, Options
(circa 2006?)

• TRAI recommendation on Unified Licensing Regime
  dated 13th January 2005
• The Authority recommends that reselling should
  not be permitted at this stage
• TRAI order on Domestic Leased Circuits dated 21st
  April 2005 Measures to Promote Competition
• Inter-connect of operators for provisioning of
  multi-operator leased circuits
• Introduction of reselling of bandwidth
• Introduction of wholesale and retail pricing

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