Road to faster Net: Pvt cos take lead
Tuesday 02 January 2001 | Updated 0038 hrs IST 1408 EST
economictimes.com
<em>Note this article is dated 1/02/01.</em?
Team ET
IF you are already exasperated about the number of times the road in front of your house has been dug up, things are about to get a lot worse.
Roads will be dug up, traffic disrupted, sewer lines will be broken, and this will happen over and over again as multiple players get their fiber optic networks into the ground in Bombay, Bangalore, Delhi, Hyderabad, Chennai and Pune in the coming year.
For the internet crazy, the payoff for stumbling round potholed roads is 24-hour Internet connectivity at speeds much faster than possible today. Broadband is defined as the ability to provide Internet access at speeds of 200 kbps, more than four times faster than the 50 Kbps speeds possible through conventional telephone lines.
A lot of investment is needed to make this happen. A rough estimate of the total investment committed to optic fibre or broadband networks across the country puts the figure at over $4 billion. This is despite players like BPL calling off plans and the ambitious Sankhya Vahini project, a DoT initiative, having long been relegated to the recesses of public memory.
An ET survey reveals that after the BPL pullout, the major players who are still committed to building fibre optics include Bharti-Singtel, Enron India, BSES Telecom, Reliance Infocom, Hughes Telecom, Dishnet DSL and Spectranet. While some of these players have decided to concentrate only on rolling out networks, others like Reliance Infocom, Enron and BSES Telecom are keen on getting into the content and data centre business as well, particularly the matter.
Nasscom pegs the investment commitment at a more conservative $870 million. The primary reason for this is that the association pegs Reliance Infocom’s commitment at only $75 million. It estimates that over the next 18 months around 10 gbps of capacity will be put in place by the private sector alone.
Nasscom president Dewang Mehta is of the view that the infrastructure put in place by state governments will be in place well ahead of Sankhya Vahini. “Nasscom has in fact effected a change in policy whereby it will work more closely with the state governments on establishing individual backbones. The Sankhya Vahini project has not been abandoned but we are also looking at other developments in this space now”, said Mehta.
Sankhya Vahini is a joint venture between the DoT’s corporate arm Bharat Sanchar Nigam and IU Net, a subsidiary of Carnegie Mellon University, which has a 49 per cent stake. BSNL has a 45 per cent stake in the project and other shareholders include the ministry of information technology and the ministry of human resources development. It was slated to be the country’s first high-speed Internet backbone and proposed to link over a 100 universities and subsequently corporate bodies, schools and hospitals.
While the government deliberates over the fate of the project, year 2001 could well be the year when the private sector steals an edge over the Centre’s initiative.
Maharastra alone will see concentrated investments being made in broadband by as many as three large players —Enron Broadband Services, BSES Telecom, Hughes Telecom and Reliance Infocom. Of the three, Hughes Tele.com has worked out an investment plan of about $700 million for the whole gamut of services ranging from basic telephone services to broadband connectivity. According to Hughes Tele.com senior executive vice-president George Varghese, “The Hughes network is a converged platform and broadband is only one part of that platform.” EBS is currently doing a technical feasibility of building a 5000 km fibre optic network linking key cities in the state. The company does not have plans to get involved with the content side of the business.
The telecom subsidiary of power utility BSES, BSES Telecom has a three-phased broadband plan in place. In phase I, the company will concentrate mainly on the Mumbai suburbs where its parent has a right of way. In phase II it will expand into south Mumbai using the BEST optical fibre network. Phase III would be a national level expansion. “The three phases need not be sequential. We have already invested around Rs 50 crore in a pilot project in the western Mumbai suburbs. Since the internet is a collaborative world, BSES Telecom will also invite alliances to provide content over this broadband network.” said BSES Telecom’s Chaukar.
Reliance Infocom has drawn up an ambitious $3 billion (Rs 15,000 crore) project which envisages a broadband network linking 115 cities. This investment includes investment in data centres, terminal equipment and content related services.
Reliance estimates that its nationwide backbone will be in place by the end of 2002. A Reliance spokesperson said, “Reliance will roll out its services in a phased manner starting from the next financial year. Rollout of services will be based on market revenue potential.”
Skumars.com had also announced plans to set up a massive Rs 1,500 crore VSAT network to enable remote access. The company has recently acquired the infrastructure provider license from the government and plans to buy and sell bandwidth also. The Skumars.com network can be also be classified under broadband though it is initially targeted only at access.
However, the Skumars.com project is reported to have been considerably scaled back. Though most players have announced investment deployment plans from early 2001, most prefer to maintain a low profile when it comes to giving out exact details on deployment schedules. Some like Subhash Chandra’s Zee Telefilms has gone noticeably low-profile after announcements of a 26-city spread in June this year. The company has apparently already started laying fibre at six locations in Delhi, West Bengal and Andhra Pradesh.
Players as well as analysts are however unanimous in the view that one year is too short a timespan to assess the true impact of broadband on the mass consumer. Broadband infrastructure is virtually non-existent in India today forcing potential users of the capacity to postpone their plans on this front, said analysts.
A recent example is Hong Kong-based Pacific Century CyberWorks (PCCW), which has decided to hold plans to push its broadband convergence platform Network of the World till there is adequate infrastructure available. The worrying aspect is that time may be running out. Apart from the huge requirement for institutional uses, even many portals in India require the bandwidth. While they have the software to deliver high-bandwidth content like video streaming, there is no infrastructure to support it. In the coming years, the most critical aspect will be to get that infrastructure in place.
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