If you thought that budget has provisioned a paltry '500 crore for the project then, well, that’s the way it should be.How?
Deepak Kumar | July 14, 2014
The budget has allocated '37,850 crore for road building. Before that, the railway budget proposed setting up a diamond quadrilateral network of high-speed trains, noting a need for a stupendous '9 lakh crore for making the project happen in reality.
For the ‘Digital India’ project, the government mentioned allocating a fund of '500 crore. Worse, as against around '7,000 crore required (and reportedly asked for) in the budget for schemes like national optical fibre network (NOFN) under the universal service obligation (USO) fund, '3,537 crore was sanctioned.
What does all this signal? Is the government less serious about making broadband happen? Or is it just that the government doesn’t feel the need to directly invest into broadband infrastructure building and would instead expect the industry to take up the task?
Going by the government’s – and particularly the prime minister’s – penchant for the digital media, one could safely bet that the latter is the reason behind announcing a rather notional fund of '500 crore.
The catalysts at work
Three ongoing developments have bode particularly well for the massification of mobile broadband phenomenon, which the industry has already brought in. (In fact, an undue focus on state-driven broadband development actually creates a conflict of interest between the government and the industry, and is best avoided.)
The first and foremost catalyst, of course, is the rollout of 3G, which has gathered considerable steam and has brought in an impressive 50 million subscribers into the fold of mobile broadband. As of May 2014, India had 49.97 million wireless broadband subscribers, as per telecom regulatory authority of India (TRAI) data.
According to TRAI numbers, this represents a 7.66 percent jump over the 46.42 million wireless broadband subscribers in the preceding month of April 2014. By comparison, fixed-line broadband numbers crawled from a base of 14.91 million in April to 14.95 million in May, recording a growth of 0.25 percent.
Obviously, the market forces are at work in the case of 3G.
And, the 3G uptake is not just about the network infrastructure being in place; it is also about the tariffs, which the telcos had slashed by up to 80 percent after the earlier tariffs had failed to enthuse customers and spur demand. Moreover, the 3G success is also a factor of the availability of access devices, and yet more importantly, at the right price points.
That brings us to the second catalyst for mobile broadband growth – the smartphones and the tablets.
The prices of smartphones have successfully tested and breached all time low entry points and played a critical role in massification of the 3G services in India. Currently, the ultra-budget smartphones are mostly Android powered and carry a retail price of a little more than '2,500. However, with the advent of Mozilla Firefox-based smartphone, the prices could drop to under '1,500, given that a couple of Indian smartphone makers have already announced their Firefox offerings at such price points.
A third important development, which is expected to drive long-term growth of mobile broadband in India but which is right now at a nascent stage in market development, is 4G LTE.
Let’s take a deeper 4G dive
Why is 4G strategically more important than 3G and why has the industry as well as government placed so much emphasis on it? And if it is so important then why didn’t the country try to leapfrog from 2G to 4G instead of investing so much on 3G.
First thing first. 3G takes an evolutionary approach to mobile broadband, particularly in the sense that both circuit-switching and packet-switching layers coexist. The various 3G standards focused on devising roadmaps that allowed GSM and CDMA operators to reach a common minimum broadband point, without really disrupting the existing services or uprooting any of the underlying infrastructure. (That also answers the second question in part.)
It won’t be an overstatement to say that 3G has been built, not grounds up for a truly digital broadband era but as a retrofit for the legacy 2G networks.
By contrast, LTE or 4G LTE, as the marketers love to call it is the first ever all-IP mobile data network and therefore does away with the circuit switching network components altogether.
4G LTE works best when an IP Multimedia Subsystem (IMS) core has been employed, as it is only then that the true potential of LTE can be unlocked. In the absence of an IMS core, high-definition media services, including voice over LTE (VoLTE) cannot be enabled, and the customer experience which is a characteristic strength of the LTE standard, cannot be achieved. (Circuit-Switched Fall Back voice, which is currently being offered at a minor scale in India, is theoretically a poor cousin of VoLTE.)
To be fair to telcos, they have taken an evolutionary approach to mobile broadband and as such their network cores are not ready for an all-IP play that LTE envisages. Also, 4G is not only about the LTE network – the availability of devices, or a lack of that, has an equally important role to play.
As of date, the devices ecosystem for LTE is far from developed, with only a handful of ultra-premium LTE-ready devices available for the 2300 MHz networks currently offered in India. For a mass adoption of LTE in India, the devices at budget and ultra-budget price points will need to become available.
That hopefully answers the second question in full, and also completes the argument why the government should better not invest in broadband infrastructure itself and let the market ecosystems best decide the course.
Yet, staying with LTE
Why? Well, because that’s still the shortest and surest route to a Digital India.
How? Let’s first decode the term Digital India itself.
What does it stand for? Is it more about accessing social media on larger and larger screens or is it more about having a last mile to let masses access various utility-based services including education, healthcare, governance, banking and so on?
Unarguably, it is more about the latter set of services, right? And even better, it should also be about machine-to-machine (M2M)-based services like smart metering and billing, traffic information and guidance systems, or smart cities and buildings. Isn’t it?
Next, if you consider that the government has actually allocated a budget of '7,060 crore for developing 100 smart cities, then it actually is about creating a building block for the Digital India. When we talk about smart cities then we are actually talking about the bigger themes like the internet of things and networked societies. (And that’s where IPv6 must also kick in, simply because IPv4 would simple be unable to serve the new billions—and perhaps trillions—of addresses for the IP-enables machines, gadgets and consumer electronic items.)
That’s also where an LTE last mile would be more effective than other mobile last miles, given that an all-IP nature of the LTE network core would be inherently suited to handle the billions of M2M communications with ease.
(Kumar is founder analyst at BusinessandMarket.net)
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