Broadband in India is Far from a Reality

Being involved in Startup Saturday Delhi, I have come across a lot of entrepreneurs building Internet applications. Most of them being India centric. The problem, which has been discussed and reported numerous times is that broadband penetration is a miniscule 3% of the whole population. There are roughly 3 million broadband subscribers in India.

Airtel 8Mbps with 4GB Cap
Airtel 8Mbps with 4GB Cap

India being a highly price conscious country, I find it amazing that telcos like Airtel are busy hiking the price of metered “broadband” while degrading service levels. The latest move by Airtel has been to increase the price of their “unlimited” 512k connection to Rs. 1,599 (USD 34) per month. The real kicker is that the speed degraded to 256k after you’ve hit downloads totaling 100GB.

Airtel 512k with 100GB Cap
Airtel 512k with 100GB Cap

At the same time, they are introducing 16Mbps connections for Rs. 2,999 (USD 64) per month that have download caps of 20GB. A single Linux distro download is 4GB. A point upgrade to OS X is generally around 500MB. Buying and downloading a few shows from iTunes or watching a few videos on YouTube and I’ll blow right thru my 20GB limit in a week. If I download roughly 40GB of data in a given month, my Internet access will cost me upwards of Rs. 12,000 (USD 255) per month.

Airtel 16Mbps with 20GB cap
Airtel 16Mbps with 20GB cap

If indian telcos like Airtel were to offer unlimited 1Mbps connections at Rs. 999 (USD 21) and unlimited 2Mbps at Rs. 1,599 (USD 34), the willingness of Indians to spend on Internet access would be much more palatable. Other than those whose careers in some way, shape, or form are connected to the Internet, very few people are willing to spend more than Rs. 999 per month on Internet access. Those that spend Rs. 999 or less per month, get an experience that basically sucks. They are frustrated and completely turned off by the fact that it takes 20 minutes to load a 3 minute video on YouTube.

India will never be a country of mass Internet adoption while the government agencies like TRAI and DoT don’t adopt a definition of broadband that is more inline with shifts in Internet usage. Indian telcos continue to provide subpar speeds at exorbitant prices when compares to the rest of the world. India, touting itself, as the technology center of the 21st Century, must adopt an infrastructure and a coherent policy around broadband deployment and usage. Only with the government mandating the need for widespread Internet adoption, at feasible price points, will there be widespread broadband adoption by non-techies.

However, relying on the government to be so forward thinking is a pipe-dream. What the Indian telcos should do is adopt a model that was instrumental in driving mobile usage in India. Drop the price points so that even the average person (living on Rs. 100 per day), would find Internet usage compelling, useful, and not frustrating. If they were to adopt a mass usage policy and not price their broadband products based on margins, I believe that in 5 years, India could have at least 100 million broadband users (via DSL, cable modem, Mobile 3G, wiMax, etc.) Is it too much to ask the Indian telcos like Airtel, MTNL, BSNL, Tata Communications, Reliance, etc. to push the envelope of adoption? Unfortunately, I think it might be.

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