I.B.M. will supply the computing technology and services for an upgraded cellphone network across 16 nations in sub-Saharan Africa. Its customer is India’s largest cellphone operator, Bharti Airtel, which paid $9 billion a few months ago for most of the African assets of Kuwait’s Mobile Telecommunications Company, or Zain.

Under the 10-year agreement, I.B.M. will handle customer service for Bharti and provide the hardware, software and services to run everything from billing and call-traffic management to delivering new services like music and video. The deal takes the broad partnership between Bharti and I.B.M., begun in 2004, beyond India. I.B.M. is not disclosing the dollar size of the deal, but analysts estimate it at more than $1.5 billion over the decade-long span.

It’s a huge challenge for the world’s fastest growing telecoms market where broadband penetration remains a national embarrassment. India is plugged with nine submarine cables: Tata Communications’ five, Bharti’s two, Reliance Communications’ one and another network belonging to a Bharti-Reliance consortium. Each of these conglomerates also own and operate respective web of domestic backhaul.

Local and foreign long distance carriers, having no such ownership, buy wholesale bandwidth from these undersea cable owners and retail it to the consumers. But the cable owners seem to have been taking the underdogs for a pricey ride. Recently the latter has urged to regulate the wholesale bandwidth prices. Can regulatory intervention guarantee competitive bandwidth prices in India?

According to the Telecom Regulatory Authority of India, bandwidth owned by various gateway service providers such as VSNL, Reliance Communication and Bharti has gone up to 12.7 Giga bytes in March 2006 compared to 6.5 Giga bytes at the end of the previous financial year.

Explaining the growth, Mr Kiran Karnik, President, Nasscom, said: “Bandwidth requirement is largely being driven by the IT industry, particularly the BPO sector, and also rapid Internet adoption at homes. In addition, it is being fuelled by requirements of a growing economy. Everything is moving towards data and companies that are not IT organisations but are purely into exports, also need to rely on electronic invoices rather than physical invoices, when trading with overseas firms. Moreover, exporters now have the option to send pictures of the sample product (item to be exported) to their overseas clients. Today’s bandwidth needs also revolve around International Trade. The cost of laying fibre has come down due to technology. There is a strong demand story from India.”

Broadband

The Internet Service Providers Association of India (ISPAI) pointed out that the dial-up Internet users have grown by 24 per cent to touch 6.9 million users, however, the growth in broadband services is the real driver for the increase in international bandwidth.

“Broadband needs more capacity than a dial-up service. Broadband services have grown by over 600 per cent with 1.5 million subscribers compared to a few thousand in 2005. That apart usage of Internet services such as leased lines and Net telephony has also increased considerably,” the ISPAI said.

Internet Telephony has crossed a billion minutes during the fourth quarter of 2005-06 compared to 58 million minutes in the previous quarter.

All of the voice calls on the Internet are international calls. Adding to the bandwidth consumption is the leased line Internet services such as Virtual Private Services.

The number of leased line connections has increased to nearly 15,500 compared to 12,200 last year.

http://www.blonnet.com/2006/07/14/stories/2006071402630400.htm