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?

TRAI has recently come out with its recommendations on Growth of Telecom services in Rural India (www.trai.gov.in). It is an insightful attempt to address the anomalies of the current universal service obligation (USO) regime for the provision of rural telephone subsidy. In this article I describe the main lacunae of the current USO policy and outline how TRAI’s proposals ameliorate these flaws; the interested reader is directed to an independent research study that reviewed the current rural telephony subsidy mechanism. (read more…)