With the current growth rate of mobile subscriptions, India is the clear global leader in mobile net additions, but its broadband sector still has not met market expectations. Due to poor fixed line coverage, low PC adoption, and service pricing, broadband service has not been embraced by Indians in the way mobile phones were.
However, the ministry of communications and operators intend to change that by labeling 2007 the “Broadband Year,” hoping to reach a 20m broadband subscribers by 2010. With the help of telecom and PC manufacturers and operators’ deep pockets, the government believes their goal can be achieved. Pyramid Research argues that the country’s broadband aspirations will not be achieved for 2007, however it will exceed its 2011 target.
Service providers will be more aggressive with their broadband offerings to consumers and business customers in 2007, with massive investment plans. BSNL, the state-owned incumbent, announced its “Broadband Year” strategy by setting its target to connect 50m broadband users by 2007.
SitiCable, a cable operator, plans to connect 8.7m households by 2010. Pyramid Research expects the majority of these broadband subscriptions to be GSM/EDGE subscribers from BSNL’s mobile arm, as the operator is investing heavily in its mobile network. On the fixed side, the BSNL intends to deploy more than 6m DSL lines, and the operator has also awarded Alberto Networks with a WiMAX contract to supply the operators with a high-capacity WiMAX base station.
Major customer equipment subsidization programs will be installed to overcome the overall ownership costs for potential subscribers. Reliance will be providing B and C class towns, with the bare essentials—a low-cost PC and a free fixed-wireless phone. Furthermore, the government announced major investments to further subsidize costs for rural customers. In addition, MTNL will be subsidizing its customer equipment units to help make broadband service affordable.