The usage-based pricing model, which is used widely for billing retail customers, is hampering the growth of local content and services in India. “In contrast, a flat-rate pricing model would spur demand for broadband services and enable content providers to target the local and emerging market,” argues Ashwin Gumaste, James R. Isaac Chair at Computer Science department in the Indian Institute of Technology-Bombay. His statement has hit the front page of The Hindu.
It happened after his thought-provoking article – On the State and Guiding Principles of Broadband in India – got published in the current issue of IEEE Communications Magazine. He and two co-authors have blamed “lack of proper regulation, skewed competition, and mismanagement rather than technical constraints” for the low penetration of broadband in India.
He said India had nine submarine cables and six cable-landing stations with a total design capacity of 18.6 Tb/s until early 2007. Ashwin Gumaste estimates about 500+ Gb/s is made available to enterprises and institutional customers, thereby resulting in 155+ Gb/s-capacity to a nation of 1.2 billion people. And he explains the consequences:
“Hypothetically, at an average user-utilization factor of 25 (1 in every 25 users is online at a given time), if we were to distribute this approximate < 200 Gb/s of bandwidth in the population above the age of 18 (which is about 800 million), each person would get 250 bits per second of net connectivity and 6.25 kb/s of shared connectivity (at 1 out of 25 users being active). Given that about 500 million of those individuals have no access to computing resources (falling below or just above the so called poverty line of earning around $2 USD per day), would imply a net 667 bits per second of bandwidth — less than 1 kb/s, thus allowing 25 kb/s or so of shared connectivity to the 300 million plausible users.”
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Rohan Samarajiva
LIRNEasia research suggests that a flat-rate, all-you-can-eat model will not serve the bottom of the pyramid. But this discussion should take place, here and elsewhere.