BT dot.com: Waiting for broadband

BT DOTCOM: COVER STORY
Waiting for broadband

The market for broadband is yet to bloom. Companies could kickstart interactive training and communication, but the experiments with access are far from over.

By Pooja Garg

What's Hot!

Let's get something straight: two-way, high-cap, super-speed services on the Net aren't today's story, nor tomorrow's. Broadband services float somewhere in the distant future. Initial estimates of the depth of broadband services-typically defined as bandwidth over 2 mbps, though it could be (only in an Indian context!) anything above 128 kbps-in the US have been highly exaggerated. In India, which is grappling to achieve basic levels of connectivity on what is dubbed the World Wide Wait, the situation is bleaker. Quite frankly, broadband is a luxury. Frost & Sullivan reports that broadband internet access services account for only 2.4 per cent of the total internet access market in 2000.

Says K.V. Seshasayee, President of the Hindujas' TMT Group: ''Bandwidth will be available by the end of next year, but broadband services will be available in niche areas, in pockets in cities.'' Agrees Vijay Yadav, CEO, 3Com India: ''The uptake will be very high once services start to happen, but it will only be in certain pockets.'' The bottomline: expect few subscribers over the next couple of years. Frost & Sullivan predicts that there will be 82,000 broadband subscribers in 2005. That's a compounded annual growth rate of 39.4 per cent. Hardly spectacular.

Why then, you may ask, are we filling up these pages with a future that sounds great but doesn't download in the blink of an eye? There is a reason: with initial trends pointing to a minuscule consumer segment for broadband services, it is corporate India-which has always struggled to make data ends meet-that is looking at broadband with interest. Delhi's Spectranet says that 90 per cent of its clients are companies. At one level, there are great opportunities in handling and transmitting information in an effective manner. Then, of course, the Net is more than just a delivery mechanism.

As Things Download

The Wider Angle

Broadband services are a luxury as uptake will be in pockets

Corporate usage of broadband will overshadow pure consumer interest

Most firms are dabbling with a combination of various access media

Slowly, firms will use broadband to train or communicate with employees

A few software firms and TNCs will begin webcasting AGMs

On the street, corporate India is dabbling with various access media, from VSAT networks and DSL to ADSL, leased lines, and optic fibre cables. As of now, cable modems and routers (up to 256 kbps) are the most popular access vehicles. Another option (used by the likes of Ericsson and HLL) is taking the route of a direct fibre link. Then, DSL is not a popular option at the moment, though reports estimate that demand for the service will pick up in fiscal 2002. So, India Inc is experimenting. For one, there's the time factor (both the options of VSAT and leased lines, for instance, take about six months to INSTAL) and availability.

So, it's mix and match. Media and advertising companies have been the first to embrace higher bandwidth. Lintas, for instance, has a leased line between Delhi and Mumbai, which it will probably replace with a fibre link at the end of a year. For now, the other locations will remain on isdn. Manufacturing companies, with widespread locations and depots, are the next in the uptake queue. A typical model is Dabur India's, which uses VSAT for its far-flung locations, leased-lines, and microwaves in the metros and other cities, and a 256-kbps link in Delhi. Other large FMCG firms, like HLL and Asian Paints, prefer to wait until fibre is available in more cities across India before marking investments.

Clearly, it will take decades for broadband data connections to become commonplace in corporate India. While there is a small Indian market for audio/video media applications and video streaming, experts have identified broadband applications across six key industry segments. They are, media, distance learning, CRM, finance, live events, and healthcare. However, as of now, this is a chicken-and-egg situation. Broadband consumers need to have access to bandwidth. Why, even simple video or streaming e-mail requires big-ticket bandwidth. Trust me: watching a 800-kb clip over a dial-up line can be pretty frustrating.

The B2E Market

The Near Future

Corporate India is not used to a data spigot that is constantly open, sans the usual delays and busy signals. While Indian companies will stagger their infrastructure requirements in keeping with, well, the state of the infrastructure, a few forward trends are visible. Initially overjoyed with fast downloads, and easy communication, firms will expend their energies in video messages (watch out for marketing initiatives here), and internal communication and training. There will be a digital divide between the corporate office and the outposts. And, yes, finally a caveat: there is never enough bandwidth.

That leaves, for the medium-term, a door for interactive experiences in the B2E (business to employee) market. The obvious areas to use broadband are internal job training and communication, presented interactively. There are, however, no known instances in corporate India thus far, though everyone appreciates faster downloads, and better e-mail access. However, broadband-friendly applications, like video webcasts, instant messaging, and web-radio are only found in a few software companies (NIIT and Wipro are examples). Typically, Indian firms on the cutting edge of technology rely on satellite connections to transfer data. The changeover will take some time.

While obvious applications-like the webcasting of annual general meetings-have yet to take off in corporate India, a beginning has been made by some companies. Recently, NIIT webcast its Annual Day by connecting 15 locations all over the world. Wipro recast its third quarter results early this year. Delhi's Escorts Heart Institute, which had webcast an operation two years ago, now plans to implement active webcasting and video-conferencing.

Of course, there's tremendous potential for governance. Says T.S. Mohan Krishnan, Research Director, IMRB: ''Generally, government officials carrying on projects in remote locations could contact their head-office through video conferencing. It cuts down on the cost of travelling to the head-office, besides saving on time.'' Why, even the staid Life Insurance Corporation (LIC) has marked a beginning by taking up a cable modem link for its corporate office; it plans to have 33 cities on leased lines soon. Slowly, but surely, corporate India will start dreaming in broadband.

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