The math isn't good, the technologies aren't sure shots and last mile seems infinite. The great Indian broadband dream is in danger of coming unstuck.

By E. Kumar Sharma & Ashutosh Sinha

Ashok Juneja, COO, Bharti Broadband "For us, the advantage is that we don't have to be physically present in all the places like DSL."

V. Srinivasan, COO, Dishnt DSL "The costs of bandwidth are expected to come down in the near future."

Broadband And The Tech Maze Dial-Up Modem The most common way to access the Internet. The speed of transmission can go up to 56 kbps, depending on the quality of the telephone line. Rs 500-800 for 100 hours. Cable Modems With 40 million cable homes across India, the potential is theoretically immense. True broadband needs today's one-way cables to become two-way. Up to 10 times faster than a dial-up. Rs 1,000-1,500 monthly. Digital Subscriber Line Old copper lines can be made to really zip-10 to 20 times faster than dial-up-with add-ons. But if lines are shared, the speed can fall sharply. Rs 2,000 monthly. Satellite Broadband Services can be rolled out fastest, anytime, anywhere. Satellite broadband is up to eight times that of a dial-up connection. Targeted in India mainly at companies. Rs 7,000 and above monthly.

Upturned pavement stones and piles of mud still litter the street outside P.G. Padmanabhan's house in Indiranagar, Bangalore. "Reliance said they were laying fibre-optic cable and asked if I wanted the cable brought up my driveway," said Padmanabhan, 60, a retiree. The promise: an always-on broadband connection to the net, up to 20 times faster than his jerky, dial-up line to the local BSNL exchange. A year later, his driveway is intact. Reliance never came back.

India's great broadband promise-the justification for excavating every city-is in danger of coming spectacularly unstuck. Only last year, fuelled by the tech boom in the West, a clutch of India's most prominent companies announced a combined total investment of Rs 35,000 crore in laying ducts for fibre-that promise of communications over light, not regulation copper wire-across 100 cities.

Today, with just 25,000 broadband customers all across India (according to a report from market researcher IDC), those companies realise that the math isn't good, the technologies aren't certain, and the last mile seems infinite. And so, the backpedalling is on.

Padmanabhan's provider, Reliance Infocom Limited, was planning to lay the mother of all fibre-optic networks across 115 cities across India. Though Reliance denies it, insiders say that it will now focus on the 27 top cities and commercial operations, scheduled for launch in June 2001 for the first eight cities, has now been rescheduled to March 2002.

It's that way with everyone who served up the broadband dream. Spectranet, which started the broadband hype by networking Delhi with a missionary zeal, did launch consumer services for Rs 1,000 a month. Burned by its huge investment in laying 170 km of fibre Spectranet isn't adding to its 6,000 customers and is now desperately looking for a buyer. Despite repeated requests, the company refused to talk about its broadband experience.

It won't be easy finding a buyer. Bharti Broadband (from the house of the Mittals), which did talk to Spectranet about a possible buyout, is now focusing on broadband over satellite. After realising it would take years-and piles of money to reach consumers through fibre-Bharti has now discarded rosy new-economy dreams of a pan-Indian cellular-cum-broadband network.

BPL in Bangalore says it is ''in the process of reviewing'' its broadband strategy. The only confident voice emerges from Chennai-based Dishnetdsl, which claims that it could break even in the first quarter of the next financial year.

The Elusive Broadband Formula

As they lurch from crisis to crisis, each company claims it has a business model that can work. But the uncertainties in wiring up India are immense. It begins with broadband technologies-DSL, fibre and satellite, none of which is as yet the one. To make the mess worse, there is no single model for broadband services that has worked around the world.

''At present, the broadband market is still trying to come to terms with reality," says Ritesh Shankar, market analyst at IDC India. "I expect it to look up by the end of next year.''

Right now, it's costly to reach a customer. Dishnetdsl estimates that it costs an average of Rs 45,000 to reach a subscriber on a digital subscriber line (See box Broadband and the Tech Maze). ''We expect this cost to substantially decline as the hardware, back haul and the bandwidth costs are expected to come down in the future,'' says Chief Operating Officer V. Srinivasan, 42. He expects a home user to part with Rs 2,000-there's also the cost of a DSL modem, Rs 10,000-and a business user to pay Rs 6,500 every month for broadband.

Then there's the question of quality. Is broadband really broadband? Since each of these lines already in operation is shared by more than one customer, speeds are sometimes abysmal. Spectranet cable modem owners often complain of dial-up-modem-like speeds at peak surfing times.

The best bet for broadband companies is to look for business customers. Bharti is targeting its satellite services only at large enterprises. With an initial investment of just over Rs 70,000 in basic equipment that he needs, CEO Ashok Juneja hopes to roll out his services in the market faster than those rolling out DSL (based on old copper networks) or fibre. With a recent order for 1,500 terminals from Sahara group, he has just received the initial booster he was looking for. Bharti's prime offering will be bandwidth on demand. ''For us, the advantage is that we don't have to be physically present in all the places like DSL or optic fibre service providers,'' says Juneja.

The costs to a broadband provider begin with excavating roads and laying fibre: Rs 4 lakh per kilometre. Add another 50 per cent to the cost by the time the fibre is lit (industry jargon for activation).

One of the biggest complicating factors: international bandwidth prices. For a 64-kbps connection-barely enough for a roadside cyber café-the cost of international connectivity works out to approximately Rs 25,000 a month, a price that cannot be passed on to a cyber café owner.

Overall, subscribers just aren't biting. MTNL, which charges Rs 16,500 for a 64-kb leased line currently, has 700 users of isdn services; 150 users for 2-mb lines for inter-city data traffic and 3,500 leased lines for intra-city data traffic. That's piffling, and the public sector behemoths never guarantee quality of service.

Broadband companies see this as the key in scoring over BSNL and MTNL, who want to offer what are now premium services (all leased line and isdn services are now being charged premium rates) as a commodity. But it's tough going even for the numero uno Reliance. Refusing to talk about costs, an Reliance Infocom official says: ''We will take fibre up to a certain point. After that, we are still weighing our options.'' In other words, the vexed last-mile problem is nowhere near solution.

Releasing the Light Fantastic

There's no question that fibreoptics are the future of broadband communications in India. They call it the light fantastic, a reference to fibre's broadband capabilities. The pulses of light in the highly-refined glass cores can move more than 100 km without significant degradation. By contrast, typical copper cables of the type ubiquitous all over India, are prone to interference from outside sources and require repeaters every couple of miles to refresh signals.

There are no easy solutions. Even in the US giants like AT&T are struggling with wiring losses. On this frontier, solutions can only come from flexible business models, new technology-and resilience.

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