Broadband is a boon for India, but there is a huge digital divide. Sixty per cent of India's population is in the villages and today telecom operators are reaching everywhere, so are their networks. Broadband can play a pivotal role in the growth and development of the country. All that is needed is a focussed local-level effort from all the players.

The internet revolution and the advent of 'anytime, anywhere connectivity' requires today's communication networks to address performance and architectural requirements like scalability, robustness, reliability, affordability, manageability, being future proof etc. Broadband communications offers all this and can cause a dramatic change in the way we communicate. The business world has for long had to contend with legacy business models, legacy technical infrastructures, and legacy regulations. Fortunately all that is set to change.

The internet and the Web will be important drivers for the broadband market. Innovative and new internet-based applications are prompting consumers to go for broadband access. Typical applications include online shopping and electronic commerce, both for home and business segments; internet telephony, video telephony, entertainment, gaming (including gambling over the internet) etc.

Bandwidth has been of critical importance and continues to play a crucial role in the evolution of broadband networks. Several factors have caused users, both home and corporate, to thirst for greater bandwidth.

Broadband has seen an early success in countries like the US and Europe. It has demonstrated that it has the capability to drive the economic growth. The example of Korea is a proof. This success story can be rewritten in India provided the end user gets flexi plans along with lower tariffs.

Compared to China, India is lagging far behind in terms of broadband connectivity. The number of broadband subscribers in India crossed 13.1 lakh as of March 31, 2006, and each month the numbers are increasing by over one lakh. According to Ovum, the analyst and consulting company, China will overtake the US to become the world's biggest broadband market, in less than a year. China's broadband sector has been growing dramatically at a compound annual growth rate (CAGR) of 79 per cent, over the last three years. The strong growth will continue to boost the broadband market, which will reach 79 million subscribers by 2007. India has one of the lowest broadband penetration rates at 3 per cent, while Korea and Hong Kong rank the highest with 62 per cent and 57 per cent respectively.

Unlike the online service providers in the US or Western Europe, the growth of the online service providers in India has started tapering off. Major factors affecting the growth of internet access in India have been partial deregulation of the telecom sector as opposed to complete liberalisation, a narrower home PC base, a high level of price sensitivity among the target audience, and a lack of effective exploitation of the online services for delivering content. For these reasons, private sector service providers are slowly becoming marginalised in India. Any emerging country which wants to exploit this medium successfully needs to keep these constraints in mind while planning for the future.

Content is king

Premium online content applications such as music, video/movies and gaming offer broadband service providers a significant competitive advantage in a market where participants have largely competed on speed and pricing. Online gaming is undoubtedly the most popular of these applications, currently accounting for the bulk of market revenues. Music and video are fast catching up and becoming increasingly popular among broadband consumers.

Localised content is also important as it broadens the target users of broadband, who are not necessarily urban and English speaking. This would also help the rural populace in implementing and adopting the policies of e-learning and e-governance.