Just came across this article today on The Economic Times. I was stunned, the GoI is planning to provide free broadband access with access speeds of 2Mbps. This is on the lines of the free municipal bonds that exist in the US. So, what does this mean for the ISPs, how are they going to survive? We will have to wait and watch the reaction of ISPs to this decision.
Since BSNL and MTNL will be the ones providing this service it will surely affect their business as well. But, I think that this will come with the usual caveat of data transfer limit that will be imposed. So, MTNL and BSNL will not earn revenue from its lowest spectrum of subscribers who subscribe to those data transfer limit plans.
The private ISPs will then purely compete on service and the value add ons they will be providing, I think even BSNL and MTNL will try to do a quad play on this and will provide value added services like say movie/games/audio on demand for a fee. They could also stream IPTV over this and charge for the same on the lines of Pay Per View. Also, they could also add VoIP services to allow people to call up abroad as well as India.
This will lead to a consolidation in the ISP market. Small regional players like Pacenet, Exatt, etc will be killed, this is for sure. Also, players like Sify who are now dependent on local Cable TV Operators (CTOs) for providing services will have to change the way they provide service, the move is surely towards Wi-Fi, though the technology that can be used maybe different. No idea whether it would be WiMax or the normal WiFI 802.11 standard.
I think, Intel India will now try and push the Govt. to adopt WiMax on a large scale for this service. So will other players like Cisco and Juniper who will push for their wireless products. The equipment manufacturers will also come into play and try to push for their wares.
We would need more clarity to come in before deciding on how the industry is going to be affected. This is going to be exciting times for the broadband industry, some may die, some may join hands, some may prevail. But, broadband as we know today will not exist come 2009, if (and I think it will be a big IF) this proposal goes through. There is too much at stake here and in money terms, billions at stake and there will be both strong advocates and opponents of this proposition, who will win, we will have to wait and see.
May 3rd, 2007 at 5:17 pm |Quote|
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