Broadband is a growing market. Technology is evolving quite fast. People have realized that once you have tasted broadband then you would want the speed to be as high as possible.

Currently, the total number of broadband subscribers is 6.62 million as per the latest figures released by TRAI. BB density in March was 0.54. Around 6.5 percent of households overall in the country have internet access, which includes dial-up connections, broadband and so on. Out of these, connections with speed 2mbps and above make up only 3.7 percent of the overall number of subscribers even out of the broadband figures. Compared to anywhere in the world these are very dismal numbers. We are lagging in terms of subscribers as well as speed.

On growth drivers

Before we address this question, we have to look at what is actually holding us back. What are the challenges being faced by us? The biggest challenge is in terms of allocation of spectrum. If the allocation for 3G and WiMAX happens on time, then we can expect some spur in activity on the next generation networks roll-out front and therefore, in broadband connectivity. The other challenge we have is in terms of the number of wire line connections in the country, which is rapidly decreasing. From December 07 to December 08 we have lost 1.8 million wire line connections because people are moving on to wireless handsets as they don't see any value-add coming in. The other challenge is in terms of PC penetration. Only 3 percent households in India have a desktop or a PC. So you can't really have a broadband connection unless you have a device which can access that connection. PC literacy rate is also quite low. People have PCs but how many of them are literate in terms of using a PC?

If you look at mobility, the big spurt in growth happened because people saw value in terms of voice connectivity and other services like SMS, MMS etc. If we have to grow, we need to have very good business-to-consumer and business-to-business kind of services, which push the demand for broadband connectivity. For e.g., railway reservation is one such big push for internet growth. People preferred this over going to the railway station. So we need some impetus like that. If we have answers to these questions then we have the answer to your question on what will drive growth.

On recent trends

Broadband is a growing market. Technology is evolving quite fast. People have realized that once you have tasted broadband then you would want the speed to be as high as possible. The recent consultation paper from TRAI also suggested that we should look at broadband at 2mbps capacity rather than 256 kbps capacity, which was the earlier definition. From the technology perspective, people are looking at multi-service edge routers, which implies having the router as close to the customer as possible and moving to layer 3 connections rather than a layer 2 or TDM connection all the way to an internet exit point. There is a lot of transformation in that area. We also see people rolling out carrier ethernet networks because the speed requirements are quite high from broadband perspective. With more and more broadband subscribers being added every day we are seeing very decent amount of P-2-P traffic coming in. Earlier it used to go out of the country because of internet exit points but now most of the traffic stays within the country as there is a lot of expansion in Indian networks.

On growth of the market post the spectrum auction

It will give a huge push. Until now you have just two-three ways of accessing broadband–either through wire line or wireless. In wireless you have an option between a 3G and a WiMAX network. There is cable also but the market is immature and too fragmented. Within wire line you have options between last mile over copper. However, that is diminishing. Most operators don't see the business viability of rolling out copper networks all the way to subscriber premises. 3G and WiMAX is the answer to the problem. Once the auction happens India's hunger for broadband subscribers will be sated.