Trai recommends nondiscriminatory local loop unbundling

MUMBAI: The Telecom Regulatory Authority of India has recommended nondiscriminatory local loop unbundling (LLU) in a time bound manner for both Shared Unbundling and Bit Stream Access, to promote quick growth and create immediate competition in broadband services.

It has also set a target of 20 million broadband and 40 million internet subscribers by 2010.


The recommendations on the growth of Internet and broadband in the country, released today, add that since broadband using digital subscriber lines (DSL) are going to play a significant role in driving broadband growth, 'it is important to have contribution and competition from other players for the incumbent to focus strongly on rapid roll-out of DSL services, and achieve the desired growth with the most value to consumers.

Since virtually all of the copper local loops are owned by the incumbent, giving nondiscriminatory access to this bottleneck facility for use and investment by other operators becomes crucial.

While the Trai is currently not in favor of Full Local Loop Unbundling at this point in time, it recommends shared unbundling to achieve competition in the market. While such unbundling would work only for data services, 'one needs to address the concern raised due to the possibility of the access seeker providing voice services over those data services', the recommendations add.

To promote quick growth and create immediate competition in broadband services, nondiscriminatory LLU should be executed in a time bound manner for both Shared Unbundling and Bit Stream Access, the recommendations note. The owner of the local loop who is a unified access or basic services access provider (LL Operator) will have the opportunity to decide in which exchanges they want to make the investment to upgrade the infrastructure for their own use as well as for providing Bit Stream Access to access seekers, it says. 

The Authority has however made it clear that it would not insist on unbundling of new infrastructure which is less than five years old.

If the broadband connections achieved in the first year are less than one million, then a review of the above specified arrangement would be conducted to consider other modes of local loop unbundling, it adds.

The target set by the Trai translates to penetration levels of 1.7 per cent and 3.4 per cent for broadband and internet subscriber growth, respectively, which the Trai says is a bare minimum target and will need to be upgraded as progress is made.

Among its other recommendations are decreasing the level of duties on mobile phones, the current overall levels of duties for imported items used in broadband networks, and equalizing duties, providing the appropriate tax structure to enable faster growth, without the government having to forego significant revenue.

Once these recommendations are implemented, says Trai, India can reach broadband penetration levels that are 50 times where we are today within a couple of years. The growth that has been witnessed in a few years in India in the telephony space and in Korea in broadband, can be replicated and surpassed.

Quoting the Confederation of Indian Industry's estimates that iinvestments of at least US$2.6 billion by 2010 and US$5.35 billion by 2020 will be needed to achieve the goals they have set for broadband services, the Trai says this would include investment in urban networks, domestic and international backhaul, content delivery mechanisms, content and application development, and rural build-out. The content and applications would include a full gamut of services including education, health, governance, local language web content, and new broadband-based entertainment like games and videos.

Broadband connectivity should be defined as An always-on data connection that is able to support various interactive services, and has the capability of a minimum download speed of 256 Kbps, says Trai, a figure that would increase the attainable market for 256 Kbps broadband services to 20 million by 2010.

In December 2002, the top 10 countries in terms of broadband subscribers realized on average 14.4 per cent of their total internet subscriptions from broadband. "While this seems a low percentage, newer growth countries like China and Korea saw tremendous growth in that value, reaching 17 per cent and 96 per cent, respectively, by the end of 2003, compared to 4 per cent and 38 per cent the year before.

This is the likely path that India will take. With the low quality of service and high cost of dial- up connections, Indias ratios are likely to be more in line with the trend that China and Korea are displaying than with the US (13 per cent in December 2002), where there is high quality dial-up based on low cost flat rate access. Taking this into consideration, broadband subscribers in India are likely to be 50 per cent, or even more, of total internet subscribers.

Targets for Internet and Broadband Penetration

Year Ending    Internet subscribers number    target % penetration    broadband subscribers number    target % penetration

2005    6 million    0.6%    3 million    0.3%

2007    18 million    1.6%    9 million    0.8%

2010    40 million    3.4%    20 million    1.7%

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