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India is the only country in the world where there are more cable
TV than fixed line subscribers. Cable TV, in fact, has 1.5 times
more connections. "There is a wide market out there which is
yet to be explored. Competition can only drive this," he said.
Broadband is growing at a snail's pace in India. There are almost
47 million last mile copper lines of which 30-35 million are broadband
capable. Though the government has set an aggressive target of three
million broadband connections this year, we have just achieved .2
million with the incumbent and .3 million with the carriers. By
the end of the year, we will have .7 million, way below the plan.
"Broadband and rural telephony are not growing. Unless a critical
mass comes in, broadband can't grow," he said.
Though prices have fallen, the broadband users haven't grown. The
reason for this, Baijal says, is lack of competition. It is important
that fibre is priced properly. But the main incumbent - VSNL- is
not prepared to share that fibre, thinking it is a goldmine. The
incumbent has 70 per cent of the broadband market.
There is an explosive growth in the urban telecom sector but the
challenge is to speed up teledensity in the rural areas. Rural broadband
has succeeded with projects like e-Chaupal. "If that connection
can be given to telephony and IPTV, there is huge growth potential
for the telecom and broadband sector," Baijal said.
Teledensity in the rural area was less than two per cent, which
could go up to three per cent next year, while it was 32 per cent
in the urban areas. Though teledensity is still low at 10-11 per
cent in this, it is growing fast in urban areas. "In Mumbai
it is 55 per cent while teledensity in Delhi is 45 per cent. The
rural area, which is guided by the government sector, is the problem,"
he said.
The answer is to install mobile towers and facilitate quick entry
into mobile telephony in the rural areas. This would require an
investment of Rs 90 billion from the government. Otherwise, the
fund requirement would be Rs 300-400 billion to achieve four per
cent teledensity in rural areas by 2010.
"The mobile tower has not reached the rural areas. That is
why there is no growth. If this policy continues, this will bring
disaster to the telecom sector," Baijal said.
Rural India needs mobile telephony rather than pushing fixed lines
through subsidies which can't be sustainable. "Mobile coverage
in India is just 20 per cent. There is an instrument available to
increase teledensity both in the urban and rural areas," Baijal
said.
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