ISPs Expect Bandwidth Supply Boom - Internet service provider - Industry Trend or Event

Telecommunications, Nov, 2000 by Aparna Achar

NEW DELHI--A slew of liberalized telecom policies announced by the Indian government last month is expected to trigger a bandwidth boom. They include:

* Privatization of the national long-distance market;

* Permission for ISPs to set up their own submarine cable landing stations for international gateways;

* Allowing use of Ku-band in both Indian and foreign satellites; and

* Permission for ISPs to share bandwidth with other ISPs.

India requires 10 Gbps of international bandwidth but only 325 Mbps are available, according to a recent study by the National Association of Software and Service Companies. Domestically, only 34 Mbps of bandwidth are available on major routes. A recent study by Arthur Andersen concluded that the broadband market opportunity in India will be worth US $3 billion to $4 billion by 2004. The total Internet subscriber base was 1.4 million in mid-2000.

Alarmed by predictions that India could lose export revenues worth US $22.5 billion by 2008 if the bandwidth shortage is not met, the government has initiated a series of reforms to improve the country's telecom infrastructure. Most significant is the August opening of the national long-distance telephony services market, formerly a monopoly of the state-owned DTS (Department of Telecom Services).

Anticipating competition, many infrastructure providers have already begun wiring the country with fiber optic networks. Key players include the state-owned PowerGrid Corp. of India Ltd, the railways, BSES and major corporations such as the Reliance Group, Tatas, Bharti Enterprises, Punj Lloyd, BPL Group and Enron Communications. The infrastructure laid out by these players would be used as carrier's carrier networks and would cater to the needs of ISPs, which require at least 1.5 Gbps to 2 Gbps of domestic bandwidth.

The government has also given a green signal to DTS to upgrade its existing 20,000 km fiber-optic cable network across the country using WDMA (wavelength division multiple access) technology. This would augment bandwidth capacity from the current 3 Gbps to 10 Gbps, enabling a high bandwidth backbone for Internet traffic, according to N. Seshagiri, the former director of National Informatics Center.

A total of 50 Gbps is expected to be available in the next two years. "We are now free to lay our own fiber," said Anup Varma, COO of BPLNet, a Bangalore- based ISP that has created a backbone of terrestrial leased lines in major cities and is currently using the VSNL international gateway for its services. "Since there will be more players, we will get increased bandwidth and better choices," he said.

"With competition accelerating, ISPs will get better prices for better committed bandwidth," said P. C. Ponappa, business development manager for Wipro NetKracker, which recently started Internet access services.

Meanwhile, Chennai-based ISP Dishnet DSL has been first to announce a US $209 million submarine cable project between Chennai and Singapore on a 3300 km route that will offer a massive 2.5 Tbps of bandwidth. The link is expected to be operational by August 2001. Similarly, Bharti Telecom, partnering with SingTel, has proposed an undersea cabling project connecting Chennai and Singapore.