Amitabh Singhal
Founder Member &
Immediate Past President ISPAI
Director – NIXI

Indian Internet – exploring possibilities to reach out distances.

It’s been more than a decade since Internet first came to India and its been a slow & steady journey in terms of subscriber. Still we are short of proposed target and lot has to be done. Technology issues, policy issues and other related issues are to be resolved before we move to the next level. The competition has increased with Telco’s on one side and standalone ISPs on other, both with common goal of penetrating deep into the Indian market. Telecom India Daily tried to explore the ongoing internet trends with former ISPAI President Amitabh Singhal.

Q1 How does you rate the growth in Indian Internet market and what is your expectation of growth in coming 2 to 3 years?

The Internet subscriber rate of growth in India needs to be much higher than the current 10-15% (variable across last 4 years or so). We have a lot to do to meet the set target of achieving 20 million dial up and 20 million broadband subscribers i.e. 40 million subscribers in all by the year 2010. Going by the current trends, where we are at approx less than 7 million subscribers, it'll not be an easy task by any means.

Q2 What role ISPAI has played in Indian E- revolution & to what extent it has proved - "Promote Internet & Broadband for all", mission of ISPAI?

ISPAI was formally set up in 1998, as a non-profit body to promote the mission – “Internet for the benefit of all”. It is and remains the only collective voice of the ISP fraternity and by extension the entire Internet community in the country. Over the years ISPAI has helped mould, shape and influence telecom policies to ensure that ISP services grow in an enabling environment. The underlying motive has been to enable our countrymen to access and use the best of Internet technologies and services.

We helped break down monopolistic structures in the telecom industry, thus bringing in the benefits of competition to the Indian people. We helped turn India from a bandwidth hungry country to a bandwidth surplus country. Today, I can say very proudly that, thanks to the policies espoused by us, India owns and manages a major chunk of the internet bandwidth pipeline across the globe. Apart from making available the best of Internet access services at the best possible prices, we helped India connect to the world so effectively that today, the ITes industry i.e. BPO/Call center/Of shoring services cannot but make their global presence felt through their IP connectivity, generating new business opportunities as well as a robust job market for so many Indians. It works closely with the Government, the Regulator, Industry chambers and associations worldwide on future trends and measures to promote growth of Internet.
Some of ISPAI's achievements because of it's proactive role are mentioned:

• Constantly bringing down price and consequently increasing availability of bandwidth.
  
• Breaking down monopolies in international and long distance telecom business and helped bring in competitive service providers
  
• Supporting and helping to create IT policies with central and state governments for the promotion of e-governance.
  
• Helping bring in Internet telephony, which resulted in making communications, especially voice services cheaper and affordable by the day.
  
• It's member ISPs were the pioneers in setting up Internet kiosks, where ordinary Indians first got access to cheaper, varied and faster Internet.
  
• Pushed for broadband policy, making it possible for Indians to now get multimedia capabilities at some of the cheapest costs in the world.
  
• Thanks to availability of cheap Internet access, Indians are now able to get services like Right to Information, etc. that is bound to revolutionalise the life of ordinary Indians in the medium term.
  
• Setting up of NIXI, which means that QoS of Internet services has improved and local traffic does not travel outside the country as was happening earlier.
  
• Also, it will not be off the mark to say that thanks to improved Internet access, Indian knowledge and intellectual capital is now recognized far better the world over.
  
• Efforts are on by the industry to reach these services to the deprived rungs of society (even though I admit there's a lot of ground to be covered).
  The above are just some examples of how the information access enabled through Internet has impacted every one of us.

Q3 The number of ISP's has dropped from 700 to about 158. The statistics for 2005 says that BSNL & MTNL together has internet subscriber base more than the total subscriber base of all ISPs. Also with the entry of other operators into this field, the competition has increased. How do you see the remaining ISP's future
and subscriber war?

Consolidation is an acceptable part of the business. The fact also is that despite the huge number of ISP licenses granted, there were never more than 150 odd, maybe even less, who were actually providing services at any point of time. However, there were numerous others who went out of business too. The reason for that was probably that they could not sustain their business models after the initial internet euphoria died down.

BSNL/MTNL having been the long time telecom monopolies, had distinct advantages in terms of network availability, reach and access to subscribers and therefore could log more number of subscribers than any other stand alone ISP. They continue to enjoy this advantage even when moving from dialup era to broadband. In fact, with broadband happening more on DSL, telecom

companies will continue to have advantage over the stand alone ISPs, especially when the regulator has not been able to get policies like last mile unbundling accepted and implemented. In the future too, the real competition will be among the telecom operators for ISP services. As and when private operators continue to expand their networks, their ability to compete with BSNL/MTNL will increase. Standalone ISP's who are not telecom operators can only continue to work towards consolidating their existing subscriber base through value addition, rather than competing head on with the telco's.

Q4 ILD & NLD licenses have been simplified giving more options to Access service providers, now they can provide Internet telephony, Internet services & Broadband services like triple play (voice, video & data). ISPs can provide only Internet access/Internet content services. What steps do you think Govt. & DoT should take to make things easier for ISPs? How ISPAI will help out the ISPs against all these odds?

It's true that the new set of policies seem to be unfair to the standalone ISPs. ISPAI has been sensitizing the government and the regulator, through worldwide examples of regulatory intervention, where the Telco's are required by law to provide similar access conditions to standalone competitors as they provide to themselves. ISPAI has been pointing out practices like that vertical price squeeze, discrimination in making resources like leased line availability, etc which is unfair to the competitors and to the users in the long run. ISPAI will have to continue to target such practices aggressively, to ensure that all ISP's compete within a fair and non-discriminatory regulatory regime.

Q5 Should ISPs be given Incumbent licensee status and allowed to share the USO funds along with the Access service providers?

I am not clear what an incumbent licensee status will do the ISPs, but I do agree that USO funding should go beyond providing subsidy to voice alone. USO Regime should cover internet and Broadband coverage, where ISPs are allowed to also compete for subsidies from the USO fund against services that they provide. This will broaden the scope of USO coverage from mere voice to voice and data and both are equally important in this day and age.

Q6 What kind of new restrictions have been imposed on 'walled garden' content and what impact it will have on ISPs business?

ISP's cannot now provide VPN services that they were earlier providing within the ambit of the current ISP license. This is the restriction imposed which affects their ability to provide services to corporate and businesses, which was the lucrative part of the ISP services. However, if ISPs wish to still continue providing VPN, they have to take the NLD/ILD license at a cost of Rs. 5 crores and also pay 6% of their revenue as license fee share. In effect the cost of services to the businesses has gone up to that extent. Earlier in the absence of license fee and revenue share, ISP's at least had that fair chance of competing with the telco ISPs. That is now taken away without addressing concurrently addressing issues like vertical price squeeze etc.

Q7 We are falling short of target set for Broadband connections – “In 2005, about 6 lakh subscriber were there, just 1/5th of set target 30 lakh”. What would be the feasible & effective method to increase broadband penetration in Indian market - Unbundling of copper as last mile access or wireless - Wimax?

There cannot be 'either this or that' solution for increasing the internet/broadband penetration in India. Considering the very diverse and complex nature of our requirements, we have to accept various technologies and methodologies that promise a robust growth. Unfortunately unbundling is being ignored as an option repeatedly despite its ability to ensure that more service providers can compete in the DSL business and effectively increase penetration and subscriber numbers quickly. Wireless technologies hold a lot of promise and ISPs are seriously considering these options. Two things that need to be sorted out in the wireless model is issue of spectrum and it's pricing - more bands need to be allowed for free usage apart from just 2.4 Ghz - as well as the fact that an economic business model based on a wireless network is still elusive.

Q8 How do you find our daily newsletter service ‘Telecom India Daily'? What role do you think it can play in revolutionizing Indian Telecom?

Telecom India Daily news letter is a welcome addition to the news hungry nature of telecom and IT business and it's associated fraternity. A daily summary of news, events and happenings keeps all of us on our toes. The revolutionary streak comes in when a report in your newsletter leads to affirmative action, leading to desirable results. This is something that will be felt over a period to time