BSNL hits the broadband highway

19 January 2005

Public sector BSNL's Dataone is set to redefine broadband in India, offering 256kbps speeds at user-friendly prices. Venkatachari Jagannathan reports.

Telecom giant Bharat Sanchar Nigam Ltd's (BSNL) underground lines may be made of copper, but technological advances and rapidly changing business requirements have made them 'as good as gold'. At a conservative estimate, the corporation expects its existing copper wires to generate an additional revenue of Rs50crore per month from December 2005 onwards, having hit the broadband highway with its all new Dataone service.

Dataone broadband has been simultaneously introduced in four states — Andhra Pradesh, Tamil Nadu, Karnataka and West Bengal, where BSNL has actually reset the country's broadband internet access market in terms of price and speed. The Dataone entry-level service is priced at Rs500 per month for up to 1GB download at a 256kbps speed. Besides, the subscriber can simultaneously talk on the telephone while browsing the internet. BSNL offers a menu of schemes with varying downloads and speeds going up to 2mbps!

The revenue potential is amazing; BSNL projects a subscriber base of 1 million by December 2005. The projections for 2006 and 2007 are 2 million and 3 million subscribers respectively, and the minimum revenue potential is projected at between Rs100crore and Rs150crore per month! BSNL also has aggressive plans in the Wi-Fi and Wi-Max segments - it plans to install 300 hotspots in 15 cities and Wi-Max in five cities this year.

The great escape
Now that cell phones have officially overtaken landlines in sheer numbers, it is becoming clear to fixed line basic telephony service providers that their future is in promoting data connectivity and convergence. BSNL's problem is more acute, as its high-end customers are migrating to new service providers, who are providing 80 per cent of their new connections.

BSNL and its owner, the government of India, failed to see what hungry private telecos and internet service providers (ISP) had spotted much earlier. These private service providers started clamouring for a right to use BSNL's nationwide copper wire network to offer broadband access. The hijackers' argument was that the telecom service arms of the government had failed to popularise broadband connectivity and, so, private sector service providers should be allowed to pay them a fee and utilise their copper line infrastructure. This argument got a boost when the Telecom Regulatory Authority of India (TRAI) made a similar recommendation. It is a different matter that the private players themselves didn't succeed in offering real broadband to their subscribers.