Betting on Broadband

Though many enterprises haven't yet moved to expensive broadband service,
Reliance Infocomm, after making its presence felt in mobile business, is all set
to create a furor in this segment. The company's broadband offering for
enterprises is nothing but a bouquet of telecom solutions at prices far below
industry standard.

This 'value add' enterprise broadband is nothing but a strategy to
connect enterprises with faster Internet access and integrate it with other
telecom services that include mobile, data and video services. As a package
deal, enterprises will have the option to use other offerings of Reliance as
well. This will include Metro Ethernet, Leased line, Fixed Wireless Terminal and
PCMIA card. The company is providing backend facility with its recently acquired
FLAG and data centers on the Reliance Network.

Reliance Infocomm president Prakash Bajpai says, "Reliance Broadband is
a one-stop-shop for all kinds of services. Under this brand, enterprises will be
offered all the services that include voice, video and data."

The broadband play of Reliance is a step towards making Infocomm business a
full fledged telecom entity. Reason: Saturated mass market has forced them to
chase better ARPUs (Average Revenue Per User) in newer segments. ARPU in voice
is falling day by day because of price drop in tariff. Reliance has been eyeing
the enterprise market for quite some time now as this market holds an added
charm of lowest churn rates and it has varied communication needs that require
high-value solutions.

With enterprise broadband, Reliance is all set to make inroads in the data
market which has not been tapped to its full potential. The success of
enterprise broadband will eventually help Reliance to make a foray into the much
awaited consumer broadband offering 'Netway' and other data services. The
company whose mobile service would constitute only 20% of the overall revenues
of Infocomm is focusing hard on enterprise broadband and all set to market its
enterprise initiative aggressively.

One of the major players in broadband, Bharti had rolled out broadband long
time back and even with lower tariffs failed to attract enterprises due to lack
of focus and poor marketing. However, Reliance, to a certain extent, managed to
remove these two major bottlenecks.

Reliance managed to get success in mobile business through its low cost and
the company is adopting the same strategy with broadband. Reliance broadband
prices would be one-fifth of what the industry is offering right now. The prices
would be driven low so as to increase volumes exponentially. Also, the company
is stressing on Service Level Agreement (SLA) as another differentiator. The
company claims that its SLA has an inbuilt penalty clause and would cover all
services under its broadband offering.

According to Bajpai, the company's optimism on meeting SLAs stems from the
inherent strength of Reliance's self-healing ring architecture network. Beside
the ring topology, its core network also has more than two alternate paths,
thereby creating alternate mesh architecture. On the international bandwidth
front, it treads both the Trans-Atlantic and Pacific path. It claims that most
of its perspective customer buildings are within 250-500 meter range of its
network. This is why, the company is betting high on SLA as its USP and is
promising a repair mean time of six hours apart from 98.5% onwards availability.
It is also promising seamless scalability-from 64 kbps to 2 Mbps (E1), 34 Mbps
(E3), 45 Mbps (DS3) and 155 Mbps (STM1) over the same fiber.

The company claims it is ready to rope-in around million subscribers by this
year end. Launched under the brand name 'Reliance Broadband', the enterprise
services will initially be available only in 30 cities. However, it expects to
eventually connect 194 cities by the end of this year.

It has already laid optic fiber in all these cities and is providing last
mile connectivity through ethernet to around 2 lakh buildings in 30 cities. But
by just providing service on optic fiber broadband doesn't mean a cakewalk for
Reliance. Tatas already offer optic fiber connection to its top enterprise
accounts and Bharti is offering its enterprise broadband on optic fiber with
bouquet of telecom solutions.

Rahul Gupta CyberMedia News/Mumbai