Nasscom’s Operation Bandwidth

Nasscom considers that there are two broad ‘bandwidth’
challenges to India that need to be addressed on priority by 2005:

  • To enable,
    through the operation of a vigorous and innovative market, the creation, in
    any location, of centers of Indian ‘bandwidth excellence’ which are
    capable of matching the bandwidth supply conditions in terms of innovation,
    quality and price for bandwidth prevailing in the emerging centers of
    e-commerce excellence in North America and Europe and

  • At the same time
    to find appropriate and empowering ways of meeting the challenges of
    providing affordable, quality and timely access to bandwidth, to enable
    Indians living in regional, rural and remote areas to participate fully in
    the information economy.

Nasscom
recognizes that the existing predominantly telephony-based regulatory and policy
environment is no longer tenable in an era of diverse and multiple communication
needs. Nasscom considers that the way these objectives are met, needs to be
re-thought creatively towards a quite different globalized environment which is
being increasing dominated by an Internet paradigm.

Global outlook

A revolution in information networking is creating an
unprecedented global change and is vividly brought out by the following
mind-blowing statistics:

  • While it took a
    century to install the world’s first 700 million phone lines, 700 million
    more lines will be required over the next 15-20 years. This means 630,000
    lines during the next week

  • There are more
    than 200 million wireless subscribers in the world today. There will be 700
    million more over the next 15-20 years–50,000 each day

  • While there are
    more than 200 million cable TV subscribers in the world today, there will be
    300 million more over the next 15-20 years

  • In the next two
    years, there will be 1,000 new providers of telephone, Internet and wireless
    communication services

  • 58 million Km of
    fiber cable is to be globally deployed during 2000–enough to circle globe
    1,450 times.

Globally, communication ‘consumption’ is increasing,
spurred by low costs and high bandwidths. As the world adopts the ‘network
computing’ model, the requirements for communication infrastructure will grow
exponentially. To meet this demand, practically all components of
telecommunication technologies are turning digital with the price-performance
ratio halving every 18 months. Thus, high bandwidths are increasingly emerging
as the standard for networking applications.

Three key international trends are expected to drive them:

INCREASES IN CAPACITY: Submarine fiber optic
capacities for both Trans-Atlantic and Trans-Pacific routes are expected to
increase four to seven folds by 2000 as against 1996.

FALL
IN TELECOM COSTS
: International telecom costs are in a free fall. Costs of
leased circuits between Europe and the US have dropped to 50-80% of 1990 price
levels.

DEMAND FOR APPLICATIONS: Demand will grow for
applications such as broadband Internet and multimedia that require
significantly higher bandwidth than today’s applications.

Bandwidth will increase to accommodate Internet content such
as image files, video-laden Web pages, animation and streaming media. By year
2002, it is expected that 25% of the US Internet users will have broadband
access and e-commerce players will launch broadband services, both in parallel
to their existing narrow band and as exclusive services.

It is not surprising that several countries have been
aggressively developing state-of-the-art national information infrastructure,
which can leverage the global information infrastructure. Singapore and Malaysia
are some of the examples in Asia, who are making huge strides in this area.

Singapore was the first country to develop an ATM base
broadband multimedia network, which will help the country develop into a major
IT hub for the Asia-Pacific region.

Malaysia has developed a multimedia super corridor by linking
its 12 cities through a 700-km fiber optic backbone providing a bandwidth of
2.5-10Gbps. Access to this network is provided through fiber to the home. This
facility is provided with guarantees of stringent performance levels and very
low tariffs.

General recommendations

BANDWIDTH AVAILABILITY: The government’s principal
focus of polity attention in relation to bandwidth issues needs to be on
transforming bandwidth capability into bandwidth availability by developing
competitive and responsive market conditions, particularly in the customer
access network and provisioning of trunk capacity.

300GB BY 2005: The Internet penetration must rise
through increased bandwidth for access and lower access charges. National
Internet Backbone (NIB) is expected to play a major role in the growth of
IT-enabled services and therefore bandwidth availability on NIB should be large
enough to bring down bandwidth cost. Supply of bandwidth needs to automatically
precede the demand.

By
the year 2008, it is estimated that 2.5 million employees will be working in IT
companies in India. It is estimated that the total connectivity required from
India for IT companies alone would exceed 250GB. Planning must be done today to
provide for such high bandwidths in future, which must be available at short
notices. As the requirement for manpower increases, and as we develop more and
more development facilities in different parts of the country, we need to
increase the domestic bandwidth available to support these centers. DoT must
plan to increase domestic bandwidth across various cities. These must be
available in reasonable time frames (maximum one month).

RURAL AREAS: Improvement of the telecom infrastructure
in the rural areas has to be speeded up. nx64Kbps and 2Mbps leased circuits on
reliable medium should be made easily available up to taluka level and 64Kbps
leased circuits at village level by the end of 2000. This would require India to
have a cost-effective telecom infrastructure. Efforts would be required not only
from the Department of Telecom Services but also from the private service
providers.

DOMESTIC EXCHANGES: Domestic Internet exchanges should
be set up on priority basis.

INTERNET KIOSKS: Popularization of Internet kiosks or
dhabas will improve access to the Internet for those who cannot own computers or
do not have an Internet access. (ISPs and telecom companies may work towards
achieving this.)

PENALTIES: The penalties for damage (and limits on
liability) to cables should be increased at the earliest opportunity in order to
create a more effective deterrent to unnecessary disruption of these key
elements of the national information infrastructure.

ADVISORY GROUP: The government should convene a
high-level industry advisory group to advice and coordinate India’s
requirement for Internet bandwidth.

ASIAN CLUB: Government of India should join forces
with other Asian countries and open a dialogue with the US on the issue of high
charge being paid for the Internet traffic.

DEMAND STIPULATION PROJECTS: Demand stimulation
projects should also be used to encourage the development of content and
applications to support these online services. This will also assist in the
development and retention of online skills in India, which is also part of the
problem.

Collaborations in the multimedia industry, particularly on
global projects, should be pursued by the industry and the government working
together to develop network solutions which allow them to move large amounts of
digital material in the interests of greater competition and efficiency in the
use of resources.

ACTIVE GOVERNMENT SUPPORT: The government should
review the possibility of supplementing funding for telecommunications bandwidth
infrastructure, services and content through consideration of further financial
support for infrastructure, service and content investment.

Industry Specific

ACCESS OF INDIA-BASED PERSONNEL FOR CUSTOMER SUPPORT:
Customers are required to contact employees of Indian IT companies on an ongoing
basis for support, status reporting and negotiations as part of project
execution. Most of the US IT companies have set up toll-free numbers for such
support and the call gets routed to the appropriate extension of the employee or
to his/her cell phone or residence number if the person is not in the office.
The technology for such call routing is built into all EPABX systems today.
Charges for such calls are picked by the IT company or the customer. According
to Nasscom survey, such charges do not exceed 15 cents (Rs 6) per minute and in
some cases are as low as nine cents (Rs 4) per minute.

Indian IT companies have set up dedicated telecommunication
links to the US through VSNL or STPs and are using these links for data
communications. These lines can easily carry voice traffic (they are digitized
anyway), and if they can be connected to PSTN in India through the EPABX then
they can route a call to the relevant extension or the residence or cell phone
number. The facility to connect the international telecommunication links to
PSTN on either side may be provided to software export companies. This will
ensure that India’s foreign competitors do not have an undue advantage in
customer service.

This will also help India become a customer service hub in
future and attract various organizations to set up their customer service
centers in India. This business alone is projected to bring in an additional $30
billion in foreign exchange by the year 2008.

INTERCONNECTIVITY ACROSS MULTIPLE NETWORKS: All forms
of content–voice, image or video–are getting converted to IP traffic and are
being sent over the same network. End-user phones are becoming digital and you
can use your PC or an IP-phone to talk to a remote person, he/she being on a
regular phone, mobile phone, or a PC or IP-phone. As world-class IT companies,
Indian companies are expected to leverage technology to provide ubiquitous
access to their employees to corporate as well as customer networks. For
example, an employee must be able to check e-mail using a remote PC, a regular
phone or a PDA. This requires interconnectivity between all forms of networks.

In India, multiple service providers are emerging to provide
connectivity solutions. Some of these vendors can provide better connectivity
solutions–some of them can provide these solutions faster and some others can
service the requirements better. Sometimes, service providers other than DoT are
the only solutions available. Here also, interconnectivity between networks of
different service providers must be allowed.

REDUCTION IN TARIFFS FOR INTERNATIONAL CONNECTIVITY:
There is a requirement of large bandwidth for our customers internationally,
with more and more work being done in India. The work is becoming
mission-critical to them. Such bandwidth is required in the development of
multimedia and Internet-based e-commerce applications. In the US, coast-to-coast
connectivity of 56Kbps costs around $600 (frame relay) to $1,000 (leased line)
per month. The cost of a 1MB link is around $4,000 per month–which means about
18 times more bandwidth for 4 times more cost. The tariffs are discounted
heavily as the volume increase.

Similarly, the cost of a 64Kbps link from the US to the UK is
around $2,000. Here also, the discounts are deep for higher speeds.

The charge for a 64Kbps link to India from the US is around
$5,000 per month. For 1MB, the charge is $35,000 per month.

In India, the tariffs need to be reduced drastically to
encourage more value addition. Also, volume discounts must be steeper so that
companies can take more bandwidth and provide better customer service.

24X7 SUPPORT OF DOT LINKS: Indian IT companies operate
beyond the normal eight-hour workday; sometimes they operate round the clock.
DoT is not totally equipped in all cities to provide 24×7 support needed to
operate in the global markets. Also, most of the companies are dependent on DoT
to provide the last-mile connectivity. So the service becomes critical to the
survival of the IT companies.

LOW-COST INTERNET CONNECTIVITY TO SCHOOLS AND COLLEGES:
India needs to produce more IT professionals to meet the demands in future. It
is estimated that we will grow from an estimated 340,000 IT professionals to 2.5
million professionals by the year 2008. This will require exposure to IT for all
college and school students. Also, in a knowledge economy, IT exposure is
required of all future employees. In order to make this happen, we need to
introduce Internet connectivity for all schools and colleges. The government
must provide low-cost Internet connectivity to all schools and colleges in all
parts of the country.

INTER-CONNECTIVITY OF CALL CENTRES: There is a strong
need to permit inter-connectivity between call centers. The drivers include:

  • Ramp up ability for disaster recovery

  • Load sharing between the centers for optimum utilization
    of expensive resources (international bandwidth)

  • 24×7 support for critical operations: Even a few minutes
    down time is not acceptable to international customers and can lead to loss
    of credibility

  • Interconnect two facilities through fiber optic cable:
    This helps companies to establish customer/expertise specific centers of
    excellence. They should be viewed as extensions of the first

  • International call center: DoT maintains that it is not
    permitted. The guidelines need to be reviewed in consultation with the
    industry.

REDUCE DELAYS IN PROVISIONING OF INTERNATIONAL BANDWIDTH:
International bandwidth is the lifeline for the IT-enabled services business.
Intelsat (the only carrier permitted) transponder capacity is constraining. This
is severely restraining the industry from realizing the true potential of a huge
international opportunity. In keeping with our earlier suggestion, it is
suggested that the IT-enabled services (at least call centers) companies be
permitted to establish their own international gateways and use alternative
satellite networks. We understand that there have been early moves to liberalize
this framework at DoT. A delay in provisioning of international bandwidth
impacts business growth.

SCARCITY OF INTERNATIONAL BANDWIDTH ON FIBER: Many
processes of IT-enabled services companies are dependent on high uptime of
telecom links. Unfortunately, the options permitted are limited. It is therefore
suggested that the IT-enabled services companies be permitted to directly
negotiate the capacity requirements with the international fiber optic
companies.

WEB-BASED CALL CENTERS: Allow Web-based call centers,
i.e. voice over internet or interconnectivity between call centers and the
Internet, which can facilitate users to receive calls from customers at home.
This would lead to greater employment generation.

DQ

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