In the next few months, India will be transformed from a country with scarce
international bandwidth to one with excess bandwidth on the submarine cable
front. Even on the domestic front, things are improving at a faster pace with
the increase in the number of service providers and the faster rollout of NLD
(national long distance) players in different regions of the country. In future,
the new ILD (international long distance) carriers need not worry about
international bandwidth. The new ILD carriers who plan to have gateways in
Chennai, Kochi, and Mumbai will not have any connectivity problems as these
cities have submarine cable landing stations for different submarine cable
projects. With the domestic bandwidth improving in terms of reach and quality,
new ILD carriers planning to have gateways in other cities can also do it
seamlessly as they will have backhaul facilities from the respective landing
stations to the specific city. The new ILD carriers will also have the freedom
to decide which submarine cable to opt for, depending on the location and the
quality of service being offered by the service providers.
It is estimated that by the end of July, India will have a supply of a
minimum of around 100 Gbps (giga bits per second) international bandwidth on the
submarine cable front. This is 33 times the present number and will increase
further with the commissioning of DishnetDSL cable. It is estimated that India’s
total international bandwidth is presently in the range of 3 GB. With SAFE,
Network i2i, and Flag becoming operational, along with the existing cables like
SEA-ME-WE-2 and SEA-ME-WE-3, India will have surplus capacity, which will force
the submarine cable providers to lower their prices drastically. Even on the
satellite front, almost all the major players like Intelsat, Eutelsat, Panansat,
New Skies, Europe Star, CyberStar, AsiaStar, Thaicom, and Measat are present in
India and we have abundant capacity even on this front.
International Submarine Cable Capacity in India |
||
Players | System Capacity (In Tbps) |
Initial Capacity |
SEA-ME-WE-2 | 1 Gbps |
X |
SEA-ME-WE-3 | 20 Gbps |
X |
FLAG | 10 Gbps |
X |
SAFE | 80 Gbps |
X |
Network i2i |
8.4 Tbps |
160 |
DishnetDSL | 7.68 Tbps |
640 |
Source: V&D estimates |
||
International |
||
Players | Capacity (In Tbps) |
Satellite/Submarine |
VSNL | 2,100 | Mix of satellite and submarine |
STPI | 150 | Mainly satellite |
Private ISPs |
200 | Mainly satellite |
Source: V&D estimates |
ILD carriers could mix and match different service providers (satellite and
submarine) based upon cost and quality of service. Connectivity to South East
Asia can be cost effective through Network i2i and DishnetDSL, and SAFE;
SEA-ME-WE-2 and SEA-ME-WE-3 can be ideal for Africa; and FLAG and SAFE for
Europe.
Submarine cable providers
This year, it is expected that there will be three submarine cable
companies, which will launch their services in the country. These are Network
i2i, SAFE, and DishnetDSL. Even existing submarine cables like SEA-ME-WE-2,
SEA-ME-WE-3, and FLAG will also provide some extra bandwidth to the carriers.
The first to start will be SAFE (South Africa Far East) undersea cable
network that links South Africa with the Far East. In India, the cable has a
landing station in Kochi, which is linked to the main cable from Mauritius and
headed for Penang, Malaysia. SAFE is a $600 million project, of which VSNL has
contributed close to $50 million.
The second to start will be Network i2i, which has delayed its launch from
end of March 2002 to the June-July 2002 timeframe. Network i2i is a joint
venture between SingTel and Bharti Group and its present plan is limited to the
Chennai to Singapore route. The company has abandoned the second phase plan of
connecting Singapore to Mumbai and Mumbai to Chennai.
The third to start will be DishnetDSL, which is lagging behind Network i2i as
well as on its earlier scheduled date of June 2002. Presently, the company is
looking to launch its service in the fourth quarter of 2002 and is presently
looking at the Chennai-Singapore route. The company has already plans for laying
submarine cables from Singapore to Guam.
The fourth submarine cable provider, FLAG can also think of providing
bandwidth to ILD carriers in India as it has got the right to sell bandwidth of
its own rather than depend on VSNL for selling its bandwidth. But, presently, it
cannot do so. The announcement was made just before the privatization of VSNL,
but nothing concrete has happened till date. Presently, FLAG cannot sell its
bandwidth as the commercial terms and agreements are still not finalized as VSNL
is yet to come out with collocation or landing charges for connecting to FLAG’s
landing station located in VSNL’s premises in Mumbai.
In spite of carriers getting a choice of four submarine cables, the carriers
are faced with problems of auto restoration. It is believed that none of the
cables landing in India have auto restoration facilities as none of them are
implementing the complete project. Network i2i has shelved phase 2 of the
project and is not implementing the Singapore-Mumbai-Chennai link and making it
ring architecture. Even DishnetDSL has shelved Singapore to Guam, Guam to
Jakarta, and Jakarta to Chennai, which makes it a complete ring architecture.
Since all the cables will be mechanically rectified if there is a cable cut,
most of the international long distance carriers in the country will go for
multiple submarine cable providers as it will help in providing redundancy to
the network.
Satellite service providers
To start with, we do not have many options on the submarine cable front, as
Dishnet and Network i2i submarine cables are both delayed and VSNL is still to
announce landing charges for FLAG. But carriers should not be worried as they
have an option to take the satellite route. Presently, there are at least more
than a dozen companies whose satellites have their spot
beams focussed on India and there are an increasing number of satellites planned
to be launched with India as its focus.
"Intelsat has a wide reach and six of its Intelsat’s satellites
provide solutions to India," says Sachida N Padhi, country manager,
Intelsat India. The company also supplies a major portion of international
bandwidth to VSNL as well as to STPI (Software Technology Park of India) and is
looking very actively at the Indian ILD market along with CyberStar, New Skies,
and EuropeStar.
It is expected that a sizable amount of traffic will go through satellites as
it has been used internationally by carriers to transport voice traffic as it is
quickly deployable, enabling service providers to market the services faster. It
also provides higher availability and compliments fiber by providing redundancy.
Talking about the past, Jan Grondrup Vivanco, regional director (Middle East and
Asia), Eutelsat said, "Today, 70 % of all ILD traffic to and from India
goes via satellite, and our assessment is therefore that satellite will continue
to play a significant role in ILD delivery."
Raghu Das, Cyberstar’s V-P and general manager for the Indian Ocean region,
anticipates that 20% of the voice traffic to and from India will be over
satellite. ILD carriers do not have many submarine cable options, but they would
like to start the services through satellite and then move to submarine cable as
and when these are commissioned in India. Even for connectivity to Europe and
the Gulf, one does not have too many options on the satellite front and they
have to look at the submarine front.
Despite such large bandwidth on the submarine front in months to come,
Sachida feels that there is still a niche market for satellite services in
India, especially in areas where fiber does not reach or where there is a little
or no infrastructure in place. "Presently, STPI utilizes international
bandwidth of around 150 Mbps and a majority of it is through the satellite
mode," says S N Zindal, director general, STPI. But in the future, the
company is planning to increase its bandwidth requirement by another 50%. The
company is also planning to use international bandwidth more through the
submarine route as it is cost effective and there is less delay.
International bandwidth cost
With an increase in the amount of submarine cable from the supply side by
around 30 times, India will have enough bandwidth for at least 4-5 years.
According to industry insiders, such huge capacity will result in dropping of
prices by around three to five times if one is looking at an STM-1 link and
assuring a good demand in future. But if one is looking at a retail level, one
will see a drop of 30% to 40% over the next 12 months.
The sharp drop in international bandwidth prices will have a cascading effect
on the bandwidth demand in the country, it is assumed, and with the increasing
number of carriers on the international long distance front, one can see a
win-win situation for both carriers as well as end customers.
Pravin Prashant/Voice&Data