Broadband drives long-distance fiber in India

Santosh Sathanur/Ovum
29 Jul 2010

A series of new fiber network investments has resulted in India moving from being a bandwidth-scarce market 2-3 years ago to being a bandwidth-surplus market today. On the national front, fiber rollouts from newer players have resulted in a market scenario where supply far exceeds the demand. However, on the international front there are still opportunities for further investment, especially in eastbound routes.

Although the liberalization of the telecoms market fueled rapid growth of mobile telephony in India, its impact on the growth of broadband Internet services hasn’t been as impressive. As of April 2010, the country had only 9 million broadband subscribers (a penetration rate of less than 1%). The country as a whole presents an attractive growth opportunity for broadband service providers. With such a low level of penetration, there are a large number of potential broadband customers in every region. Good economic growth and continued government support to increase broadband penetration with initiatives such as the establishment of State Wide Area Networks and the National Knowledge Network will assist in unlocking broadband potential in the country. We predict that the number of broadband subscribers in India will grow to 85.8 million in 2014.

We also believe that the arrival of mass-market, Internet-based broadband services – driven primarily by digital entertainment content and applications in urban areas and telemedicine, e-education, and other related applications in rural areas – will fuel the demand for service providers’ local access networks. IPTV, Internet video content, music downloads, telemedicine, and online gaming applications are still in the formative stages of development and are certain to push consumer bandwidth demand even higher, thereby further driving the demand for national and international bandwidth from ISPs.

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