RURAL BROADBAND – from Digital Divide to Digital Dividend

RURAL BROADBAND – from Digital Divide to Digital Dividend April 2010

Who Are We?

About IMRB International
We are a part of Kantar Group, the insight & consulting division of WPP Group Plc.,
37 years of presence with 28 offices in 11 countries
Within IMRB, we have several sector specialist groups
Retail
Automobile
eTech …………………….

IMRB is part of Kantar Group, the insight & consulting division of USD 8.0 bill* WPP, plc… Third largest research group with over 160 offices in 60 countries, with more than 7,200 full-time staff Research International Center Partners Lightspeed Research Millward Brown TNS Henley Centre Fusion 5 Added Value Insights into Action Icon brand navigation Diagnostic Research AGB 31% IBOPE 30% Marktest 40% KMR BMRB Ziment Healthcare BPRI B2B Management Ventures Retail pFour Financial Glendinning Mattson Jack Group

Our Clients

2 small stories …….before I begin

Chamua
Chamua is 14, lives in Raitha - a village in Nalanda district of Bihar.
It is difficult for Chamua’s large family to make ends meet from agriculture and he works hard in order to be able to attend school regularly.
However often teachers are absent and there is lack of infrastructure – this vastly diminishes his aspirations of finding a job in the nearby town- so that he can send money home.
Had there been availability of broadband for e-education in Chamua’s village, he could have been imparted vocational training which could have made him a lot more employable.
Barely 10% of the schools in the country have computers and broadband connectivity is almost non-existent

Gimma
More than 1100 km away lives Gimma in Kuchipudi village in Andhra Pradesh.
Her elderly father fell ill but the local paramedic was unable to diagnose the cause.
When he complained of severe pain in the chest the second time, he was unable to be transported to the district centre in time and passed away.
Had there been broadband based telemedicine facility in the village, Gimma’s father’s ECG data could have been sent to the specialist in the nearest district centre, timely treatment could have been provided and a life could have been saved.
50% of India does not have access to affordable primary healthcare.

India 2009-2014: Broadband Roadmap for Inclusive Growth Accelerating Inclusive, Equitable and Sustainable Growth of India through Ubiquitous Broadband

Study Methodology
The entire exercise was divided into two parts:
Qualitative research involved semi-structured in-depth interviews with almost 50 stakeholders. Some of the players met were:
ISPs - Sify, Tulip Telecom Limited , BSNL ( Broadband Services)
Online Content Providers - Google, Microsoft
Regulatory bodies, government departments & independent associations - DIT, TRAI, ISPAI, NIXI
Equipment / Access device manufacturers/ Infrastructure players - Intel, HP, CISCO
Mobile service providers - Bharti Airtel, BSNL
Desk research included Data mining from large scale primary research studies carried out by IMRB International viz I Cube and ITOPS

Contents 1 Broadband Status: Where is India today? 2 India 2014: Vision for Inclusive Broadband Growth 3 Recommendations to Drive Supply of Broadband Demand Side Drivers 4 Key Recommendations 5

Broadband Status: Where is India today? Broadband – Only Scratching the Surface 1 Total entities ~236 mn, Total Population ~ 1140 mn Total Households ~ 229 mn Fixed devices~ 7.8 mn (3%) With internet ~ 4.8 mn (2%) With broadband~ 1.9 mn (1%) Total Enterprises ~ 7.4 mn With devices~ 3.0 mn (41%) With internet ~ 2.1 mn (28%) With broadband ~ 1.3 mn (18%) Source: ICUBE, ITOPS, NRS, TRAI -% has been worked out on base of Total Households/ Enterprises; -Device refers to Desktop/laptop Multiple connections ownership exists amongst enterprises
Only 1 in 100 households in India owns a broadband connection, while 3 in 100 own a Desktop/laptop
Amongst Enterprises Desktop/laptop penetration is much higher (41%), however only 18 in 100 own a broadband connection
Very few of the 51 mn smart phones are being utilized for broadband usage
Wireless devices~ 403 mn (36%) BB capable handset ~ 51 mn (5%) Total Population ~ 1140 mn Mobile broadband~ Almost nil

Broadband Status: Where is India today? What prevents India from achieving inclusive growth 1
Few FTTK (optical Fiber to the Kerb) connections
Decreasing Wire line connections
Delay in spectrum assignment
Low PC penetration
Supply side issues
Low PC literacy rate
Few relevant B2C & G2C services
High access device cost
Public access points such as CSCs & cyber cafes limited in number
Limited availability of vernacular content
Demand side issues

Broadband Status: Where is India today? Broadband in India – At the Cross Roads 1 Source: ICUBE, ITOPS, IMRB
There is a great need for all the industry stakeholders to come together to achieve more
1.3 mn 3.9 mn 8.1 mn 20 mn 13.5 mn

India 2014: Vision for Inclusive Broadband Growth : 695 mn connected Indians by 2014 Source: IMRB Research Broadband connections in 2014 30 fold increase for inclusive growth Users touched by 2014 2 Entities Broadband Connections Users Touched Connect: User ratio Homes 170 mn 186 mn 1:1.1 Businesses 34 mn 76 mn 1:2.4 Public Access: Educational institutes, CSCs, PHCs etc 10.5 mn 433 mn 1: 37 (students) 1:1 (teachers) 1:67 public access Total 214 mn 695 mn 1:3.25

We should also set target for speed and symmetric transfer over the next 5 years: 50% connections over 2 Mbps Volume Era Speed Era Symmetry Era % Broadband Connections by speed
Those who need most have least affordability: Rural citizens require high speed applications for telemedicine, e-education etc.,
< 256 kbps 256-512 kbps 512 kbps-1Mbps 1 -2 Mbps >2 Mbps Source: IMRB Research Year 2

Investing in FTTK Infrastructure & wireless broadband - the way towards achievement of this vision
Existing physical infrastructure inadequate to connect villages and small towns.
USO body to be given the responsibility of laying down high speed Fiber To The Kerb (FTTK) infrastructure across the country
Estimated cost- Rs.180 billion to Rs. 360 billion depending on whether aerial or underground.
India will get a high speed, secure and pervasive network that will benefit lives of 37% of all rural citizens by 2014
Need to develop a comprehensive spectrum policy with short, medium & long term plans.
3G and BWA based wireless broadband holds immense potential with high penetration of mobile phones & Mobile Internet Devices
Sharing of infrastructure & more economic benefits to providers important for rural growth.

Wireless :Could be the Panacea for Rural India
Wireless broadband could be a boon for the rural areas in terms of last mile connectivity. Existing physical infrastructure in terms of DSL is inadequate and installation will require high investments and time
The investment on Copper, digging and RoW is as high as Rs 25,000/km vs only Rs 3,000 required to be invested per subscriber in case of wireless
In rural areas where wireless may not workout due to undulating terrain and LoS issues, use of satellite technology for broadband offers significant advantages

Electricity Concerns
Only about 55% villages have been electrified and electricity is present for only 4-6 hours a day
We recommend
Electricity Board connection at minimum possible rate in rural areas.
At places where Electricity Board power is not available at all or is available for only a limited period of time - the government should incentivize setting up of renewable and green energy resources for the radio sites.
The high cost of power should be subsidized. The USO fund should be used to provide a 50% subsidy on diesel consumed in rural areas.

BWA Specific Recommendations Limited Spectrum The proposed allocation of spectrum per operator is less than the 30 MHz minimum recommended by the WiMAX Forum therefore we recommended that the initial spectrum to be auctioned should consist of 2 blocks of 20MHz each. More spectrum to be allocated in 700 MHz There is a need for the Indian government to urgently investigate options for allowing more spectrum to be allocated for BWA services in 700 MHz - ideal for providing wireless broadband to rural areas as the signals can travel for long distances. Also it has lesser disturbance due to atmosphere or any physical structure Cost of providing BWA
The current charges for providing Wi-max in the 3.3 GHz need to be rationalized :
CPE royalty charges needs to be minimized
Royalty charges paid to WPC for using BTS need to be rationalized
Import duty on the 3.3 GHz equipment need to be lowered.

4 Demand Side Drivers Facilitating Higher Quality Education to All via Broadband Education Issues Recommendations
Currently, school education in is ailed by several problems such as shortfall of teachers,
Barely 10% of the schools have PCs, penetration of broadband in schools is almost non existent
Empower 1.72 mn school and colleges with broadband in urban and rural areas with a ratio of 1 PC per 40 students, enabling 333 mn students to access broadband by 2014
Provide 7mn government school teachers with a laptop and broadband connection
Incorporate internet aided education as a part of the course curriculum
Encourage PPP initiatives to ensure timely maintenance of PCs

4 Demand Side Drivers Promoting Health through Broadband Health Issues Recommendations
50% of India does not have access to affordable primary healthcare
Currently, there is only one doctor for around 1700 patients
Empower 50,000 PHCs and 6,000 CHCs with broadband
Provide all doctors associated with PHCs and CHCs with a laptop and broadband connection
Expand the network and allow access to quality diagnosis and referral beyond first level of treatment

4 Demand Side Drivers Enabling content for rural masses–Agriculture Agriculture Issues Recommendations
Relevant content in vernacular languages
Few Internet access points available to farmers
Enable farmers to access timely information on agricultural practices weather information etc.
Provide subsidized low cost access devices and applications to farmers by utilizing USO fund

4 Demand Side Drivers Good Governance means e-Governance Governance
Only 20 Mission Mode Projects (MMPs) sanctioned out of the 27 MMPs under NeGP
SWAN fully implemented in only 7 states so far
Need to expedite work on implementation of remaining MMPs
SWAN and SDC should be implemented in all states by September 2010

Only 18% of the MSMEs are broadband enabled.
Provide tax holiday on PC rentals and free broadband trials
E- education E-health E-governance
20 MMPs approved, need to expedite implementation of remainng 7
Ensure presence of a CSC in all 0.6 mn villages via FTTK.
Only 10% of schools have PCs.
Empower 333 million students with broadband and thus higher quality education
50% of India does not have access to affordable primary healthcare.
Empower 50,000 PHCs and 6,000 CHCs with broadband
MSME Key sectors to invest to Fuel Broadband Demand

Digital Divide to Digital Dividend
The vision provided aims at catalyzing the process of bridging India’s Digital Divide by enabling rural citizens to be a part of the high bandwidth digital highway.
There are millions of Chamuas and Gimmas in India whose quality of life can be immensely improved by the rich Digital Dividend reaped through higher broadband proliferation in India.

Thank You Deepak Halan [email_address] Group Business Director eTech Group - Telecom & e-governance Practice IMRB International 8, Balaji Estate, Guru Ravidass Marg, Kalkaji, New Delhi – 110019 +91 11 42697800 (O) http://www.imrbint.com

RURAL BROADBAND – from Digital Divide to Digital Dividend

by Until ROI on May 03, 2010

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