Lots of bandwidth coming into India by next year

Sat Dec 11 02:24:10 UTC 2004

Article about how lots of new undersea cables - SEA-ME-WE 4 (VSNL and 
Bharti), Falcon (which I think is FLAG as Reliance is bringing it in), 
and at least one new VSNL link to Singapore - are going to lead to about 
541 gigs more bandwidth coming into India, so that costs will be lowered

What I can see is that there have been other factors so far for Internet 
costs to be as high as they are in India.

1. VSNL, back when it was the incumbent ISP, hanging on to most of the 
available bandwidth in FLAG and refusing to release more than 10% of it, 
leaving the rest of it dark.

2. Lack of peering so far (and inefficient peering now at nixi.org) 
means a lot of local traffic still gets routed through international links.

3. More providers with nationwide fiber and right of way - mostly 
government owned public utility companies (railtel from Indian Railways, 
then there's the Gas Authority of India ...)

4. Competition seems to be making most ISPs cut their prices and up
their service offerings, especially in Broadband.  Even the government 
owned telco BSNL, which has an edge in that the regulators / ministry of 
IT feel it is their "duty" to protect it, seems to be reacting to all 
the competition by rolling out new and better priced products.

I am sorry the article isn't more technical .. it was printed in The 
Economic Times, one of several newspapers around the world that's 
printed on salmon pink paper.

	srs

http://economictimes.indiatimes.com/articleshow/947564.cms
Net surfing costs to crash by almost 50%

TIMES NEWS NETWORK[ MONDAY, DECEMBER 06, 2004 01:26:22 AM]
MUMBAI: There’s a price war on its way. In ’05, India’s undersea cable 
capacity — which provides the ‘roadway’ for data and voice transfer 
across the world — is due to rise by 17 times over ’01 levels. 
Naturally, this means that costs will crash — industry estimates are 
that connectivity costs will nearly halve.

So surf the net faster, check your mail on your mobile, and don’t worry 
about getting those huge databases across to California. All this at 
half the price. So forget about India losing its low-cost edge in the 
BPO space. There’s good news coming your way, in the form of a 541 Gbps 
chunk.

This fall in prices will bring India’s connectivity costs at par with 
those across Asia. The decline in prices is likely to help BPOs the 
most. For instance, currently, the total monthly cost of a DS3 to US is 
$126,192, significantly higher than Malaysia’s $20,922, Philippines’ 
$27,185, Singapore’s $14,435 and $13,956 in Korea.

A DS3 is a 45 Mbps (mega bits per second) capacity connection. Most BPOs 
have a minimum of 1 or 2 Mbps capacity, but the larger ones have several 
DS3s or even larger capacities. BPOs are estimated to utilise about 30% 
of international capacity, and are second only to internet service 
providers (ISPs) in international capacity consumption.

Currently, in Asia, Indonesia, India and Thailand, in that order, are 
the most expensive countries. “Within Asia, India is five times more 
expensive than the Asian hubs of Singapore, Hong Kong and Japan,” said 
Puneeth Punja, principal analyst with research firm, Gartner. In other 
words, the cost of connectivity between Singapore-Hong Kong is one-fifth 
that of connectivity between Singapore-India.

  One of the reasons for the higher prices in the country is that, from 
’01 to ’04, the prices on a cumulative basis fell by just 40% in India, 
while those in the rest of Asia fell by 70-80%. Increasing competition 
and bigger cable capacities are likely to result in a sharp fall of over 
50% in India in ’05. The rest of Asia is likely to see a lower fall of 
an average 20%, thus leading to price parity across India and the other 
Asian countries by ’05.

“The available capacity has grown from 31 Gbps in ’01 to 541 Gbps by the 
first quarter of ’05, a 17-fold increase. So, the pricing is expected to 
drop significantly,” said Tony Nash, vice companies president, marketing 
and communications of the Singapore-based Orient Networks, a 
telecommunications network service provider. “Connectivity costs 
comprise 10-25% of a BPO’s operating costs,” said Mr Nash.

The new cables touching India’s shores includes South East Asia-Middle 
East-Western Europe 4 (SEA-ME-WE 4) where VSNL and Bharti are part of 
the 12-member consortium, the Chennai-Changi cable of VSNL and the 
Falcon cable of Reliance Infocomm.

The Telecom Regulatory Authority of India (Trai), in its consultation 
paper on revision of tariff of domestic leased circuits released in June 
this year, had proposed an over 63-75% reduction in the tariffs for 
capacities of 2 Mbps and 64 Kbps for beyond 500 km. “Leased lines are 
the dominant product in both domestic and international data services, 
comprising close to 80% of the total market,” said Mr Punja.