Can we have a digital highway?

Government of India has laid out an ambitious target of 600 million broadband subscribers by 2020. However, today we are having only 70-75 million subscribers. Sanjay Kaul, Managing Director, Service Provider Business, Cisco India & SAARC in an interview with Mohd Ujaley tells, “Broadband market in India is at an inception stage, we are yet to scratch the surface. There is demand for digital content, but we are yet to build the digital highway.”

What is your view of the broadband market in India?
Broadband market in India is at inception stage, we are yet to scratch the surface. The government has laid out an ambitious target of 600 million broadband subscribers by 2020. However, today we are having only 70-75 million subscribers. In next five years, we plan to have an eight fold increase in broadband subscriber numbers in India. So the Industry and the government have this mammoth task of engineering an 8 fold rise in subscriber numbers. Multiple technologies will come into play, but there is no denying that mobile has huge advantages because of its penetration across the length and breadth of the country. I feel that newer technologies such as cable broadband can be an affordable alternative. With DOCSIS technology operators can offer internet speeds of up to 100 Mbps. We are providing our technology to companies such as SITI Cable, DEN Network, Hathaway and others for the introduction of next generation cable broadband. It has been a slow start for broadband in India. Industry needs financial injection and entry of couple of big players.

How do you look at online video market in the country?
To understand the video market, it is important to understand the user behaviour. In last 3 years, user behaviour has changed 180 degree. People who did not dare to touch smartphone are now consuming video in various forms on WhatsApp, Facebook, YouTube, etc. It is not only about messaging, we see large numbers of videos being embedded in social networks. So the demand for video consumption has tremendously increased. Video has an added advantage—one does not need to be literate to understand it, one simply consumes video. Now it is been proved beyond doubt that video has huge play in India, but can we have a digital highway, which takes videos to the people? This is where the role of government and industry becomes crucial. Initiatives like National Optical Fibre Network (NOFN), provision of extra spectrum to mobile operators, make in India to boost ecosystem of devices and endpoints, initiatives around driving digital literacy etc., must be executed.

What are the key verticals in which you see opportunities in India?
We see momentum in many verticals. There are huge opportunities in education sector. Healthcare sector can be another big opportunity, even though it is very complex given current regulatory environment. There are also opportunities in the financial sector, utility sector, etc. Security and surveillance, automotive and logistics are also areas of interest. Telecom operators are already offering payment services via mobile wallet system, the segment will become more diverse and offer more opportunities after payment bank licenses getting in place. We are bringing in technologies and business solutions for Service providers to front-end the execution in many of these verticals. You need the entire ecosystem technology players, services providers, application providers and vertical specialists to work in tandem to make it happen.

What are the prime areas India needs to focus for homogeneous spread of ICT?
India is a very diverse country. There are many challenges as well as huge opportunities. Personally, I believe, country needs to focus on two critical areas – availability of networks in rural India and affordability – when it comes to implementation of ICT initiatives. First, there is big proportion of the population that is illiterate, for them to include into digital society, one has to talk to them in the language they understand, and without their inclusion there can’t be Digital India. Second, there is inherent challenge of affordability, it is where industry needs to get together and look at the innovative business models which can be best applicable in Indian context. Basically, for a business case, four levers need to work in tandem – Cost =capex + opex, revenue= Revenue per unit + net additions. I did research on this topic eight years ago, which resulted into a publication titled “Business Model for Sustainable Telecoms Growth in Developing Economies” in which it is suggested that when addressing rural mass market one need to keep capex and revenue out of equation and focus on economy of scale to do sustainable business in developing economies.

Government of India has announced the Digital India initiative. What kind of role can Cisco play in this initiative?
We are very excited about Digital India initiative and making massive investment to make it happen. From technology stand point, we have all the capabilities that are needed to make it happen. We come from IP background and have made significant investment into mobility, video, security, data centres and collaboration etc. We are very keen to partner with the government, telecom service providers and vertical specialists to drive the execution of digital India program. We shall continue to invest in innovation, talent and growth in the country. India is a strategic market for Cisco globally and we are committed to India. India is our global second headquarters and we have made significant investments in the country. India site is the largest outside of our global headquarter in San Jose.

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