The Telecom Regulatory Authority of India (TRAI) appears to have backed down on it’s earlier recommendation of unbundling of last mile, since the government has clearly stated that they’re not keen on unbundling – former Telecom Minister Dayanidhi Maran had said so at TiE Con in 2006. TRAI has, instead, the following recommendations for BSNL and MTNL, the two state owned telcos:
— That the government increase the target fixed for BSNL and MTNL for provision of broadband connections during 2007-08.
— For this purpose BSNL and MTNL should be encouraged to appoint franchisees for providing broadband services to supplement their efforts. There should be total flexibility in developing a commercial model. Close monitoring be prescribed to ensure effective utilization of the local loop.
Currently BSNL and MTNL are both are significantly behind targets, but have around 60 percent of the broadband market – with only 1.45 million DSL subscribers between them. To supplement the franchising model, the TRAI has also recommended that Cable Operators be encouraged to provide broadband, given their large distribution network. Now this is where this entire move appears to be an eyewash – the Quality of Service is a serious issue with cable operators, and private ISPs like Sify and Hotwire have gone down that route and struggled. That’s the last thing one needs – a badly (barely) managed franchise network, just to add to a subscriber base to meet targets, with no focus on quality of service, or open competition. Other desperate measures to reach targets include: considering broadband via DTH, though cost may be an issue; making municipal dwelling units broadband ready; providing subsidy to more than two service providers for rural penetration of broadband, using satellite and other technologies, using the under-utilized USO fund. All this will take time to discuss and implement, but the TRAI has backed down on the unbundling of the local loop, and that’s the real story.