Broadband and Hayai

Hi all,
This post attempts to share some facts and aspects I found about the state of broadband in the country, an RTI application and its response I found in the same regard and a new service provider (hopefully) Hayai which would/could alleviate the position somewhat. It would be a long post so would beg for your patience.

First up, I found an interesting RTI application made by a Dr. Abhishek Puri . The answer by TRAI to his application were not surprising as I suspected, but this was an eye-opener. His follow-up letter/mail to the appellate authority were also interesting. After getting no response he again files/puts an appeal again to CIC (don’t really know what this body is but anyways) . He finally gets a response from the appellate authority and is surely disappointing one as felt by him. Amazingly, the guy doesn’t get bogged down and puts up another RTI application, this time though about BSNL broadband. Jump to few months ahead and you come to another gem of a story (this time though about the Telemarketing and privacy issues) slightly OT but still highly relevant. Mr. J.S. Sarna, Chairman, TRAI ‘s interview which he shares also tells the pathetic attempts made by the regulator to stop the dubious practice. He also goes a bit later to talk about BSNL’s issues as well. As of date, he hasn’t received any response from CIC to his appeal against TRAI.

Anyway, what the above amounts to is the regulator is not doing its job, the public utility company BSNL is either unable or doesn’t want to do the hard work it needs to do to rejig broadband in India, the net net result being customers are constantly short-changed and private operators being better off for the same. I am also impressed by the zeal shown by the Dr. Puri. One mistake or thing more he could have done is to bring all of the above to the notice of Competition Commission of India (CCI). This would also proved to be useful in the long-term.

An article about a new submarine cable by Pacnet also states the state of affairs as it is today quite clearly as well. Till we don’t have independent landing stations we are not going to get any gains as far as bandwidth charges are concerned. To buttress my argument I can always use Nielsen’s Law of Internet Bandwidth which while states that a high-end user speed increases are 50% year or year, while for low-end users it would be a more gradual path. In India, the gradualness has been too much as can be seen from the infographic given in the Pacnet article. This is the reason why we are still languishing at the less than 1 per cent broaband penetration that we have 😦

Interestingly, there was an half an hour interview with Mr. Kuldeep Goyal, CMD, BSNL. While he didn’t have anything new to share he did share about a new broadband policy in works which should be out in September. The rest of the interview was pretty mediocre and it was clear that BSNL doesn’t have any concrete plans to get out of the mess it finds itself as of now. The BSNL Unions have nothing but weakened it more and more. They have neither able to efficiently outsource their operations nor have they have been able to get good personnel for either the customer service or for problem-solving.

Before we do get further involved, there are four national broadband providers that are well known. BSNL (a Govt. public utility company like the Baby Bells were in the US before they were broken), three private operators Bharti Airtel, Reliance and Tata Communications. Then you do have small regional players like Railtel and few others but the above four are what set/move the broadband market as of right now. From all the above discussions, articles and blog posts it becomes more than amply clear that there is an cartel in works, an oligopoly.

Lemme also illustrate the state of affairs in Pune, the city where I live in has been stalled by the cable-laying charges levied by Pune Municipal Corporation. While most of the private operators either did their work before this hike or they abided by the rules as PMC did make some nice windfall from the charges. This has also resulted in BSNL not being able to do a pilot project in Pune for Fibre To The Home (FTTH) .

A little above I talked about Outsourcing. I do not want to give a bad impression as Bharti Airtel became a behemoth due to its Outsourcing strategy. It is a case study which has been told in many Marketing and Management Institutes. While it seems that BSNL is trying to ape or use the same strategies as Airtel did, there seems to be a lack of regulation, a reward and penalty regime (carrot and stick approach) and generally lack of enthusiasm to try new things. In fact, what came as a shocker to me is that the local BSNL exchange just turned to FETEX when they had announced the same in circa 2006 (this happened last week). Now of course, this either means that the upgrade didn’t happen at that time or it was wholly incomplete but then there is no accountability that one can expect from BSNL.

As an experiment, I asked for the two other competing providers Bharti Airtel and Reliance Communications representatives (using the respective company’s website so a record is there) and both of them fell upon each other to let me get a new connection. Comparing the same with BSNL where the customer has to have an interest (rather than the company) and plead with the gods to make sure a connection is given. The billing might come, but the connection may prove to be elusive or to make sure its functioning. I know of couple of cases where 2-3 months it takes for a re-connection to happen. In my own case the last time it took over a month and a half for the reconnection to happen. (After an application is made) . This is all when I have my own CPE (Customer Premises Equipment) and I just needed the username and password as I had done the requisite technical adjustments I needed to do at my end and this was communicated to the person-in-charge/concerned.

In this messy state of affairs, comes a little known company by the name of Hayai Broadband. the tentative pricing quite a bit pricey, which is not really a surprise. what is a surprise though that they talk of giving Fibre to the Home. While BSNL has been talking the same since last year, they have also been talking about it since last year. I don’t really know whether they are serious about their plans or not as they are yet to launch their services in India. Two-three major issues I see with Optical fibre are its pricier, as its brittle its easily broken and one needs people with expertise in fibre cable termination and splicing. These sort of people one would usually find in either Data Centers or in doing maintenance work on back-haul networks.

Whatever little discussions I have had with Mr. Matthew Carley, CEO, Hayai Broadband does lead me to believe that he’s an extremely intelligent person, has extensive knowledge although such a project would need some extraordinary negotiating, partnering as well as project execution skills. The burn rate (money spent on capital equipment as well as personnel) is much higher than using copper/coaxial cable but it would be superior, both active and passive infrastucture. From an IT/infrastructure company he needs to break even within 24-48 months (IT software companies usually have a 24 month period or sometimes less while hardware/infrastructure companies tend to have a longer gestation period). I don’t know what kind of break-even targets Mr. Carley had, although he’s behind as he was supposed to be up and running around Diwali last year.

A recent e-mail with Mr. Carley does share some light.

We have been stalled by the approval of CPEs. I am attempting to find a more market-ready solution, even if only for a temporary measure, because everyone is sick of waiting (most of all me) and I want to get this stuff running like 6+ months ago

It really would be interesting to see when and if the operations start. If he does start, it would be nothing short of a revolution as it could potentially lead to all kinds of digital economy growth (think data centers, electronic commerce, micropayments etc) . The possibility of of more powerful and yet cheap hand-held devices which we can’t even envisage may also become reality. The creation and growth of digital economy depends upon good/bankable broadband infrastructure. If bandwidth is no longer a bottleneck, we may finally start doing something. There is also the issue of needing new devices in order to fully exploit a fibre network. Even if the network would be able to talk at say something like between 100 Mibps it would again be nothing short of revolution. Torrents, file downloads, streaming, gaming and all kinds of high bandwidth operations would be so much easier.

Of course, as of today, all of this is a pipe dream as Hayai is not up and running. While I’m not gunning for Hayai in particular although taking him as an e.g. I do hope that in the near future we do get high-speed Net speeds at some highly reasonable rates. Here’s wishing a Fool’s dream .


2 thoughts on “Broadband and Hayai

  1. There are a couple of small innaccuracies here:

    Firstly, Railtel isn’t a small regional player. Railtel is a state owned enterprise not unlike BSNL and MTNL, however it’s core business is in domestic capacity – in other words, intra-city bandwidth, and I think after BSNL itself, it has one of the largest fibre-optic backbones in the country (although not very much of it is used).

    You could have mentioned Hathway, You Telecom and MTNL as “small regional players” instead 😉

    Anyway, the player you probably mean to refer to is Railwire which is indeed a small regional player that just happens to be part of an experiment being undertaken by Railtel. When I first spoke to Railtel in May 2009, they had anticipated launching Railwire’s service in major cities later in that year (in my case, I was asking about Mumbai), but as it turns out they had actually been saying this to others since 2007 or 2008.

    The problem it seems that they are having is with the last mile. Obviously they “can’t” just go and lay new cables in various places – this would usurp BSNL/MTNL and would result in direct competition both between the enterprises themselves but also between the technologies (ADSL vs Cable/Metro Ethernet). So, Railwire has partnered with a couple of cable-network operators in Bangalore and they seem to be happy with that (although disappointingly, they seem to have removed all unlimited plans over 4mbit/s).

    Interestingly, Mr Gupta at Railtel (West India) said to me at the time of our meeting (I’ll have to paraphrase here): “If you can get an ISP license and build a last mile, we can supply you any amount of bandwidth to any railway station in the country.”

    Little did I know what other challenges lay ahead and *why* they possibly are not very enthusiastic about last-mile, but that’s not really the topic of discussion here (that and I probably would come off as a little biased due to my dislike of “cablewalas”).

    A second thing is: optical fiber is very much not brittle. There are cables out which you can literally bend around a 90 degree angle, usually with zero loss.

    Thirdly: Software companies and Telecommunications companies have entirely different models. Because most of our capital would be invested in something physical (eg a fiber-optic network), we could have a break-even point of 10 years if we want to – buried infrastructure is designed to last 30-50 years, aerial infrastructure 20-30.

    We won’t have such a far-out timeframe – ours is far less than that, but it’s also sort-of on a “revolving credit” scenario: recoup investment in one city, put it in another city. The benefit of this is that after the big cities are done, we can do more and more cities simultaneously because smaller cities require far less capital.

    Of course, our plan isn’t to stick strictly to Tier-1 cities then move to Tier-2, 3, 5, 9: much is based on competition in that city. If there isn’t any (in other words, BSNL is the only supplier), it becomes a fairly immediate target.

    And our rates will come down. A major cost component for us is international bandwidth. The more we buy and the longer our committal periods, the cheaper it becomes. But we will never have flat-rate (which most ISPs call “unlimited”) service at less than 5mbit/s unless it’s wireless.

    1. In-line :-

      > New comment on your post “Broadband and Hayai” > Author : Mathew Carley

      @Mathew Sorry for the delay. For some unknown reason felt like sleeping for couple of days before responding on your comment.

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