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Why bandwidth will still cost the earth

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DQW Bureau
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It helps to drive a rugged off-roader, if you visit tech companies in Mumbai's Andheri suburb. At least, to those in MIDC, one of India's key industry centers-and probably the worst maintained. For good measure, at least five entities have separately dug up the dirt tracks 'roads', for laying cables. That is the story across Mumbai, India's industry capital. In one of the world's most cramped cities, where real estate is gold, logic would say: 'dig a single trench, with multiple fiber ducts'. 

In Bangalore, the municipal corporation asked broadband applicants to coordinate their digging and cable installation. Not so in Mumbai. Five ISPs and a gas pipeline company made a mess of the city. Luckily, Mumbai is linear and compact enough for the work to have happened quickly. Yet, the cost could have been five times lower.

Take the logic further. Five sets of trenches clearly weren't required. Were five cables required? The typical pipe there is an armored 48-core optical fiber cable. That is terabits more than Mumbai will use. It would have taken one player, say the gas pipeline company, to lay a 48-core cable, and lease or sell five cores to each ISP. That would have been more bandwidth than the ISPs could use in Mumbai in the next few decades-with more than half the fiber in that single cable still dark. Here is where government authority and a central decision would have made sense over a free-for-all scramble-assuming that the private players did not have enough sense to come together for a cable pool.

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So those ISPs collectively spent five times more than they should have, on expensive infrastructure. They will now try to recover this. That is not easy from consumers paying three-figure monthly rates so corporate rates will be stiff. 

Telecom officials label me a bandwidth alarmist: they say there is no shortage in India. I always point out the thousands of Indian Web and mail servers hosted in the US, using some 30 Gbps of bandwidth. Why don't they come back? Simple: hosting in India is four to six times more expensive than in the US for the same service level. This could decline to two- to three-fold by 2002. Getting it lower is the challenge.

That is made tougher without 'co-optition' among the players. As I often say, India's bandwidth challenge is not last mile or gateway, but backbone-aggravated by isolated carriers who do not interconnect, who push up high tariffs by not working together-and pass on the costs to customers. In a deregulated environment, discipline, cooperation and efficiency are all equally important.

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