Broadband: The Bigger Picture

There is much excitement and anticipation about the prospects for broadband growth in India with the introduction of BWA (Broadband Wireless Access) services imminent. (See India's Broadband Test and Can BWA Deliver for India?)

But the introduction of new, more widely-available Internet access services is just one part of a bigger puzzle. There is a recognition that services need to be priced to suit the pockets of India's 1.2 billion people and that local services and applications need to be developed that's understood and can be controlled by the strategies of the service providers.

But other parts of the puzzle can't be controlled by the communications service providers -- namely, macro economic pressures.

And India faces some serious economic pressures currently that could have an impact on broadband growth.

While the Indian economy continues to grow at a staggering pace -- the country's gross domestic product (GDP) is expected to increase by 8.2 percent this year -- inflation, fueled by a rapid rise in basic food and fuel prices, is rampant, running at 10.16 percent in May this year and is expected to remain at a high rate for at least another year.

That puts pressure on the Indian economy as a whole and, more acutely, impacts the level of disposable income available to Indian consumers. While there are many tens of millions of people in India who will still be able to afford a broadband service despite the current inflationary pressures, the future growth of India's broadband sector relies on the availability and affordability of such services outside the more wealthy major urban areas.

The Indian government needs to think carefully about its broadband strategy and policies and take into account the impact that macro economic factors could have on the potential for India to be a truly digital economy.

Ray Le Maistre, International Managing Editor, Light Reading