Monday, April 04, 2005

Dishnet to launch WiMax services

The Hindu: Dishnet to launch WiMax services

I think it was in year 2000 that Dishnet launched DSL services in India. I had returned from UK at the end of 2000 and was looking for something better than dial-up. Dishnet DSL was a strange set up. The connectivity to the home was not through the existing telehone wires. Landline telephony was still under monopolies BSNL and MTNL. So Dishnet set up a parallel infrastructure by planting a few DSLAMs here and there and stringing the standard twisted pair copper wires from there to the homes.

Despite this, it was great. The last mile connectivity was 64 kbps. The connection was always on. Every once in a while, almost every 15 days in fact, the wires will get cut for various reasons. We complain and they will come and fix it.

The initial set up charges were close to Rs. 30,000, non-refundable. I paid that! Then, for 1 GB throughput, we were charged Rs. 2,000 a month. This high cost structure went on for a while. At some point in time - I think in 2003 - the per month cost for consuming 1 GB came down to Rs. 1,000. The speed increased eventually to as much as 512 kbps. I continue to use this connection.

VSNL eventually acquired Dishnet's DSL business last year. The service levels have gone up considerably since then. There is no line fault (at least for me) and any small problems once in a while are well attended to. Almost immediately.

In the meantime, I switched my landline to Bharti's Touchtel (now called Airtel Landlines). The idea was that I could look at switching to their DSL connection. However a few experiments with their connection didn't help much. The quality and pricing were not comparable to Dishnet's (now Tata Indicom Broadband). So I continue to remain Tata customer for broadband.

Now BSNL has launched DataOne. It is unlikely that I will now get a BSNL line home (given that I struggled in closing the two lines I used to have with them!).


Now the news about Dishnet's wireless access. In the recent broadband policy document wi-max frequncies were to be de-notified so that anybody could use it to provide wireless Internet service. I am assuming that is what Sivasankaran's Dishnet Wireless is using. Again, by being a first mover, they are going to gain considerable market share.

Dishnet Wireless was focused in this area even when Dishnet DSL's business was being acquired by VSNL. Why weren't others interested as much in this business model?

Much more than DSL, wireless Internet delivery in India has higher growth potential. It calls for setting up tower infrastructure in a few places in the city.

Sify uses a different mechanism. They have line-of-sight wireless for adaptive broadband connectivity to their Iways and from there, are using cables for home connectivity. This doesn't look useful, given that cables in India are by and large of dubious quality. Last mile as wireless seems to be the most robust solution, and certainly competing with DSL.

Sivasankaran's Dishnet Wireless will not be technically as savvy and capable as Tata or Bharti, but they will roll out a working service, will offer aggressive pricing and will use low-end marketing techniques and acquire customers. Eventually some of the big guns may look at acquiring them at a good premium.

Why aren't others looking at a similar approach in rolling out infrastructure in different parts of India and hope to be acquired? It will generate wealth to entrepreneurs and also decent infrastructure to the country?


I was hoping that the new broadband policy will spawn several cable-tv-provider-like wireless Internet service providers in small towns. Get hold of a decent leased line or DSL connectivity or even satellite connectivity or a combination of these. Then set up wi-max towers locally and start offering at least always-on, low bandwidth internet connectivity in small towns.

Despite the hype, DataOne will take eons to move to small towns. They will always have equipment crunch. They will go through needless tender processes, corruption, delays, inefficiencies etc. before offering connections in every district in the country. One cannot be guaranteed decent service levels.

Providing a boradband service through DSL is quite different from providing GSM based mobile phone service. BSNL's mobile service survives because it depends purely on the centralised switch infrastructure, towers and making the sim cards available. Even here, BSNL always struggles in getting the sim cards out to the market. The cards are always in demand. They are constructing towers all the time, and that is one thing they will do well.

Providing DataOne service on the other hand is more complex. You need to roll out DSLAMs across the country in each exchange where you want to provide this service. You may have to replace the wires in some places. You have to provide equipment in every home. You will have to replace every faulty equipment (modem, router). There will be more customer calls to handle. There will be billing worries. DataOne, I think, will be a disaster.

Thus, there lies an opportunity for entrepreneurs, who can provide excellent customer service locally, to offer wi-max based Internet service across the country. Their business will get acquired eventually so money can be made for all the efforts.

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