Long-distance optical fiber infrastructure in India: an analysis
Until recently, the extraordinary growth in the mobile industry and ever-increasing demand for capacity from the enterprise segment have ensured that long-distance connectivity is a premium resource in India. However, with a series of fiber investments from a host of newer players, the national long-distance market is heading towards a “bubble” as supply far exceeds the current demand for capacity. But international connectivity on certain routes still commands a premium in the market and there is scope for selective investments by operators, especially in routes to the Middle East and Asia-Pacific.
Executive summary
In a nutshell
Ovum view
Commoditization is approaching faster than originally expected
Selective investment opportunities for operators
Enterprise demand is driving growth in international bandwidth
A “bubble” in the making for the national market
Broadband will be the key demand driver
Recommendations
Service providers
Bundled solutions are the way forward
An international price war is not inevitable
Focus on moving away from price as a key differentiator
Regulators
Encourage competition from wholesale “value-added” bandwidth resellers
Equipment vendors
Demand from service providers has shifted to integrated SDH/DWDM solutions
Setting the stage: current state of play
Domestic market
Role of utility players
International market
Bandwidth pricing
International services
Domestic services
Market drivers
High demand for broadband
Changing needs of enterprise market
Government initiatives will foster demand for data
Key challenges
Declining share of revenue from wholesale voice
Double taxation for value-added resellers
Increased competition leading to delayed payback times
Aggressive price erosion
Cost of optical fiber rollout
On balance there is strong underlying demand
Impact of new investments
Future outlook
A price war possible, but not inevitable
Case studies
Tata Communications
Organization
Backbone
Service delivery
Future strategy
Aircel
Organization
Segmentation strategy
Product offering
RailTel
Organization
Network reach
Co-location services
Alliance between the utility players
Appendix
Methodology
In a nutshell
Ovum view
Commoditization is approaching faster than originally expected
Selective investment opportunities for operators
Enterprise demand is driving growth in international bandwidth
A “bubble” in the making for the national market
Broadband will be the key demand driver
Recommendations
Service providers
Bundled solutions are the way forward
An international price war is not inevitable
Focus on moving away from price as a key differentiator
Regulators
Encourage competition from wholesale “value-added” bandwidth resellers
Equipment vendors
Demand from service providers has shifted to integrated SDH/DWDM solutions
Setting the stage: current state of play
Domestic market
Role of utility players
International market
Bandwidth pricing
International services
Domestic services
Market drivers
High demand for broadband
Changing needs of enterprise market
Government initiatives will foster demand for data
Key challenges
Declining share of revenue from wholesale voice
Double taxation for value-added resellers
Increased competition leading to delayed payback times
Aggressive price erosion
Cost of optical fiber rollout
On balance there is strong underlying demand
Impact of new investments
Future outlook
A price war possible, but not inevitable
Case studies
Tata Communications
Organization
Backbone
Service delivery
Future strategy
Aircel
Organization
Segmentation strategy
Product offering
RailTel
Organization
Network reach
Co-location services
Alliance between the utility players
Appendix
Methodology
LIST OF TABLES
Table 1: Major NLD licensees and their network size (route kilometers)
Table 2: International cables connecting India
Table 1: Major NLD licensees and their network size (route kilometers)
Table 2: International cables connecting India
LIST OF FIGURES
Figure 1: Annual charges for E1 connectivity from India to the US
Figure 2: Broadband subscriber growth: 2006-14
Figure 1: Annual charges for E1 connectivity from India to the US
Figure 2: Broadband subscriber growth: 2006-14
