Need For Unbundling Local Loop In India

This is about my most recent experience with my broadband service. Ten days back, the ADSL modem supplied and installed by my broadband provider had become erratic. The trouble to get a correct response from the operator about what can be done about it took a total of 13 days from the time the problem was encountered! So, I decided to deactivate from the service.

As of this moment, my application with the other service provider is still under progress and may take another week before I can go back to a wire-line Internet from my wireless rig-up.

I feel that there is a strong case for unbundling the local loop in India…

The Wireless Obsession

The entire country is obsessed with the mobile services and how they are run – from accountants, lawyers to politicians. They have been trying to advice how spectrum is being allocated in this country and how the pricing for spectrum should be administered.

While this is on, another important asset of the nation – the copper cables on which telephone lines are delivered in the last mile / few yards is left out, with little attention. That this is badly needed is highlighted by the difficulty in changing service provider that I have now encountered.

Lack of competition

The reason why I am adding to the statistics on subscriber churn of my current service provider, whose business at a gross level is something that I have great admiration for, is partly because of a small and immediate irritant – just a trifle.

More importantly, it is owing to the fact that, for my usage pattern (mails with large attachments, teenage kids, torrents, OTT Video usage etc.) I can get a better price plan (at half-price) from a competing provider of services (the unknown devil; could be worse too)!

But, the price level per MB transferred in India is still one of the expensive levels in the world, per reports that I have read in the past. The lack of competitive forces is what I blame for this. If the Government should really think of making protecting consumer interests better in this country, they ought to consider bringing an LLU regime seriously.

So, what options do they have…

The PTT model

In an earlier blog, “A New Era For PTTs”, I had written about the creation of NBN Co, a Crown-held entity, in Australia. Similar Crown-held entities have been formed in New Zealand, as well. The NBU was created by an Act of the Parliament, have been entrusted with the job of setting up FTTP/H services to the entire population, the responsibility to operate the access network including copper based assets (previously owned by Telstra)  and to offer them at a fair price to any Service Provider.

The GOI could create a new entity – with personnel from BSNL/MTNL – to manage, maintain and modernize wire-line and hybrid access.

The EOI model

We are all aware of the model that has been in place in the UK with the creation of a fiercely independent LOB of BT called OpenReach. OpenReach operates as a Line of Business of British Telecom – but operated in a fiercely independent manner on the principles of Equivalence of Inputs. They invest in network and B2B IT to make the access network available at same terms and conditions to any Service Provider in the UK.

Likewise, a part of BSNL/MTNL can be made a new Line of Business with a strong commitment enforced by regulation to maintain Equivalence of Input. Going back to my days with a GSM operator in India, in the past, this can be very difficult in Indian conditions.

Besides, it is only the British (as someone said) who can have monarchy and democracy in the same breath and yet not have a bad breath 🙂

The Free-Market Model

All the above presupposes that BSNL/MTNL, the erstwhile PTTs, have established connectivity to all premises in the country and that other operators don’t. This may have been the case twelve years back when private wireline operators started their business.

Today, many of these operators may have invested in their access network.
It is then a question of the Regulator setting a fairness framework for co-location and wireline rental that is accepted across all operators. This may be easier to achieve and will definitely benefit the consumer in a big way.

But, I wonder if this area is on the radar of the powers-that-be at all!

Note: The pics used in this post are sourced through a search on the Internet. The author does not make any claim to ownership nor is it that the pictures have been used in the context for which the original pictures were meant.


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