The Telegraph
Since 1st March, 1999
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Reliance spotlight on broadband

New Delhi, Dec. 27: Reliance Infocomm is likely to announce a roadmap for its broadband business on the occasion of Dhirubhai Ambani’s birthday on Sunday, along with the announcement of its pre-paid scheme for its mobile phone users.

While the Reliance executives were tightlipped about the pre-paid scheme, industry observers feel that it may trash the plan since the price gap is of 50-75 paise between the post-paid rates of the cellular mobile operators using the global system for mobile (GSM) communications and mobile rates offered by Reliance.

However, sources in Reliance said the company has already committed to launch the pre-paid scheme at its annual general meeting and included in the annual report.

“It will be difficult to go back on it since the shareholders will have to be given reasons for the volte face and it can be tricky situation if you are planning a public offer,” said a senior Reliance Infocomm executive.

“A few attractive pre-paid packages have already been firmed up and a market study has also been conducted. I cannot comment further about the fate of the plan since the decisions are to be taken from our headquarters in Ahmedabad,” sources said.

However, Reliance is confident about its plans to use broadband as its vehicle for growth of its infocomm business. A recent study by PricewaterhouseCoopers on the broadband’s future is a major source for drawing future course of its infocomm business in India.

The company will have to fight for a place in the broadband market along with Bharti, Bharat Sanchar Nigam Ltd and the Tatas. All the three operators have the first mover advantage in this emerging market.

“We have already started the fiberisation of more than 2.5 lakh buildings in more than 80 cities in the country. Space for offering the broadband service has been acquired in about 70,000 buildings. With gigabit ethernet connectivity, we will offer a full suite of voice, video, and enterprise applications. In addition to wiring more than 35,000 route kilometres out of the proposed 60,000 route kilometres, we have also tied up with more than 50 international carriers for additional bandwidth,” said a senior Reliance Infocomm executive in charge of rolling out its broadband activity.

The PricewaterhouseCoopers report says the the killer application for the broadband and internet access between now (2003-04) and 2006 will not be the distribution of professionally-produced content such as today's television programme or movies.

“The major impact of broadband over the next three years will be the addition of video to existing applications, including video conferencing, messaging and gaming and the development of new applications that rely on user and community provided video content,” predicts the report.

The report has suggested that network operators will need to invest in infrastructure that allows them to provide network connections with symmetric bandwidth. Most of today’s residential broadband connections are asymmetric which is efficient when the primary application for broadband is the downloading of content.

However, some of the most important applications will involve two-way interaction between individuals and groups and those applications need symmetric bandwidth.

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