Broadband Quality of Service Experience

Chennai, India November 3 2009

AgendaAgenda

• Broadband: atwhat cost ? – Helani Galpaya, LIRNEasia

• Innovation in Regulation: BB QoS monitoring– Chanuka Wattegama, LIRNEasiag

• Research Findings– Prof Timothy Gonzalves TeNeT/IIT‐MProf. Timothy Gonzalves, TeNeT/IIT M

• Panel DiscussionChair Prof Ashok Jhunjhunwala TeNeT/IIT M– Chair: Prof Ashok Jhunjhunwala, TeNeT/IIT‐M

– Operators

About LIRNEasiaAbout LIRNEasia

“T i th li f th l f th i A i• “To improve the lives of the people of the emerging Asia‐Pacific by facilitating their use of ICTs and related infrastructures; by catalyzing the reform of laws, policies f y y g f f pand regulations to enable those uses through the conduct of policy‐relevant research, training and advocacy with emphasis on building in‐situ expertise”emphasis on building in situ expertise

• A regional ICT policy and regulation think tank– Scope: Asia (Pacific)

• Research focused, not project implementation (except pilots)C t l h i Af h i t B l d h I di• Current cycle research in: Afghanistan, Bangladesh, India, Indonesia, Maldives, Pakistan, Philippines, Sri Lanka, Thailand (‘SAPTI’)

Broadband : at what cost? 

Some evidence from emerging AsiaSome evidence from emerging Asia 

Helani GalpayaChennai, India 

November 3 2009

Mobiles: high growth through market mechanisms in Asia

Nepal

Afghanistan

Bangladesh

Pakistan

India

Sri Lanka

Pakistan

0 20 40 60 80 100 120 140

CAGR 2003-08 Active SIMs/100 inhab 2008

Source: ITU, data as of end 2008

Lowest Total Cost of Ownership in the world in South AsiaSouth Asia

Four S Asian countries in less-than-USD 5 TCO club amongFour S Asian countries in less than USD 5 TCO club among 77 emerging economies (average TCO = USD10.88)

Helped by budget telecom model that is characterized by…

L ARPU’• Low ARPU’s – Average ~USD 5 (Bangladesh USD 2 for some operators)

• Mostly (over 80%) prepaid• Mostly (over 80%) prepaid– low cost of serving (no bills, electronic re‐load, minimal 1‐800 

customer care))– low customer acquisition cost (~USD 3.5)– low/no credit risk (pre‐paid and cash)– Regional negotiations for equipment; managed networks; 

• Low(er) Quality  necessary feature in early stages“ bl ” ll d 2 f US/EU– “acceptable” call drop rates x2 of US/EU 

• High margins for operators  (decresing)

Has given access to basic voice services even to those at the Bottom of the Pyramid (BOP) in Asia

d h i h l 3 th

Bangladesh Pakistan India Sri Lanka Philippines Thailand

Used a phone in the last 3 months

% of BOP (outer 

sample)95% 96% 86% 88% 79% 77 %

Bangladesh Pakistan India Sri Lanka Philippines ThailandBangladesh Pakistan India Sri Lanka Philippines Thailand

% of BOP (outer 

sample)82% 66% 65% 77% 38% 72%

• Sample of over 11,000 BOP (SEC D and E) citizens.  Indian sample size over 3 5003,500.  

Even to the BOP Rural Areas in IndiaEven to the BOP Rural Areas in India

Last time respondent made/received a call (% of 

90%

100%

BOP teleusers)

60%

70%

80%

2‐3  months ago

30%

40%

50%

60%1‐2 months ago

About a month ago

2‐3 weeks ago

10%

20%

30% 1‐2 weeks ago

In the last one week

Yesterday / Today0%

Urban Rural

IndiaIndia

Ownership is less impressive but highOwnership is less impressive, but high…

Total phone ownership (% of BOP teleusers)

owners

43% 41% 45%

73%63%

91%owners

43% 41% 45%

l d h ki di S i k hili i h il d

• Most choose to own a phone (rather than use others’ phones) for convenience; cost is secondary

Bangladesh Pakistan India Sri Lanka Philippines Thailand

convenience; cost is secondary

and growing Highest growth in India…and growing.  Highest growth in India

73%63%

77%

91%

Total BOP phone ownership: 2006 vs 2008 (% of BOP teleusers)

131% 

43%36% 41%

19%

45% 41%54%

63%increase

2008 2006 2008 2006 2008 2006 2008 2006 2008 2006 2008

Bangladesh Pakistan India Sri Lanka Philippines Thailand

But in Broadband, India falling far behind OECD countries

30itan

ts

Broadband penetration

20

25

30

per 100 inha

bi

15

20

d subscribers p

5

10

xed broa

dban

d

0

2000 2001 2002 2003 2004 2005 2006 2007 2008Total fix

India United Kingdom United States China Japan Germany

And compares only moderately against South Asian peers

Broadband subscriber per 100 SAARC countries

5

6Broadband subscriber per 100, SAARC countries

3

4

2

3

0

1

2000 2001 2002 2003 2004 2005 2006 2007 2008

Bangladesh Bhutan India Maldives Nepal Pakistan Sri Lanka

But even in the absence of 3G/“real‐mobile BB” speeds, appetite for Mobile BB is high, and growing 

120 000 000

140,000,000 

Access to BB: fixed vs. mobile

80 000 000

100,000,000 

120,000,000 

40,000,000 

60,000,000 

80,000,000 

1:19 ratio in favor of mobile

0 

20,000,000 

40,000,000

June 2008 September 2008 December 2008 March 2009 June 2009

Wireless subscribers capable of Accessing Data services/Internet 

Fixed subscribers (all types)( yp )

In the fixed BB world DSL is dominatesIn the fixed BB world, DSL is dominates 

Ethernet/LANCable Modem

“Broadband” Technology Market share Quarter ending June 2009

4% Fiber1%

Wireless1%Other

0%

7% Leased Line0%

DSL87%87%

Ethernet/Lan Fiber Wireless DSL Other Cable Modem Leased Line

….and has been growing, leaving other fixed technologies behind

6,000,000 

7,000,000 

Technology Trend for Broadband ‐ India

4,000,000 

5,000,000 

, ,

crib

ers

2,000,000 

3,000,000 Subs

‐

1,000,000 

April– June 2008 July– September 2008

October–December 2008

January– March 2009

April–June 20092008 December 2008 2009

Ethernet/Lan Fiber Wireless DSL

Other Cable Modem Leased Line Radio

Pre conditions for high access and usage of BBPre‐conditions for high access and usage of BB

Coverage Regulatory barriers exist (e.g. spectrum)

Affordable Access Technology

BroadbandGrowth Services

(e.g. IPTV, VoIP, e-ticketing, t )

- Reasonable QoSE- Some evidence

e-governance etc)

Low cost Terminals

provided today

-community accesscheaper computers?Low cost Terminals -cheaper computers?

-”mobile-like” terminals

Prices are generally headed in the right direction: g y gdown.  India has very competitive wholesale pricing

25,000 

Annual cost in USD for a 2Mbps, 2km DPLC (tail cost)

20,000 

10,000 

15,000 

5,000 

‐

Bangladesh Pakistan India Bhutan Sri Lanka Maldives

February 2008 October 2008 February 2009 October 2009

Retail prices also coming down: e.g. 2MBps Business connection prices in India dropping

70000

Annual cost in USD, 2Mbps Broadband business connection (unlimited download)

50000

60000

70000

30000

40000

0

10000

20000

0

Afghanistan Nepal Pakistan India Bhutan Sri Lanka Maldives

February 2008 October 2008 February 2009 October 2009

Prices are low/reducing on basic residential packages also.  India on par with regional peers

A l t 256kb B db d id ti l ti ( li it d

8,000

Annual cost, 256kbps Broadband residential connection (unlimited download)

6,000

7,000

8,000

3,000

4,000

5,000

0

1,000

2,000

0

Afghanistan Nepal Bangladesh Pakistan India Bhutan Sri Lanka Maldives

February 2008 October 2008 February 2009 October 2009

Mobile BB: India is not competitive, for obvious reasons

9

Price per GB, 1Mbps speed, 1GB data limit mobile internet. In USD

6

7

8

4

5

6

1

2

3

0

1

Pakistan India Bhutan Sri Lanka

Sources: India, http://www.bsnl.in/service/3G/3G_files/3g.htm / INR 399 for Day/anytime 1GB of usage. Pakistan (http://www.mobilinkinfinity.com/tariff/ Mobilink Infinity 5GB limit at 1MBps speed. Bhutan http://www.druknet.bt/btelecom/GPRSEDGE3G.html . Pakistan http://www.mobitel.lk/broadband/postpaid_internet.html

But price comparisons need to be done in relation to what the consumer gets i e actualconsumer gets – i.e. actual experienced speed per USD or p p pRupee paid