Phone With Your Cable?

India's latest telecom legislation allows for voice functionality over cable TV and new wireless technologies

In the noise raised by the wireless in local loop (WLL) versus cellular telecom battle in India, one recommendation of the telecom regulator on access technologies seems to have been missed.

The Telecom Regulatory Authority of India (TRAI) in its "Recommendations on Unified Licensing" that has been codified into guidelines last week (Monday, November 10), said: "The technology neutral stance of the present licensing policy shall continue. Service providers shall also be free to use any media (e.g. telephone wire, telegraph wire (sic), TV cable, electricity wire, wireless) to provide telecom services."

Read that sentence again. It is fairly broad in its brush strokes. Besides traditional media like fixed-access wired lines and radio frequencies (used differently by code division multiple access, CDMA or global system for mobile communications, GSM, or even radio trunking networks to offer 'walkie-talkie' services), what the regulator and the government is saying is that it will allow other access technologies to be used to offer telecom services.

In the telecom world as we know it, this means that service providers can use access media like cable television networks or upcoming wireless standards like mobile voice over IP (Internet Protocol) to offer voice, data and other telecom services to customers.

Realists "� I call them pessimists "� have told me that this is just a statement of the government's intent and can easily "� and, perhaps, will "� be sideswiped when it comes to detailed regulations.

For instance, the quality of service for voice services over WiFi (a high bandwidth wireless data standard) can easily be doctored to make the provisioning of such services a non-starter.

Even so, I am excited given the potential of offering voice over non-traditional telephony media. Consider cable TV. Depending on whom you believe, India has between 35 and 60 million homes with cable TV.

A conservative estimate to go by, however, will be around 40 million, spread between the most urban pockets and the far-flung village in the hinterland. A few thousand cable TV providers service this phenomenally fragmented market.

There are two potential market segments that cable TV providers can attack.

First, the urban consumer who has extensive voice and data needs. The bigger among cable TV providers "� Siti Cable controlled by Subhash Chandra's Zee, INCable of the Hindujas and Rahejas' Hathaway Cable, to name three "� have steadily started offering internet access service on their and franchisee networks in the metropolises and in class B cities.

So have regional cable TV companies in states like Kerala and Orissa. This is an expensive process and companies have been charging up to Rs 2,000 a month for use-as-much-as-you-can access.

These cable TV systems are capable "� with some load balancing, tweaking and strategically chosen points of interconnect with other cable, landline or mobile phone networks "� of offering voice functionality to their customers.

This is likely to be a voice over IP offering and the quality will be a function of, among other variables, bandwidth. A sample cross-section of traffic "� especially, in small cities "� would comprise calls made within a radius of a few kilometres that could possibly be transported on a single cable TV network.

Clever pricing of the service, bundled with broadband internet access, would be compelling to customers. (The reverse of this is already happening with telecom companies offering cable TV services on their fibre-to-home networks.)

At the other end of this prosperous segment is the not-so-well-off rural customer, who can't afford a landline or mobile phone at current average revenue per user targets of telecom companies.

Drive through a slightly well-off village or a small town bordering a big city and you are likely to be greeted by the sight of cables carrying TV signals slung haphazardly and dangerously over treetops, houses, electric poles and, in some cases, even buried in the ground for short distances.

This segment of customers is eager to have a voice service of some kind and cable TV providers are ideally place to make the offering.

The quality of such a service, admittedly, will not be in line with telecom networks that are designed for 99.9 per cent service availability.

But at a low price of, say, Rs 50 a month for a voice offering, customers will be willing to accept a lower quality of service, which is up, say, 85 per cent of the time.

Millions of voiceless Indian could be wired into the network in a short span of time. And the beauty of this model is that small entrepreneurs "� as licensees of the big cable TV providers or in the form of co-operatives with access to cheap development capital "� can come together to make this transition happen.

The model could be replicated with other access technologies like mobile VoIP or something new that will come up stealthily as all new disruptive technologies do.

All that is needed is a benign telecom regulator in Delhi, backed by liberal state and federal governments. Let a hundred "� nay, a few hundred "� phones ring in this country.

Josey Puliyenthuruthel works at content company perZuade. His views are personal and may not be endorsed by his employer, the company's investors, customers or vendors. Comments may be sent to josey@perzuade.com