COMMONWEALTH JOURNAL OF COMMERCE & MANAGEMENT RESEARCH SOCIAL AND ECONOMIC IMPACT OF TELECOM SECTOR IN INDIA: A CASE STUDY OF BROADBAND SERVICES

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1 SOCIAL AND ECONOMIC IMPACT OF TELECOM SECTOR IN INDIA: A CASE STUDY OF BROADBAND SERVICES P. Ramesh Babu Research scholar, Department of Management Studies, S.V. University, AP S. Durga Rao Professor, Department of Management Studies, S.V. University, AP ABSTRACT The telecom services have been recognized the world-over as an important tool for socioeconomic development for a nation and hence telecom infrastructure is treated as a crucial factor to realize the socioeconomic objectives in India. Accordingly, the Department of Telecom is formulating developmental policies for the accelerated growth of the telecommunication services. Broadband is a way of promoting economic development and social benefits Broadband service plays a vital role in telecommunications and its impact more than any other services. The purpose of this study is the broadband services in India and this study measures, how Broadband infrastructure allows country wide facility likes health, energy, education, health care, banking, other services etc. and discussed the bottleneck issues regarding developments of broadband. The study concluded with measures should be taken to resolve the issues of broadband. Keywords: Broadband, Economic & Social Growth, Telecom sector, India 1

2 INTRODUCTION Telecom services are recognized worldwide as an essential tool for the socioeconomic development of the nation. In India, telecommunications services at present world second largest market, it is fastest growing market in the world and registered success during the years and responsible for India s economic growth. The registered success in the telecom sector has been facilitated by liberalized policies by Indian government sector that provide easy market access for telecom equipment and offering telecom services at affordable prices. The deregulation is one of the prime supports of FDI flows made the sector one of the fastest growing and top five employment generator in the country. Telecommunication has supported the social and economic development of India and has played an important role to bridge the gap of rural-urban digital divide. It helps increase the transparency in of government with the introduction of e-governance, support for education, health, employment and business to the society. The major sectors in the telecommunications in India are telephony, internet (broadband), data centers and broadcasting. THEORETICAL BACKGROUND Assessment of ICT, mainly based on the expected benefits of users, cut cost of services, overall quality and governance, agencies implementing in the project increasing in transactions and revenues (Deepak Bhatia at.al, 2009). Internet and broadband are contemporary issues given high impact on the socioeconomic development of the country. Higher penetration can be expected 1.08 percent for every 10% increases in the number of subscribers. It shows a greater growth dividend (Rajat Katuria and Mansi kedia Jaju, 2013). Broadband technologies provide a mix of data, voice and video services over a single coaxial cable. ITU and OCED have defined broadband as a capacity of at least 256kbps in the upload and or downlink speed. The impact of broadband has become a very broad area of research, the related impact on individual 2

3 focuses on time saving, work from home, digital citizenship, online education and online government services to individual (Lisa F Seymour and Megen Naidoo, 2013). Broadband impacts on employment, wages, quality of the labor force, quality of life (William H Lehr, 2006). The positive relationship between broadband expansion and employment growth of various industries, but it varies industry to industry. It exhibits more on information, finance and insurance, professional, scientific and technical services than other service leads local employment development, local business and households to connect larger market (Jed Kolko,2010). The role of the internet is forced to foster development in exports and imports. The agriculture and rural development in the rural regions of the country impacted by e-governance services and in support of ICT and wireless technologies (Kalpana Choudary at.al, 2011). There is interconnection between broadband and e-commerce and e-governance. The development of e- governance and e-commerce service impact on the demand side factors and the supply side actions of broadband policy and also directly impacted on the development of broadband (Peter Turkman and Tomaz Turk, 2009) RESEARCH OBJECTIVES In order to find the social and economical impact of broadband services in India, there is a need to study related literature regarding impact of technology. To this end based on literature review research objectives are formulated. To know the overview of broadband services in India. To study the social and economic development toward broadband services. To find challenges faced in the process of deployment of broadband services. To suggest the measures for development of broadband. OVERVIEW OF BROADBAND A high speed, affordable broadband connectivity to the internet is the foundation stone of modern society, offering widely recognized economic and social benefits. Broadband is just not 3

4 an infrastructure, today a widespread broadband connectivity offers various new services and an information revolution to change and challenge to the development of the society. Countries use appropriate policies and strategies to make broadband available, affordable and accessible as a vital development enables for building sustainable societies. It is necessary to integrate everyone into modern life with education, culture, entertainment and health care, financial and commercial services. Public sector coordinated with the private sector and work together to achieve this, in this practice the government acting as a regulator to pass legislation, establish appropriate competition and provide government services, education and health services on the web. The private sector also partnership with public sector investing latest generation networks in both fixed and mobile broadband. Such partnership is most important in rural and remote areas for digital divide by integrating all people by connecting them via existing and private networks. It is essential to integrate everyone through education, culture, entertainment, health care, financial and commercial services, weather forecasts, price of agriculture products, fertilizers, local weather services etc (TRAI, 2009). The information revolution may grow day-by-day with the use of internet enabled services in all parts of our lives. It is era of mass connectivity and delivering small and incremental changes transform to development and global welfare. Mass connectivity with broadband can improve our lives in a innumerable ways by providing better access health services, enable financial services with m-payments, empowering people through online education and creating transparency in government. Broadband is essential to strengthen the growing global digital economy and developing countries cannot afford to fall behind either in their rollout or policy towards broadband networks and services. The analysis of the growth and current status of broadband depends partly on how broadband is defined, since the exact definition of broadband affects subscriber and growth statistics. ITU and OECD have defined broadband as a capacity of at least 256kbps in the uplink or downlink speed. The broadband commission for digital development has defined as high speed internet access which is always on and capable of multiple service provision 4

5 simultaneously, in terms of speed, steady growth continues in both theoretical and actual access speeds or data throughput capacity (ITU, 2012 ). Broadband status in India Ministry of communication and information technology and department of telecommunications initiated a broadband policy in 2004 in view of recognizing the potential and ubiquitous of broadband services in India in growth of GDP and the development of quality of life through social applications including tele-education, tele-medicine, e-governance, entertainment and employment generated by the way of high speed access to information and web based communication. Broadband connectivity is defined as per broadband policy 2004 an always on data connection that is able to support interactive services including internet access and has the capacity of the minimum download speed of 256kilobits per second (kbps)to an individual subscriber from the point of purchase (PoP) of the service provider intending to provide broadband services where multiple such individual broadband connections are aggregated and the subscriber is able to access these interactive services will exclude any services for which a separate license is specifically required, for example, real time voice transmission, except to the extent that it is presently permitted under ISP license with internet telephony. There are no uniform standards for broadband connectivity moreover; various countries follow various standards for broadband connectivity (Broadband policy,2004). Broadband services: The telecom industry one of the fastest growing sectors in the India and it has witnessed significant growth over the last decade in terms of subscriber base and network coverage. It is the second largest sector in the world after China. The total number of telephone as on 31 st April 2015was million. The number of broadband subscribers increased to million. Teledensity is an important indicator of telecom penetration and it is increased to be The number of broadband customers, including fixed and mobile broadband reached to million (TRAI, 2015). 5

6 Economic and Social implications of broadband services Next-generation national broadband networks (NGNBNs) offer countries, the rapid transfer of information, services and providing the benefits are promoting overall growth, productivity and prosperity (Booz &Co, 2010). ICT, particularly broadband brought rural areas much closer to the market and have improved business transactions. It seemed as a powerful tool for inclusive growth. Broadband will help service providers to realize new revenue streams. The broadband eco system includes application and content such as , NEWS, maps, entertainment, e-governance, e-commerce, e-banking. e-education and e-health. E-education: It is one of the goals of United Nations, the millennium development goals is to achieve universal primary education. Various initiatives are formed by government for increasing use of ICT in education. These are Provided computer aided learning (CAL). ICT in school to provide opportunities to secondary stage students for develop ICT skills and higher secondary school will be serving with broadband connectivity up to 2Mbps. Encouraging IT policies for use of information technology in school, college and educational institutions and participation of private entities for providing the IT infrastructure and training for encouraging digital literacy. E- Health It also one of the most important area, where broadband can make an impact. Tele medicine is delivered by broadband as medical advising, monitoring, diagnosing and training delivered through broadband. Educate the professional in all the sectors through broadband video and other applications of broadband. It also one of goal of MDGs which include reducing child mortality, improving maternal health, combating HIV/AIDS, malaria and other deceases to take advantage of ICT particularly broadband. ICT in health care can reduce the costs and help to 6

7 mitigate the impact of the crisis. Broadband can be leveraged to achieve higher capacity and quality in health care segment. ICT have made impact on health providing public health information, collaboration and cooperation among health workers. A national e-health portal should be delivered to share information and facilitate provision of health care services. E-commerce E-commerce is used, business transactions to create transformation and relationship for value creation. Online activities improved through e-commerce. A very large number of small and medium scale enterprises also should benefit with e-commerce. As well as B2B market also increased and more bandwidth required for providing facilities to its consumers. E-banking Financial services to citizens in rural areas are unrealized dream for developing countries. A large percentage of the rural population does not have a deposit account which means do not access even basic financial services. As apart by using the internet the transaction cost in the banking sector drastically reduced. So RBI also actively involved in technology for the development of the Indian banking sector and expenditure on computerization and development of communication also registered growth up to a substantial level. E-governance Government of India also plans for made all the government services accessible to common man. It is implemented through formation of national e- government plan at three levels. State wide area networks (SWANs), state data centers (SDCs) and common service centers (CSCs). Department of Telecommunications (DoT) planned to deploy a number of service centers in rural areas all over the country to deliver e-governance services. They provide high quality and cost effective video and data services in the areas of e-governance, education, health, agriculture and entertainment. Challenges and suggested policies: Improving diffusion and usage of telecommunications is restricted by different factors like literacy status, status of woman and lack of good infrastructure etc. There are several challenges for developing country like India (Economic survey, 2015). 7

8 Education challenges: Only 73 percent literacy has been achieved (as per census 2011). Skills of the youth: Technological challenges Female literacy needs to be improved 64.6 percent compared to 80.9 percent male literacy. Overall standard of education system below the global standards. Need to focus on building quality education, skill development and infrastructure. The Indians formally skilled work force is approximately 2 percent (labor bureau report 2014). As per the National Skill Development Corporation (NSDC) the incremental requirements of skilled persons are120 million in the non farm sector (from ). Employment growth rate very less approximately 0.5 percent. Quality employment generation is a major impediment. Poverty level: BPL level is 21.9 percent. Population increases demand for every key services increases. The Digital divide is a major problem. Teledensity in urban region is and in the rural region is The growth of broadband and manufacturing sector to fulfill the bandwidth requirements. Measures: 1. Need to plan for national network through the National optical fiber plan (NOFP). Broadband connectivity can carry vital content related to education, health services, market intelligence, agricultural information etc, which can 8

9 CONCLUSION transform communities. A national wide broadband network needed for this. NOFN initiated to trigger a broadband revolution in rural areas by creating a robust infrastructure for reaching broadband connectivity Gram Panchayat called Bharat One project. Broadband based on various technologies DSL, Cable modem and Optical fiber etc (NOFN Report 2015). 2. A long term perceptive, evaluates various technological options for better price performance ratio and technologically more efficient. 3. Integrated service providers provide multi protocol and multi service network that can cater to voice, data and video. 4. TRAI undertook a detailed report on the growth of telecom sector in rural India. It gives recommendations Sharing of infrastructure to obtain support from the universal service obligation. Development of suitable applications. Discount annual license fees and spectrum charges. Marketing strategy needs to be used specifically to target woman. To date, market forces were sufficient to extend the technology beyond successful enclaves in major cities, due to cost constraints (high PC prices, in particular); lack of compelling local content; limited availability; and a fragmented group of industry operators, particularly cable providers. India stands at 117 th position out of 159 in the global ICT development index. Several countries like U.S, JAPAN, Australia, and Canada identified broadband as potential infrastructure enabling the national economic and social growth by creating a high speed broadband network ahead of India. 9

10 REFERENCES 1. Jed kolko (2012), Broadband and local growth, Journal of Urban Economics 71 ( ). 2. Kalpana Chaudhari, Upena Dalal&Rakesh Jha (2011), E-Governance in Rural India: Need of Broadband Connectivity Using Wireless Technology, Wireless Engineering and Technology, 20, Karim Sabbagh, Jai Sinha & Abhish Sharma (2010), Bringing Mass Broadband to India, Role of Government to Industry, Booz&Co. 4. Lisa F Seymour&Mogen Naidoo(2013), The usage and Impact of Broadband, A South African household analysis, The electronic journal of information systems, volume 6 issue 2, ( ). 5. Peter Trkman &Tomaz turk (2009), A conceptual model for the development of broadband and e-government, Government Information Quarterly 26, Rajat Katharia &Mansi Kedia JaJu (2012), India: The Impact of Internet report, ICRIER 7. William H Lehr, Carlos A Osario, Sharan E Gillett & Marvin A Sirbu (2006), Measuring broadband s Economic Impact, 33 rd Research conference on communication, Information and internet policy. 8. Economic Survey report (2015), Government of India 9. National Broadband Policy 2004, Department of telecom Sector, Government of India. 10. National Optical Fiber Network (NOFN), Annual report Telecom regulatory authority of India (TRAI) report, TRAI Press release No.39/