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Why is internet so damn expensive in India ?

We have been paying exceptionally high internet bills for years now and its not because internet is expensive, its just because the reasons behind it makes it so darn expensive. Till date, the average internet speeds in the Indian homes is 2Mbps, which is such a shame. Countries like South Korea, Singapore, Malaysia, Japan being in the same continent, have an average internet speed of 15Mbps per household and they have reasons to win the situation. 

Every now and then we see people outcry about FUP policies, high bandwidth prices, plans etc . for broadband in India. We see petitions, blame-game but what is the reason for all this, why its so costly here in India. What is hard in providing high speed internet to users on affordable prices ?

Here are the reasons :

Limited International Bandwidth :

Its your ISPs, who are paying a lot to acquire the international backbone, because internet is all about connectivity, if we don’t have required bandwidth on international network, then we don’t have internet. And there is not much bandwidth import in India, till date with the telco providers as well. Unless its in abundance, there is no way your ISP can beef up their backhaul and then serve you with better speeds.

Exceptionally high Internet Transit Costs :

Internet is all about connectivity, and India is connected to the major internet data center hub at Singapore through submarine cables. This transit costs exceptionally high. Unless the transit cost gets low, there is no way, India is going to get cheaper internet.

Price of getting content to India which involves legitimate costs of long haul transport via Submarine cable but weird costs like ILD license, associated fees, cable landing station fees and much more.

Lack of enough Internet Gateways in India : 

India currently have only 4 internet gateways : Chennai and Mumbai (major), Agartala and Kochi (useless). Any city which is closer to Mumbai and Chennai gets  a bit of luck for cheaper transit costs from Chennai data centers to their own, but others have to pay that big fat bill to reach the internet. Unless we have like more dedicated Internet Gateways, like an Eastern gateway may be in Bhubaneswar or Vizag or Kolkata, East India will suffer, as we are too far from the gateways itself and bringing the transit from chennai or mumbai costs amazingly high.

Lack of Private Internet Exchange Points (IXP) :

India is a country where everyone waits for the other to take the step, and this is never ending, eventually resulting in zero results. We still have not a single private internet exchange point. The Govt should immediately work on this and have atleast 1 dedicated nonprofit carrier-neutral Internet Exchange Point in each side of India – EAST (Kolkata), WEST (Mumbai), NORTH (Delhi) , SOUTH (Chennai). Unless this is happening, forget about low cost high speed internet!

Lack of efficiency of NIXI :

NIXI (national internet exchange of india) is largely to blame with ridiculous licensing per bandwidth fees for use of their gateways. It’s baffling that a not-for-profit semi-government organization has such high costs. It’s an issue of red-tapism/license raj I suppose. Nixi much like BSNL is a very slow and inefficient government body. Essentially the indian government wants to control the flow of net traffic with the NIXI monopoly. We need NIXI to act as a non-profit and get all the ISPs in India to peer with them immediately to save the international transit load. Without it, cheaper Internet is a dream.

Cost of Setting up Datacenters in India :

Costs of setting up datacenters in India are extremely high. The highest power tarriff slab is incredibly expensive, and laying cables requires costly licenses. There’s other bullshit that companies have to deal with like the current ISP’s corporate mafia bribing state government municipalities to “repair” roads where fiber optic cables have been deployed – completely destroying them. And importing a server from USA, costs double of the price in USA. If you are building a data center and your budget is 1 million, it becomes instantly 2 million, once the import costs and duties are added.

Taxes, Duties & Fees :

All thanks to the spectrum costs, permission costs, special love AGR taxes to the ISPs. If the govt wants to earn from the telecom providers and the ISPs, they should not be expecting the provider to provide the best of their service, as no one is going to run their business for loss.

Permission Issues :

For everything in India, you need the damn permission and for that, you have to run those Govt offices for like months and years and waste your time and money. The term “Digital India” or “Smart India” is a pure joke, without proper internet connectivity. If the govt wants to call it a Digital India, they need to help the ISPs and IXPs and telecom providers with all kinds of permissions instantly and free of cost.

Lack on Public Demand :

Because most people in India don’t want to pay the extra money for that faster internet costs.
Fast internet (e.g. 100Mbps) is easily available in India, and costs pretty much the same as in the US ($100 per month) but nobody is buying. Everybody likes to complain about the “lack of options” in India, but when it comes to putting money down, most of them choose the cheaper, slower plans.

Backhaul Capacity & Expenditure :

The capacity of the backhaul network determines internet speeds. The backhaul is mostly a fiber optic network. India is still lagging behind in the installation and operation of high bandwidth fiber optic networks. Most of the backhaul networks were installed a while back and were designed keeping the traffic of those days in mind. Installation of a new network involves digging up alongside roads and laying cable and supporting equipment – all of which increases the expenditure. Also, India is such a big country, it wont be possible for any provider to cover the huge area, unless the Govt supports.

Public Money Mis-use & end of Monopoly :

Again this goes to Govt. , I am sure that planners and policy deciders at MTNL, BSNL those are funded by public money even when are in loss has nothing to do with profitability and hence they don’t give damn to service, plans.. I see BSNL has everything yet nothing. Plans are super stupid, they are always presented as if I am reading a periodic table and grouping elements (Plans) on their properties.. They decide for change when its too late, they start so many things but most of them remains just announcement. So our money was wasted to create infrastructure but never publicized in order to get returns on investment.

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