Broadband in the Backwaters: Ortel Communications Limited

Abstract

Owing to rapid technological changes, convergence of media has led to the availability of “triple play” (i.e. voice, video, and Internet) on a single channel. In this context access to the last mile or the customer premises equipment is critical. In India, traditionally this has been provided by two separate streams: the cable TV network providing TV services and the telecom network, providing telecom/Internet services. To date, the number of fixed line phones is nearly 45 million, while the number of cable TV connections is estimated around 85-90 million. Of late, some of the telecom companies (BSNL, MTNL etc.) have upgraded their networks to provide for DSL connections to handle broadband Internet (always on connection) to their subscribers especially in metro and urban areas. On the other side, cable TV companies have had limited experience of using their existing networks for broadband service. The cable network operators have found it difficult to provide broadband connectivity through TV owing to the poor quality of their existing infrastructure, cost of upgradation for reverse carriage of signals from customers premises to the ISP, and high cost of set-top boxes required for Internet connectivity. The emergence of VOIP has further emphasized the need for broadband connectivity to customer premises. In this scenario, the experience of a small startup company, Ortel.net, that has the vision of providing triple play through a cable network in one of the most backward states of India, Orissa, would provide a basis for raising issues related to technology acquisition, growth, and financing. The vision to have the cable network enabled for triple play right from inception and to leverage it to provide services using the latest technology would highlight some of the managerial and technological challenges that this company faced. Moreover, the stated strategy of the company to move through second level cities for expansion would provide a platform for discussing the issues of market segmentation and challenges faced by a smaller company when interfacing with established competitors like Reliance, BSNL, Bharati, etc. for interconnecting its network.