Government should take notice of the slow growth in broadband connections that is the issue more concerning than the steep decline in internet connections. The authorities should roll out 3G services fast and the measures suggested by TRAI to improve broadband penetration should be considered by DoT.

The reason of the drop in internet connections in the last quarter appears to be the BSNL and MTNL deactivating inactive dial-up connections — an outdated and expensive technology for accessing the internet. If the plight continues, it would certainly be pulling down subscriber number.

However, there is growth in the number of people accessing the internet. The reason is that most of the offices are now broad-band enabled. The people who were earlier using dial-up connections are now surfing the internet from their work places.

The rapid growth in wireless internet access, through mobile phones or smart cards (now over 38 million people access web on their mobile phones) has also contributed in the decline of dial-up internet connections.

The need for quick launch of 3G services is furthermore heightened due to changed market dynamics, which has made cellular phones the preferred mode of accessing internet. The relatively high costs of PCs and the erratic electricity supply in large parts of the country is signaling that wireline-based dial-up or even broad band may not be the dominant mode of accessing internet. Therefore the focus needs to be enabling the fast-growing wireless segment to deliver web connectivity to the masses.

Government should be more concerned about the lack of progress in this arena rather than the decline in dial-up connections. Over a year ago, TRAI came forward with recommendations on 3G service and broadband wireless access, but nothing positive has happened uptil now, perhaps because of the strong resistance from incumbent telecom players.

However, the situation has dramatically changed over the past few months. It’s becoming clear that in view of the huge rush for telecom licenses, spectrum for even 2G services would have to be auctioned. As suggested by the regulator, the situation strengthens the case for auctioning of 3G spectrum furthermore.