So you are like the majority of Indians. You connect onto the net using your modem, connected to POTS (Plain Old Telephone System), not ISDN, leased line or cable. And with your spanking new computer system, you have got the latest 56 Kbps modem. Your eager reseller has convinced you to buy it, perhaps with promises of throughput fast enough to view web movies.

Alas, you connect all right, but the connection averaged only about 34Kbps. Higher speeds were impossible. What went wrong? Your telephone is connected to the latest digital exchange, the line quality is excellent and you have a reputed modem. So why is the system not downloading anywhere near its rated speed?

To understand that, we have to look into the physical limitations of the telephone system and the effect on data transfer.

First, some basics about modems. Modems take computer data and transmit it over telephone lines. Since phone lines transmit audio (analog) signals, the modem MOulates the computer data into sound. The other end of the connection will DEModulate the sound into computer data. Thus the name "modem." There are obviously a number of different ways modems can modulate and demodulate, so the modems at each end must use similar methods for successful communication to occur. The connection modulation and speed, as well as data compression and error correction methods are established and agreed upon between the two modems immediately after connection, a process known as handshaking and negotiation.

The organization entrusted with making decisions on these standards is called the ITU (International Telecommunications Union). The protocol (set of rules) for 56 Kbps connects is known as V-90, while the protocol for 33.6 Kbps is V-34. Various other protocols exist which was used previously, when connection speeds were slower, as well as protocols for error correction, data compression and even cellular connects. These are visible on the carton of your modem (under specifications) as various numbers prefixed by V or MNP.

As fast as modems have advanced in the past several years, we have reached a limit to the amount of data that can be passed through a standard phone line. Shannon's Law is used to determine how much data that can pass through a given communication medium. According to this law, the maximum amount of raw data that can be pushed through a standard analog phone line tops out at about 35kbps -- very close to what today's 33.6k modems can push through the phone lines.
If we are near or at our limits right now, how can they make modems that supposedly go faster? The answer: Change how you look at the phone lines. Today's modems assume a totally analog communications channel. This isn't necessary true when you call into an ISP with hundreds of phone lines. For companies with a large number of telephone lines, the telephone company will often combine them into one big, digital telephone line that connects directly from the ISP into a local switching office. Because the ISP's end is digital, their end of the connection can be viewed digitally, which subjects the connection to higher theoretical limits under Shannon's Law. The end result: In one direction (most likely from your ISP to you), the connection will be 56k. In the other direction (you communicating back to your ISP), the connection will still be 33.6k because that end of the connection will still be analog. In other words: things will come into your computer faster, but they won't leave your computer any faster than they do now.

Shannon's law
The formula that relates bandwidth in Hertz, to information carrying capacity in bits per second. Formally:
Q = B log2 (1 + S)
where Q is the information carrying capacity (ICC), B is the bandwidth, and S is the signal-to-noise ratio. This expression shows that the ICC is proportional to the bandwidth, but is not identical to it.

Suggestion
In India, to the best of my knowledge, 56 Kbps connects by VSNL are available only in Mumbai, Delhi and Bangalore. Therefore, it is not cost effective to purchase a good 56 Kbps modem, for use in other places where the lines can handle only 33.6 Kbps. You will still get performance comparable to a 33.6 unit. A far better choice would be to go in for a high quality 33.6 modem, one which has good line holding and data transfer capabilities. It is indeed easy to lose more money on frequent reconnects and poor error control than the difference in cost between a mediocre and good modem. It may be interesting to note that some top of the line 33.6 modems are priced double or triple that of some 56K modems! With the advent of cable modems and DSL technology, it is possible the transition in many places may take place directly to these technologies, bypassing the 56 Kbps modem. It is a good idea to ascertain all these facts before making a decision.