Future of Internet in India linked to mobiles

Oct 30, 2006 13:20

A recent survey put the number of Internet users in India at 37 million. Out of that, 25 million were defined as active users, i.e. those users who used the Internet at least once in the last 30 days.

But a large percentage of these users, over 60 percent by some estimates, accessed the Internet from a public Internet cafe. The total installed base of PCs was not more than 20 million--including home, office, educational institutes and government segments. Broadband (speeds of 256Kbps and above) is just beginning to make inroads in the home segment, with the largest landline operator BSNL pushing hard for dial-up upgrades to ADSL.

The growth of the Internet and broaband in India is stymied not only by the low PC base in homes but also due to a lack of compelling content and services. India is a culturally diverse and multilingual country. But content on the Internet is predominantly in English. Talking of services, task-based online services such as job hunting and matrimonial search have seen the most action so far. But utility services like banking, bill payments, ticketing and niche services such as online trading are also beginning to get traction.

So what will it take to make the Internet an integral part of the digital life of the Indian consumer? Will the PC be the primary device of access to the Internet for Indians? Going by trends, the mobile phone is emerging as a strong contender to becoming the main Internet access device in India. The number of mobile users in India has grown to more than 110 million. That is nearly six times the number of PCs in the country. And the growth rate of mobiles is far greater than that of PCs--India is the fastest-growing mobile market in the world and expected to touch 300 million users by 2010. Nearly all but the lowest segment of new-generation mobile phones are Internet-capable. Indian operators are seriously thinking of pre-enabling the Internet and introducing zero-rental GPRS by charging for data usage only.

It is in this context that interviews of two very influential people, expressing similar views on mobile Internet, become important.

The first was a Knowledge@Wharton interview with Indian Internet icon Rajesh Jain. Jain started India's first Internet portal--IndiaWorld--which was sold in November 1999 for US$115 million to Sify. Knowledge@Wharton compared him to Marc Andreeson, co-founder of Netscape.

"I believe another dimension will define the future of the Internet in India, and that's going to be built around the mobile phone. Given the way mobile phones have taken off in India during the past four to five years, I am convinced that more people in India will access the Internet through mobile phones than through computers linked to narrowband or broadband connections. We need to start thinking about the mobile Internet differently than we do about the PC Internet...
In other words, the shape of the Internet in India going forward could be rather different than it was in the past. The closest analogy I can think of is Japan in 1999-2000, when NTT DoCoMo's i-mode wireless Internet service took off. That happened because it was an open platform. The challenge is to open the mobile platform to content and other service providers. That's one thing that needs to change...

My view of the future is that there will be two screens in people's lives: A small screen that they carry around and a large one that is available to them at home, at the office, or through cybercafés. You need both. Connectivity should be available wherever you go through wireless networks. You could have all the applications, content, services stored on the Net so you could access all your stuff regardless of which device you happen to be using."

The second interview was with Yahoo! chief operating officer Daniel Rosensweig on Moneycontrol.

"It (the Internet) will not be restricted to the personal computer (PC). It will be on the mobile phone. Already there are over 2 billion mobile phone users across the world compared to 1 billion PCs. The next level will be to have Internet access on cell phones, iPods and television. We already have a feature called Yahoo! Go that gives users access to all their information wherever they are--be it on their cell phone, television or PC...

The real growth in the Internet space today is happening outside the US. A lot of that growth will be in India. China is already No. 2 with 10 percent of its population online. Over the next five years, the rising number of Internet users in India should take it to among the top three or four nations. As of now, we have just about scratched the surface here. But for that to happen quickly, there are issues that need to be addressed. These include improving the infrastructure, lowering broadband prices and increased mobile Internet access."

So with increasing emphasis on the mobile phone as a primary Internet access device for India, it would interesting to see what made-for-mobile content and services entrepreneurs and innovators will come up with.

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