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TECH TALK: Indias Digital Infrastructure: Overview

May 21st, 2007 · No Comments

Recently, Business Today asked me to write a column about the Internet in India. This is what I wrote.

The Internet is back! There’s a buzz among entrepreneurs as venture capital companies are putting money into companies focused on the Indian market. Online advertising (display, search and classifieds) is growing. Users are starting to spend on transactions going beyond ticketing. All in all, the long-promised boom of the Indian Internet is underway. What needs to be done to ensure that the boom isnt just a transient bubble?

There are, in reality, two Internets segmented by the access device and the type of connectivity. The PC-based wireline Internet has about 30-40 million users, with a majority of the users using cybercafes. With only 7 million computers in Indian homes, this Internet is still a long way from becoming a utility in people’s lives. The mobile-centric wireless Internet can potentially reach a significant portion of the 165 million cellphone users in India. However, the reality is that other than voice, there are only two services which touch a large fraction of this user base SMS and ringback tones. The mobile-as-India’s-computer paradigm still has a long way to go.

Looking at it another way, for the real boom, the wireline Internet needs more devices (home computers) and the mobile Internet needs more services. What will it take to make both happen?

To solve the device problem, one needs to rethink computing in a world where broadband exists and thus make computers affordable and manageable. For this, the answers lie in borrowing two ideas from the mobile industry create a device that costs Rs 5,000, and combine it with a monthly service charge of Rs 500, and make the device simple to use without requiring its owner to become a technology expert!

The solution to these twin challenges lies in thinking ‘thin’ computers for Indian homes connected over DSL or cable to servers over high-speed networks. All the computational processing is done at the server-end, and the network computers become simple ‘on-off’ devices without compromising on the performance that current desktop computers offer.

To make the mobile Internet a reality in India, two changes need to happen, and they have to be driven by the mobile operators since they are the ‘gatekeepers.’ First, an open publishing platform is needed to allow anyone to create a mobile website that is accessible by everyone just like on the PC Internet.

Second, mobile operators need to change their billing philosophy for value-added services. The bulk of the revenue that users pay must be given to the content providers. Mobile operators should, instead, charge for packet data flow through their ‘pipes.’ At a broader level, just like NTT Docomo did with its i-mode service in Japan in 1999, Indian mobile operators need to encourage the creation of a value-generating ecosystem.

Taken together, these innovations can help build India’s digital infrastructure, create a framework for other emerging markets to emulate and provide a large domestic market for companies to finally think India First.

There are a number of ideas which I did not have the space to expand upon in the Business Today column. I will use this Tech Talk series to elaborate on the various points mentioned.

Tomorrow: PC Internet

Tags: Tech Talk

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