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TECH TALK: Indias Digital Infrastructure: PC Internet

May 22nd, 2007 · No Comments

Let us start by taking a look at the PC-based wireline Internet. We have 7 million computers in homes in India, growing at around 2 million a year. (Indias total installed base of computers is about 20 million, growing 6 million annually.) Compare that with the mobile industry: it is growing at 7 million a month, or over 80 million a year, over an installed base of 170 million.

Because of the low home computer base in India, people largely use cybercafes to access the internet, paying between Rs 10 and Rs 40 per hour. Indias Internet user base is estimated at be around 25-45 million (depending on which source one believes). Broadband access in India too has been slow to grow in part because most new investments have focused on the mobile infrastructure. But the bigger issue has been that the new home computer market is only a couple of million. That severely limits the target market for broadband providers. (Yes, there are about 5 million computers still not connected by broadband. If these people have not gotten broadband access to the Internet now, then I can only surmise that either access is not available or they have no reason to get one.)

Of course, broadband in India is not really broadband. Although the advertised bandwidth may be 256 or even 512 Kbps, actual speeds are often a fraction of that. Furthermore, since access plans often have very low data transfer limits, broadband in reality is at best an (almost) always-on narrowband connection.

With MTNL and BSNL controlling the most-effective form of access in the form of DSL over copper (telephone cable), private providers (ISPs and the telcos) find it hard to get ubiquitous coverage and provide cost-effective connectivity. Cable companies have got into the fray but reliability remains a big challenge.

The Internet has myriad services. New sites keep popping up daily. It is almost trivial for anyone to create an Internet presence. So, even as services mushroom, the growth of the Internet in India is hobbled by the lack of connected access devices.

Computers at Rs 15,000 or more are, relatively speaking, much more affordable than they were a few years ago. The starting prices of computers have come down and income levels for the middle-class have gone up. Yet, people have not adopted computers like they have done with mobiles. I think there are two reasons for this beyond the affordability dimension. First, they lack desirability; they are not must-have devices. And second, they are perceived to be complicated to operate.

One could argue that the new generation of mobiles are in fact multimedia computers. While thats partly true, the experience of the big keyboard and display of a computer cannot be replicated with todays mobiles. One can imagine teleputers mobile phones which have the ability to connect to external keyboards and to large external displays. But thats not available today and perhaps lie some years into the future.

Whats needed for the PC-based Internet to take off in India is a solution that combines the affordability and the manageability of mobiles. With such a solution, it will be possible to take computing to 50 million Indian homes in the next five years.

Tomorrow: Mobile Internet


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