State of the Internet in India (Part 2)

There are three obvious and two not-so-obvious things which need to be done to get the Internet business growing again. The obvious ones:

  • Reasonable, flat-priced (unlimited use) broadband needs to grow. I think the pricing sweet spot is somewhere around Rs 250 for unlimited use for 512 Kbps-1 Mbps connectivity. Actually, the last-mile conenctivity quality is not that much of an issue — in most cases, the pricing is. Metering Internet usage isn’t a way to explode this ecosystem.
  • Computing and Internet need to get more associated with education and entertainment. This is where families who haven’t yet done so will start getting them at homes. Services don’t necessarily need to be provided for free — ISPs can bill for “value added services” as part of the bill, and revenues can be shared with the content providers. This ensures that content providers can get subscription revenue and not be dependent only on advertising, and ISPs can get additional upside than just the flat-rate data charges.
  • Investments need to start flowing again in this space — the $500K-$2 million kind, which lets companies get started, and have enough runway for 18-24 months to show the business either works (in which case they will be profitable), or it doesn’t (in which case they fold up). A hundred companies need to flower so that we get a few to succeed, and become big.

Much of this is quite obvious to people in the space. I will add two more not-so-obvious point to this mix tomorrow.