NET.COLUMNS: The Future of India’s Internet

MUMBAI (November 6): The one surprising aspect of the Internet in India has been the relatively few IT companies which have really gotten actively involved with it. The Internet industry so far resembles a cottage industry. Few software companies have a worthwhile web site to show off. None of the major IT companies seem to have a significant Internet strategy: for most, it is a wait-and-watch attitude. The only companies which seem to have gotten into the act are the two trainers: Aptech and NIIT. Both have set up universities on the Web.

In fact, one seems to hear less of the Internet now than we did a few months ago. That is either a sign that the industry is maturing or that it is withering. Intranets, of which a lot has been written about in the US, seem to be a strange term in a country in which reliable connectivity between two offices a few kilometers apart is a challenge. Exporters on the net are few and far between. Where is the Internet in India headed?

Internationally, the Internet and the Web are being accepted as commonplace. The Web browser, with an installed base of about 40 million (according to Netscape sources) seems nearly as ubiquitous as Windows. And yet, in India, we have about 12,000 Internet accounts in a year (via VSNL). The installed base of Web browsers would probably be between 10-25,000. A year ago, it seemed that everyone in India was waiting for the Internet. In this column, which is now more than 20 months old, I have written bullishly about the prospects of the Net. And yet, the facts and the numbers indicate a disappointing the reality.


In retrospect, there are three significant reasons for the slow growth of the Internet besides the relatively obvious ones (poor telecom infrastructure, VSNL monopoly, high entry barrier in terms of cost, limited end-user education and awareness): first, the near-indifference of the Indian IT industry to the Internet; second, the lack of high-quality digital content on India; and the third, absence of local online services. Even today, if these factors can be altered, an Indian Internet can be created with significant benefits for the entire industry.

Correct me if I am wrong, but till today, neither MAIT nor NASSCOM has a web site looking at selling India internationally. We find it okay to take out expensive supplements in Fortune and Forbes about the Indian software industry, but a web site which would focus attention on the Indian IT industry does not seem to be on anyone’s agenda. Industry associations are expected to represent the industry, and barring an occasional workshop or Cybercity, little of note has been done by the industry. The companies on the Web include some of the world’s largest corporations and a lot of international software companies, two obvious targets for the Indian companies. Education sites are good but won’t help generate business. Just recently came the news that growth in software exports is slowing. The Web may not be the silver bullet, but we could have at least tried.

Lack of digital content is of course a drawback but that is obvious considering the lack of a domestic audience.

Of late, many publications have created a web presence. But there does not seem to be any sense of urgency or innovativeness. Why haven’t more Indian organisations gotten on the Web? The answer probably lies in the limited domestic audience. But ask the companies who have experimented with the Web in a big way: Kotak, Amul and ICICI Bank. Each has used an interactive, content-driven site to create an interesting offering. My feeling is that the content will only come up once we have a hundred thousand Internet users in India. And given the slow pace of growth, that might be quite some time away. Unless, we think of local online services.

BBSes are, in some ways, local online services. I am not quite sure if they are legal or not under the DoT policies. But they do serve a good purpose: helping to create a community which is just a phone call away. 70 percent of our purchases are made with a few kilometers of where we live. This is the business that many companies on the Web are seeking to exploit by building city and neighbourhood-centric communities on the web. In India, classified ads in the newspaper account for only 4-5 percent of a newspaper’s revenue (according to a recent Business India article). Abroad, the same figure is supposed to be more than 30 percent. Being able to search via a computer for a specific talent or product or service is much more convenient. But we don’t seem to be needing such help!

India is a different market than most countries. The largest newspaper sells a million copies in a land of a billion. Our installed base of computers is about a million. Both the newspaper and the computer speak English. So, if we are to grow our installed base of the Internet in India, we are barking up the wrong tree. English and computers are probably not the answer. It has to be that other device.

TVs are not interactive. But trials happening in many parts of the world are attempting to prove otherwise. In India, the Net will have to speak many languages: almost as many as our people speak. (CDAC had some technology in this area. Maybe we can use that.) The key point is that an initiative and trials needs to be started to make our TVs interactive. We need cable modems, wireless modems, direct-to-home broadcast systems, phone lines — we need to wire up our country.

No one minds watching TV. Perhaps we can use the same technology to get our people to begin surfing. Because unless we have tens of million people on the Web, no one will notice us. India offers a fertile ground for testing some of these new technologies. What works here will probably work in China and some other Asian and African countries.

It is also our best chance of catching up. Information Technology and Globalisation are the two most significant factors affecting world economies. We need to get up and start growing. The computer and TV companies need to talk to each other. Doordarshan, DoT, DoE and the private sector need to get trials underway for bringing huge communities online.

The last 15 months of the Internet have been a reasonable washout for India. Maybe we can still do something to make the next 15 worthwhile. It will mean many organisations with different strengths working in a co-ordinated manner. We need to give the wiring of India as much importance as we give to our politicians and scams, and our film stars and our cricketers. We keep talking of making India a global brand. Promotion of exports needs a strong domestic infrastructure. We need to build on the promise of IT: we can bypass the PC revolution to the Web revolution. We need to make our brands global, yes. Why have we forgotten that the Internet is a medium, and one which has perhaps far more power for emerging markets like India than any other medium.

There are no role models. Perhaps the closest one is France’s Minitel. We need to wire up our country, make our TVs interactive, enable our Web to talk multiple languages, get every Indian company to be on the global Web. In debating whether we need one or multiple Internet Service providers, we seem to have missed the big picture. Who will use these ISPs service? Are there customers hankering for connectivity? We need to redefine the rules of the game. The Internet interconnects people. That is what we need to do. Technology provides us with opportunities to leap frog over others and build something new because the old does not exist. But week after week, we seem mired in the same old stuff. (Sometimes, I think even these articles begin to read the same…!) We need to reinvent ourselves. The irony of it all is that since this article is in English and in a specialised publication, a few thousand will read it, and as happens so often, do little about it.


Who will create the Indian language versions of Web browsers? I cannot see a Netscape or Microsoft doing that until we have millions on the Web. But, we just have a million PCs in India. We need Indian companies to come forward and create browsers for the Indian context. If there is a product opportunity, this is as good as any. We need companies to start creating digital content, and setting up servers so that people can dial and get access to information. Not just in the major metros, but in every town in India. The telephone is probably the only assumption we should make about telecom availability in India. We need credit card companies to take orders via the phone, which is a prerequisite for any Net-based system. If CyberCash can create CyberCoins, why can’t an Indian bank issue CyberRupees? Localised content in multiple languages, and services combined with an electronic payment system are the key to growth of an Indian Internet.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.