TECH TALK: Mass Market Internet: Low-Cost Internet Access

To put our Internet access discussion in context, let us look at some India numbers:

  • 1 billion Population
  • 150 million (mm) consuming Middle Class
  • 65 mm TVs with 30 mm Cable TV homes
  • 25 mm phones (0.6 mm telephone booths / PCOs)
  • 4 mm PCs
  • 3 mm Net users (about 1.3 mm Net accounts)
  • 2.5 mm Cellphones
  • 1 mm Pagers

So, what are the options for people to access the Net? PC, TV or cellphone?

The PC base in India is still quite small, and the cost of ownership at Rs 35-40,000 is still quite high. PC penetration is growing at 40-50% per annum, but will not achieve mass market penetration in the near-term due to the cost and complexity of usage.

Can the TV be the answer? I don’t think so. TVs serve as entertainment devices for the entire family while Internet browsing or e-mail is a personal exercise. In addition, the Internet TVs launched recently in India are still of the order of Rs 10,000, while TVs with set-top-boxes still cost in excess of Rs 7,000.

What about cellphones? The cheaper cellphones are available at about Rs 4,000 today, which is good. The problems are the small display, text entry on the 12-button keyboard, and the airtime costs (currently at Rs 2-4 per min, or Rs 1-2 per SMS message).

What India needs a low-cost, small foot-print access device for the mass market in India, a device which costs about Rs 2,500 retail (USD 55), and can be rented out for Rs 150 per month. At these price points, we can look at a target market of 25 million (similar to the phone lines / cable penetrations) in India alone, and a base of 4 billion people in the world like us in Asia, Eastern Europe, Africa and Latin America. What does it take to do this?

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.