Author: Rajesh Jain

A number of you wrote in last week saying I was being too pessimistic
about the Internet in India, and that one should not talk only about
the problems but also present solutions. I thought I had presented
these in the past columns:

• 10 Websites India Needs
• 10 Needs of the Indian Internet
• The three keys to Internet success — Content, Community and Commerce
• The Internet Doors Open in India: But are they the Right Doors?

Little has changed in the past few months: even the Internet
privatisation policy drags on. Bits and pieces are leaked out
or stated at public fora. Something whichwas going to be announced
by October-end is now expected be in place by mid-January.
This is another example of the ills of the Indian Internet: time,
which means everything on the Net, has little relevance for our
policy-makers. We do not need a policy, we need action; we do not
licencing, we need telephone lines.

But we are going to get a Policy and some kind of Licencing, whether
we like it or not. There will be money ranging from Rs 5-25 lakhs
which will need to be put up by ISPs as bank guarantees. The big
players aren’t even going to get into the market now: they will adopt
a wait-and-watch policy for some time before they decide. They are
all-too-familiar with the flips-and-flops of India’s telecom
policies. So, we will have a situation which will once again be of the
in-between kind: doesn’t take us back, but will not us take us forward
rapidly either.

Solutions

What are the solutions then to this type of situation? I believe that
small entrepreneurs hold the key to the growth of the Net in India,
and that technology will overcome the policymakers. At a recent
symposium on the Internet for professionals at which I was a speaker,
the greatest interest was on how the net could be used to cut down
international phone costs through products like Net2Phone! People tend
to find their own solutions to problems. If the cost for 500 hours
appears too much, people share accounts. If multiple email IDs are
needed, then there is always Hotmail.

A simple 6-point plan for the Internet in India:

• Allow private ISPs without any restrictions. Let VSNL compete with them.
• Cut leased line costs by 50-70 pc
• Premium Service for Businesses for Internet Access
• Set up Internet kiosks across the country (a recent statement by the Telecom Commission chairman Mr Gokak states precisely this)
• Treat the Internet as core infrastructure, and create a high-speed domestic network
• Make an email address mandatory for all businesses wanting bank/FI loans

The last item might seem a bit radical, but unless we force businesses
to start using email, we cannot expedite the process of ensuring that
email becomes the primary means of communications. Forget the consumer
market for now: let us work on getting Indian businesses — small or
big — to start using email. The rest will follow.

The Internet will have a significant impact on messaging and
communications, and entrepreneurs will create their own
opportunities. The aim must always be to create a business which is
independent of government policy: this business is not necessarily the
backbone and access, but in value added services. Witness the number
of companies offering home pages on the Net in every city. In khoj, we
get more than 100 requests a week for addition of Indian URLs.

The impact of the Internet is going to be bigger than we can
imagine. Those companies and individuals which get in the race early
and can envision how the future will be impacted by this medium are
going to be the biggest beneficiaries. While the Indian Internet has
been slow and has had its share of problems, it has been one of the
most important developments in India over the past 3 years.

At IndiaLine, we have traced many Indian success stories in
net.SUCCESSES.
All except one. Our own. Over the next two weeks, we will talk about
IndiaWorld and its three years of pioneering work on the Indian Internet.
The challenge in India is to rise above temporarily difficulties, create
solutions which work in the domestic context, think long-term and
build mindshare. As long as you are in the midst of it all, the
innovations will keep happening: your customers will be the biggest
source of ideas. IndiaWorld’s story will hopefully inspire many of you
to embrace and extend the Internet.

It seems so obvious: the Internet is the most important development of
recent times and we need to adopt it. As Jairam Ramesh kept reminding
us during a recent TV discussion on the Net, it holds the key to
“India’s economic and technological future”. Why then do individuals,
companies, and governments move so slowly to make in the cornerstone
of business strategy? Why is something which seems so obvious to some
of us not so evident to others?

Firstly, the Internet in India is not visible. Newspaper, magazines,
television — they can be seen anywhere. It does not require much
effort to “browse” these media. The Internet hurdle is very
significant. A computer, modem, phone-line, VSNL account are still not
good enough. You need to have a browser, the dialler properly
configured and a bit of patience to actually connect to the Net. And
then, wait 20-30 seconds for each page to materialise on the
screen. It is too elaborate and costly a procedure, like the procedure
to follow for a dip in the Ganga. Most human beings have too much else
to do than worry about setting aside an hour for the Browsing
Process. Result: Internet accounts, even after two years of
availability, number just about 50,000.

Secondly, the benefits of Internet access are not clearly evident. So,
yes, you can browse upto 150 million pages, communicate with 60
million other people, search for anything on the Net and locate tens
of thousands of pages. Who cares? There is too much unorganised
information to be useful. The more the sites, the fewer people will
actually visit. Channel surfing with a remote is easy, Web-surfing
over a 28.8 Kbps modem is still too slow. Sending email…how many
email addresses can you remember (or locate in your Rolodex)? Are the
ones whom you want to communicate with the kind who check their email
box regularly? In India, the answers are not the ones we want to hear.

Thirdly, the business potential of the Net has not been proven. The
occasional inquiry does not a business make. Since there aren’t enough
Indians on the web, one has to target sites at companies/individuals
abroad. Its also harder selling to people half way across the
world. We need the domestic numbers, no two ways about it. Whether it
is for an Intranet, a website or an Extranet, businesses need hard
numbers, and these are not available in the Indian context.

Fourthly, there are no great Indian success stories. An industry needs
role models. Netscape, Yahoo, Amazon make for great inspirations. They
are part of Net folklore. In India, there really aren’t any such great
successes yet. In addition, the venture capital, which makes
risk-taking easier for entrepreneurs, is missing from India. We need nine
companies to fail so that one can succeed spectacularly and inspire
others. Somewhat like the film industry. In the Net business, there is
hope and optimism, and only that.

Finally, the people who can make decisions are too far removed from
the Internet. They read about it, but the whole process of connecting
to it once is enough to convince them that the average person is not
going to get onto it in a hurry. In government, there are too many
lobbies clouding the real issues. The people can who make a difference
have no voice. Many of the journalists who write about it have limited
access and experience on the Net.

India needs change on the Internet. Desperately. The pace of decision
making about the Internet is too slow for the rate of change and
innovation on the Net. It becomes a race one has lost even before it
has begun. One can read about developments abroad and dream. Of a
world that could have been. For individuals, companies and yes, the
government. Leave it alone unfettered and watch a thousand flowers
bloom. Try and control it, and you will be writing an epitaph.

Last week, we examined 10 trends for
consumers in India, brought about by the Net in India. This week, we
take a look at Business and the impact the forces of cheaper and more
powerful computers combined with ubiquituous communications will have.

1. PC as the key device in the workplace

The computer is going to be the most important device in the office
(and on the road for the mobile executive) for communications,
information access and increasingly, transactions. In India, the
installed base is about 1.5 million, which leaves plenty of room for
it to grow. Today, most computers are still primarily used for office
productivity applications and printing out letters. In due course, the
browser-enabled computer will become the front-end to the information
base — within and outside the company.

2. Internet as the global distribution medium

Be it email or a website, the Net is going to be the primary
distribution and communications medium. Available in nearly every
country in the world, the Net offers unmatched advantages:
instantaneous communications, electronic messaging, interactivity and
in due course, multimedia. As bandwidth to the Net increases (in India
the net bandwidth has doubled: more people connect at 28 Kbps than at
14.4 Kbps today, and in the next year, ISDN and 56 Kbps modems will
double it again), a wider range of applications become possible.

3. Business is time and info-sensitive

The Net fills the gap between the delay in getting paper delivered to
us, and the broadcast nature of television. Its interactivity and
immediacy of access allows us to get the information we want without
any delay. As companies put up more information on the web than ever
before, the Internet website is becoming the primary means of getting
information. In the case of the Reserve Bank of India, material
is published on the Net at the same time as it the press releases go
out. Business in India has access to information worldwide at the same
time as their counterparts elsewhere. Just because we are in India
doesn’t mean we are at a disadvantage. This will remove information as
the scarce resource, and make knowledge the tool for competitive
advantage.

4. Trade barriers being dismantled

As countries move to zero-duty regimes, the marketplace becomes
global. Geography (distance) as a barrier to doing business
vanishes. Virtual Vineyards
sells wines across the world.
Amazon gets 27% of its revenues from
outside the US. For Indian companies, it will be necessary to create
quality products which match the best in the world, and explore
markets through the Internet. The courier company (we need efficient
supply chain management) will deliver anywhere in the world in 72
hours. Unless we do something about it, it will probably take longer
to get goods past our customs.

5. Mass Customisation

We are moving away from mass production. The Net allows us to create
products custom-built to a user’s specifications. This is because the
inputs are provided directly by the user. As intermediaries are
eliminated, it becomes possible to reach out directly to the customers
and take their orders, which are then routed directly to the shop
floor for production. Networking is the key for success in the New
Economy. As a glimpse of what’s going to come, try creating your own
computer at Dell’s website or
ordering groceries at Netgrocer
(you can’t pay for them, but you’ll get the idea of things to come).

6. Wired Consumers

A lot of the drive for businesses to computerise and provide more
information will be driven by an influential base of customers who are
increasingly wired. Customers here could be employees, suppliers or
end-users. Today, the PC-modem-phone combo is all that is needed for
Net access. In India, while 15 cities already have local Net access
now, you will see the top 50 cities have access to the Net in the next
12 months. Also, as the private telcos begin operations, Internet
access will be a commodity. The Net has one Law: More begets
More. With every new connection, the value of your connection
increases. Just like the fax machine.

7. Direct Access to Enterprise Systems

About 60% of NFDC’s ad bookings (for programmes on Doordarshan) now
take place through the Internet. Ad agencies can dial up to the Net,
enter their login and password, and place their request. They now
interact directly with NFDC’s database. They can do queries, check
status, and make the booking — without having to interface to a human
being. Business-to-business commerce is making its beginnings in India.

8. Email as the Killer App

The biggest opportunity in India is to provide email to every
corporate user. It will also lead to better and faster communications.
Witness the number of Indians who have got Hotmail accounts. Personal,
Private Email on the desktop is the killer application in India.

9. Electronic Payment Systems

A mechanism to pay electronically will transform not just the banking
and finance sectors, but also other businesses. Collecting money via a
credit bank or a bank account will transform the way business is
done. It will lead to a major spurt in the use of the credit card,
since now one can go to the Net, hunt for the best deal, and have it
delivered. The impact on business of this efficient market: diminishing
margins.

10. Business Velocity Increases

Underlying what we have talked about is an increase in the pace of
doing business. Companies want products and services faster, email
demands replies in minutes and not days. The Internet will be the
second step in India’s liberalisation programme. Business will need to
respond by acting rapidly, deploying the technologies within the
company and between the organisations they deal with. The Net will
need a rethink of business processes. The Networked Economy is here.

India is on the threshold of an Internet revolution. Users in India
are expected to rise 10-fold in the next 2 years. The Internet will
unleash significant forces which are bound to impact communications,
information exchange and commerce. In this article, we examine ten
trends which will impact Indian consumers. The next article will deal
with trends affecting Indian business.

1. Only eMail

I tried to get my doctor-sister to use the Net for looking up medical
sites a year ago. I failed. Three months ago, two of her friends went
abroad and sent her their email addresses. Today, she has her own
Hotmail ID, and writes email
regularly, and even looks up Medical sites in
Yahoo. The same was the case with my
aunt when her son went abroad. For many families, email has become the
way to stay in touch with family and friends elsewhere in the
world. Free email services like Hotmail have made it easy for anyone
to get their own email account. Email allows for quick and
near-zero-cost communications, anytime and from anywhere.

2. Internet Telephony

The impact of Net telephony will be real. While email is
one-dimensional and asynchronous, net telephony can bring about all
the interactivity of a telephone call, at an unbelievable price. The
impact for consumers — and telcos — in countries like India with
high telecom costs will be significant. As bandwidth and technology
improve, voice will be carried on data networks, and not
vice-versa. Internet Telephony will bridge distances globally at costs
which are almost local.

3. Prime Time on the Web

During the second match of the recent India-Pakistan one-day series, I
happened to visit a few of our clients in Mumbai. All of them had
connected to KHEL.COM to get the
latest cricket scores. There is no TV at the workplace, and radios are
too old-fashioned. The Computer-on-the-Net is the only
information delivery vehicle during business hours — for breaking
news, live stock quotes and cricket scores. Real-time information
apart, the Web is the biggest library of information and solutions. We
routinely source information from
Dejanews (a searchable database of
newsgroup content). The pace of information flow has become faster as
distance (and geography) have become irrelevant.

4. Missing Agents

Disintermediation is a big word. Its impact will be even bigger. As
wired consumers start interacting directly with organisations,
intermediaries need to look at new ways to generate business. In the
US, only non-techies pay full price for airline tickets now, as deals
abound on the web. You need to know where to look. The travel agent or
the stock broker will no longer your interface to travel and trading;
the company’s enterprise systems will be. Look at
Elbee: you can go in and directly
track your package without going through an operator.

5. Reverse Markets

We as consumers are now better informed than ever before. On
Dhan, one page compares the interest
rates of many banks. On
Samachar, all the newspaper
headlines are sprawled in front of you: pick the one you like and give
it the page view! Unlike the seller having the power of the
information, you as a consumer now have it. Looking for a house? Send
out an email to the
real estate
companies, get their quotes, look at their offerings on their
websites, check out the interest payments for the finance schemes —
all without leaving your house or taking to a human being. Armed with
the information, you are now in the best position to negotiate the
best deal for yourself.

6. My World

Stock quotes are now available on the Net daily by 7 pm from
half-a-dozen sources. Many of these
(like Kotak’s My India Page) even allow
you to create your own portfolio (wonder why newspapers spend half
their printing cost on something which is non-customised and at least
12 hours late?) Samachar allows customised newspapers. Shortly,
ICICI Bank will offer you the view
of your bank account from their desktop. We are moving towards mass
customisation.

7. Community

The Net has something for very interest of ours. This way, you can be
in touch with a group of people, whatever their physical
location. Community creation, the ability to share, are what the web
is uniquely able to provide. When we started our food site,
Bawarchi, it was one-way traffic of
recipes: us putting them out, people reading them. In the last two
months, we’ve been getting about 15 contributions a week from readers,
with all sorts of tips and ideas on cooking Indian food in different
parts of the world. If email is what you will go first to the Net for,
the sense of community will what will keep getting you back.

8. The Young leadeth the charge

The wiring of India will be driven by the youth of India. The younger
they are, the more Net-savvy they will be. With plenty of time and
easy access to computers from home or school/college, they will be the
ones to lead the Internetisation of India, and introduce their parents
to the wonders of the Net.

9. WebTV

I think that in the years to come, the functionality of the TV and PC
will merge together to provide a high-bandwidth interactive access
device. In India, this is very important because the PC population is
very limited, and in the last 5 years, cable has made a big impact in
penetration within the country.

10. eCommerce

Perhaps the biggest impact will be on purchasing. Once the primary
hurdle of electronic payment systems is crossed (we expect that
systems will be in place by mid-1998), retailing and online purchases
within India will take off. Books will probably be the first off the
block. Information and other “soft items” will also do well. For now,
even the ability to request items through the Net with a telephone
confirmation and courier delivery will be a big step forward.

The Internet has spawned hundreds of Indian websites. Are there still
opportunities for webmasters to create innovative sites and generate a
following — and money? Yes, and here are 10 ideas. India needs sites
tailored to a domestic audience: sites which are compelling and
require a person to login often. (If such sites do exist, then you are
welcome to write to
IndiaLine and let us know.)

1. An Indian CNN

Most Indian newspapers and magazines which take their produce and put
it on the web, with few updates other than the frequency of print
publications. Notable exceptions:
Indian
Express, which updates news regularly but whose presentation can
do with substantial improvement,
India Today, which gives you
“tomorrow’s paper tonight” with its News Today briefs, and the
IndiaWorld
Headlines. What is needed is an Indian CNN: where one can check
out the top stories at any point of time. On TV, Business India’s TVI
provides headlines on the hour.

2. A khoj for People

Looking for long-lost friends? There are international sites, like
four11 and
Whowhere. We need one for
Indians. Wouldn’t you like to know where the person who shared a bench
with you in the seventh standard is now? (If you wouldn’t, then go to
point 3!) Many colleges have started alumni lists, but a comprehensive
one for all Indians on the Net is needed.

3. The Great Indian Films Database

After Cricket, Films is the other
unifying factor in the country. How about a site where I can query to
my heart’s content? Stories of movies, filmographies of actors and
actresses, searchable list of songs…all in one site.

4. Games

There are many Games sites on the Net. We need a few Indianised
versions. I don’t see many Indians going to
Riddler and spending time. But, if
we can come up with games which we grew up with and which fit in the
Indian context, then perhaps the audience will come. Multi-player
games across the Indian Net…now that would be fun!

5. Free email

Who needs an Indian Hotmail? And
there’s also Yahoo Mail and
Excite Mail. The answer:
advertisers. Imagine if there was a way you could reach 50,000 Indian
Internet users. Free email with an Indian touch and ads definitely has
a future.

6. Auction

It is the ultimate fantasy. We as buyers go and say, “this is what we
want to buy.” Sellers bid for the sale. We need an Indian version of
Onsale. Go to the Net, post what
you have to sell, and search for what you want to buy. A marketplace
without any geographical barriers. Airlines could then offer their
unsold tickets at rock-bottom prices (some money is better than none),
hotels and theatres could do the same. So, customers find great deals
and sellers find buyers for their unsold inventory . Its a win-win
situation and definitely a compelling reason to get on to the Net.

7. The Indian Amazon

Amazon offers 2.5 million titles
from all over the world. Buying Indian books (albeit, a limited
number) from Amazon will saddle you with you a huge shipping
charge. Searching for Indian books is not easy. Buying them is harder
still. How about we get some Indian bookshops and publishers online?
With excerpts from books, comments from authors, and so on. We need
the local bookstores online so that books can be delivered quickly
(how about overnight?) and inexpensively.

8. Community – Free Home Pages

There are many places to get Free Home Pages:
Geocities and
Tripod, to name two. Again,
we need Indian neighbourhoods. Plenty of Indians and small
businesses have set up shop in the internal websites. Indian
environs will probably do more for business and traffic.

9. City Services

What’s on in your city? Movies, Restaurants, Exhibitions, Events? No,
you cannot find this today on the Net. We need a mix of the Daily
Engagements Column in the local newspaper and the Yellow Pages online
for every city. This is a precursor to item 10, the commerce
enabling. You want to dine out, go to the Net, figure out which
restaurant to go to, request a reservation, and then get the food via
the modem. Well, four out of five isn’t bad.

10. Online Commerce

Someone needs to come along and say, here, now you can pay
electronically. By credit card, or via our bank account. And look,
there are these 50 shops for you to chose from. We need this mall
builder, and the “eCash” collector. We need to be able to do more
online than just browse. We need to enable transactions.

The Internet Policy, as approved by the Cabinet on Monday, calls for a
5-year licence fee holiday and a 10-year licence period. Good
Beginning. A bank guarantee of a year’s licence fee is to be
given. Bad Idea. The licence amount is to be determined in a joint
meeting of the DoT with leading trade organisations. The bank
guarantee condition will effectively eliminate the small-time
entrepreneurial outfits from becoming ISPs, and make the ISP business
the domain of big business.

It would have been nice if the approved document were available on the
Net. Especially since, all newspapers had their own flavour of the
story. It would have been still better had Internet users in India
been allowed to comment on the guidelines being drafted. But then,
policy makers do not necessarily surf the web. Else, the Indian
Internet wouldn’t have been where it is now.

Everyone likes lists! So, here’s one for the Indian Internet. Its what
we — the people, the government and corporates — have to enable to
ensure that the Internet can herald the revolution which it is capable
of, and which India needs.

1. Backbone

We need a high-speed backbone in the country. The recent announcement
raised the speed of the (paper) backbone to 2.5 Gbps (currently, VSNL
has 512 Kbps circuits linking the major cities). The cost was raised
by Rs 500 crore to Rs 1,200 crore. Great PR. How about getting it
done? We’d be delighted with 45 Mbps connecting India’s top 50
cities. Else, of course, next year, we can raise the speed to 50 Gps
and the cost by another Rs 500 crore.

2. Toll-free access

After the proposed reduction in the rates of VSNL’s service from Rs 30
per hour to Rs 20 per hour, guess who will make more money from the
Internet than VSNL? MTNL/DoT. With one call every 3 minutes, and each
call costing Rs 1.40, the connect-time cost works out to Rs 28 per
hour. The telephone call cost is, in a way, a hidden cost and not very
obvious to many. And if you aggregate it, it is not a small windfall
for MTNL/DoT. 50,000 users spending an average of an hour a day (250
hours a year) can add Rs 35 crores to revenues. How about using this
money to making access easier by re-investing it in adding more phone
lines and switches?

3. ISDN

For sometime now, ISDN access has been coming. At 64/128 Kbps, it is
an excellent access method for corporate networks not wanting to spend
large amounts on leased lines. ISDN will also improve the quality of
connections that users get.

4. Reduced Leased Line Costs

VSNL should drop corporate 64 Kbps leased line port charges from the
present Rs 10 lakhs to between Rs 2 and 4 lakhs. DoT needs to halve
its separate charge of Rs 1.87 lakhs for the line. Make leased lines
available within Rs 5 lakhs per annum (with a monthly payment
facility), and reduce the lead time for setting up the leased lines to
2-4 weeks, and see business usage of the Net take off.

5. Rock-bottom ISP Licence Fees

The big question is what the bank guarantee amount for ISPs will be.
How about zero? Companies are going to anyway spend plenty of money on
equipment, telecom and marketing. Why bother with the bank guarantees?
If ISPs have to fold up, let them. Let the market decide. But, lets
have the small-time ISPs also: one for Connaught Place, one for
Nariman Point, one for Raheja Arcade, one for Udhampur. Let them take
the bandwidth from the big chaps, but surely, let’s not make them pay
the bank guarantees. They will not be able to. We need a grassroot
awareness and marketing campaign to get millions of Indians on the
Net.

6. ICOs

How about Internet Kiosks at post offices, banks, railway stations,
airports, petrol pumps and libraries? Just as the telecom revolution
was energised with the Public Call Offices, the Internet revolution
needs ICOs. Checking email, news headlines, stock quotes, cricket
scores and ordering books, flowers should be as simple as walking up
to one of these terminals. In India, the PC cannot be the primary
access point, because of the cost of ownership, the complexity and the
insignificant installed base in homes. ICOs and WebTVs can help create
the mass medium which marketers need.

7. A 24-hour India news service

India needs an electronic, Web-based 24-hour news channel. News is a
big attractor, and being able to get the latest news via the Net
during the day (there are very few TVs at the workplace) can work as a
good reason for corporates to go in for the Net. Airlines and the
Railways need to put up their schedules and arrival/departure
information, near-real-time stock quotes need to be made available for
free, along with more locally relevant community events.

8. Interactive Websites

Companies need to go beyond putting up information; they need to make
the web a service and transaction medium. ICICI Bank has taken the
first step by announcing plans to offer Internet Banking. We should be
able to buy books, order CDs, books tickets, pay the telephone and
electricity bills and trade stocks. Companies need to be able to build
in enough interactivity and offer relevant, personalised information
and services to make it a worth our while to visit their websites.

9. Electronic Payment Systems

Money needs to move electronically. Via credit cards and bank
accounts. Once money starts moving, merchants will start setting up
shop. And then the Net’s virtues of geography-independence and
interactivity will create the ultimate marketplace.

10. Venture Capital

We need companies willing to take risks and back people and ideas.
Starting a Net business does not need a lot of capital. But there
needs to be potential to make it big, and be acquired. Given India’s
strengths in English and software, some innovative funding can help
make the Internet boom. Also, employee stock options need to be
allowed in a more direct manner than the ways possible at present.

As a sign of the changing times, the Times of India had a front page
ad asking companies to advertise on its family of websites to reach
out to an international audience. With more than a thousand companies
on the Net already (Source: khoj listings for
business.companies),
it would seem that the Indian companies might seem well on the road to
using the Internet as a marketing medium. Unfortunately, few Indian
companies take the Net seriously as a medium. Fewer still have a
strategy that goes beyond putting up information on the web.

What are the elements of a successful Internet strategy? How does one
attract and retain traffic?

An Internet marketing strategy needs to revolve around the three C’s:
content, community and commerce. Content helps attract traffic,
community helps retain the traffic and commerce lets you make money of
them. Most Indian sites tend to barely do a good job with the
content!

Content

Content is the starting point for a website. Not only must it be
comprehensive when the site is launched (without any “Under
Construction” messages), it must add value to the visitor’s life via
personalisation, be interactive and be updated on an ongoing
basis. You must think in term’s of daily additions/updates on the
website.

Rajshri has, since its launch
last December, ensured daily updates to its site even though the
company has not launched any new product (film) in that period. But
every time a visitor comes in, there are new pages and section which
await him. Bharat Petroleum has an India Petro Daily, which summaries all the news
from the petro and energy sectors in India.

Kotak Securities offers a “My
India Page” which allows a registered user to personalise his stock
portfolio, and receive updates via email if the stock price goes
beyond a specified band. K Raheja
Constructions offers an interactive EMI calculator for those seeking
real estate loans.

In each of these cases, there is a “hook” which aims to retain a
first-time visitor, providing an incentive to come again.

Community

Write John Hagel III and Arthur Armstrong in ”
Net Gain“:

Community in fact provides a unique context in which commerce can take place as customer equip themselves with better information.
The result is a “reverse market” in which power accrues to the customer. To become profitable, the organizer of the virtual community must understand and address the newly empowered customer’s needs.

Building a community involves providing a mechanism for visitors to the
site to communicate not only with the site managers but also with each
other. Using broadcast email, bulletin boards and real-time chat, an
online community can bridge distances and help create a longer-term
loyalty which goes beyond just the content.

International sites which have been very successful with building
online communities have been
Amazon.com
(for book lovers), Counsel Connect (an on-line service for lawyers),
ESPNet
(sports), and Motley Fool (an online forum for personal finance
investment on America Online).

Commerce

Electronic Commerce is the final goal of websites: using the site to
do business with people, irrespective of geography. Buying and selling
via the Internet is still a rare phenomenon in India, but with
organisations like ICICI Bank
introducing electronic banking and
Satyam, which has a tie-up up with
Open Market, we can expect
electronic payment systems to become available in the near future.

So far, banks and corporates through their initial public offers have
used this capability to cut down distribution costs for application
forms. ICICI Bank marketed its public issue online recently to
NRIs.

HMV’s newly relaunched site,
Saregama, offers a wide-range of
music albums for sale, with an online payment system for US residents.
Outtahere combines
content with the ability to maker travel reservations online.
Tangerine takes orders for
computer goods through its website.

Beyond consumer commerce lies the much bigger area of
business-to-business commerce. More on this next week.

On Tuesday night, the Union Cabinet cleared the Internet policy, paving the way for private ISPs in the country. Detailed guidelines are expected to be announced by the DoT and DoE shortly. Indications are that there will be no licence fee for the first two years, and there will be no limit on the number of ISPs. A National Information Highway is also going to built. The DoT’s stated goal is to garner a million subscribers in the next two years. Finally, it appears, the government is waking up to the Internet.

What does Internet privatisation really mean? What are the real bottlenecks for growth? Do we really need a million Indians to be on the Net by 2000?

Private ISPs, while most welcome, are not going to solve the most fundamental of India’s Internet problems: not enough dial-up lines to accommodate the present base of 35-40,000 Internet accounts. Dial-up lines need to be made available in large numbers to allow people to get through without getting busy signals. In India, even though VSNL tries to keep a ratio of 1 line for 10 people, growth is faster than lines becoming available. Also, even though the per-hour-charge of Rs 30 is reasonable, the necessity to pay up-front for 500 hours of usage lends itself to account sharing, which means there can be multiple people using the same account at the same time, thus skewing the entire phone line calculations.

The short-term solutions to this lie in (a) software, to disable two logins from the same user at the same time, and (b) charging businesses more for a premium level of service. Indian businesses would be willing to pay higher amounts for a premium service which included guaranteed connectivity and higher bandwidth (available through ISDN). An executive-class service which has higher per-hour-tariffs with a greater number of phone lines would be most welcome by corporates, since the communications savings through the Internet are very significant.

Private ISPs will not be able to compete easily in the consumer access market and will necessarily have to look at business-oriented services. They will not be able to compete on price, they will have to provide value-added services. In India, the business user is the one for whom the Net will be the most critical in the coming years. Consumers will still take time to get on the Internet, especially since the installed base of computers in quite limited. Rather than trying to target a million Indian households, we should be targetting 100,000 Indian businesses and enabling reliable and speedy Internet access for them: they are the key for India to achieve a 7 pc growth in the coming years.

One of the most dramatic decisions which VSNL/DoT can take is to sharply drop leased line tariffs for Internet access. Make it affordable for businesses to take up leased lines to the Net and then see the exponential growth in communications — and productivity — within the country. Today, a 64 Kbps leased line costs Rs 10 lakhs per annum while a 2 Mbps line (with 30 64 Kbps channels) costs Rs 70 lakhs. (To this, you need to add DoT’s tariffs). I would like to see 64 Kbps leased lines being made available for Rs 25,000 per month. VSNL can use a 1:4 ratio, and thus use a 2 Mbps leased circuit to accommodate upto 120 64 Kbps customers, thus generating a revenue of Rs 3.6 crores per line per year, which should make it profitable for VSNL and affordable for the end users. Since companies don’t tend to use up the entire bandwidth all the time, it will be possible to use the 1:4 ratio and still offer a very good service. Of course, ISDN can offer similar levels of access at far lower rates, but then there’s still a dial-up component to it.

High-quality content is very important for spurring Internet growth within India. We also need more Indian companies to set up web servers locally, thus ensuring that high-priced international bandwidth is not consumed accessing content which is essentially local. This will once again ensure effective utilisation of the thick pipes for which India has to pay large amounts to international telcos.

More important, perhaps, is the humble email. Imagine if you could communicate by email to your suppliers and customers via email. Extranets would allow them to also plug in to your network. This will make Indian business much more efficient and hasten the flow of information. But for this, a revolution has to take place across vertical industries. Once business-to-business communications becomes digital, electronic commerce will follow. This is where India has an opportunity: since little infrastructure is in place, we can embrace the Internet and come out ahead with a superior communications platform in the next 12-18 months.

For this, mere policies and privatisation will not make a big difference. It requires a change in mindset. The importance of Digital Information needs to be realised; information — along with timely access to it — can become a key competitive advantage. The challenge of leveraging the Internet and its technologies lies with Indian businesses. Making Internet access available to India, Inc. must be the top priority of VSNL, DoT and the DoE: this is one situation where the Common Man can wait a little longer.

Recently, we at IndiaWorld launched a site on Indian history,
Itihaas. Reading about the India of
3,000 years ago, I was amazed at the richness and the glory that we had,
and saddened at the subsequent years of plundering and deprivation. Once
in a millennium there comes a force so overpowering that it can make or
break a civilisation.

Today, on the threshold of the next century, I cannot help
but think that India has one last opportunity to earn its rightful place
in the world.

The last force which united India was the British. Today,
the Internet is another such force, having the ability to raise India to
the next level, enabling India to compete in the world. The Internet is
the bridge — from our past to a glorious future. And yet, there is
little understanding of the challenges we face. I propose to outline
these, and suggest that we need to rise above our competitive instincts to
build the India of tomorrow — a networked India.

1. Infrastructure

India desperately needs a high-speed national network connecting its top
25 cities. The time-frame to have this ready is not the year 2000, but
now. While LAN speeds in India have kept pace with the rest of the world,
WAN speeds are at least 6 years behind that of the industrialised
countries. This is what needs to be immediately corrected. Building the
national Internet backbone is as important as building new highways and
power plants.

Also, to improve the end-user connectivity to the Net, technologies like
ISDN and cable modems must be used. In addition, ISPs (including VSNL)
should be allowed to setup telephone exchanges rapidly to meet growing
user demand. The local dial-up difficulties are what has given an
otherwise-excellent service a bad name. It is also the most visible part
of the service, and phone lines at the local level need to be made
available rapidly.

2. Networking

The next step is for companies to set up connectivity between their
offices. In India, where leased lines are still quite expensive, dial-up
ISDN can become quite a good alternative. Also, the sooner the Internet
backbone becomes available, the easier it will be for corporates to
interconnect offices within India. This is very important — the internal
departments of a company need to be well networked before it begins to
derive significant benefits from the use of Internet technologies.
Intranets and Extranets only become useful if the data network itself is
in place first.

3. Education

The level of awareness about the Internet in India is woefully
inadequate. Difficulties in connecting to the Net and the lack of
“Internet Call Offices” where the Net can be seen, have contributed to
this lack of understanding. The Internet today is a vital
business-to-business communication and commerce medium, and yet it is seen
as just another technology by most companies. National programs for
senior executives to understand the Net are needed. We have to start with
top management, since they are the ones who may have the vision to ensure
adoption across the organisation. Cybercafes need to become more common,
so that the Internet can be experienced easily and in one’s own
neighbourhood.

4. Content

Content is always the biggest attractor and the primary reason why a
person will use the Net. While Indian newspapers and magazines have made
rapid strides in creating a presence on the Net (newspapers like Deccan
Herald put up their Net editions as early as 2 am), most of the domestic
content available is still not interesting enough. India needs localised
and community-specific content.

The government can be a tremendous contributor in this respect. One
organisation which others can learn from is the Reserve Bank of India: its
site is a veritable treasure trove of information. At a smaller level,
companies too need to digitise their content and make it available on
local servers. Corporate databases and trade information from industry
associations also need to be made available and publicised on the
Internet.

5. Community

The Indian Internet also needs a feeling of community: an overpowering
reason to connect, share and communicate. Usenet newsgroups were one such
channel in the early days of the Net, and have been complemented by
various chat sites in the recent past. Topic-wise, demographics-wise,
and interest-wise communities need to be built to create a feeling of
togetherness in the vastness of cyberspace. People need online gatherings,
and these virtual communities can help give direction and meaning to the
Net presence for individuals. Publishers and managers of popular websites
should take the lead in coming together to create these virtual
communities for the Indian Internet.

6. Commerce

Finally, an electronic payments system needs to be evolved so that
producers and consumers can go the full distance: get the information,
and complete the transaction. Credit card companies should set-up
real-time verification systems over the Internet, and banks need to set
up debit systems. Contrary to popular perception, the Net is as
safe a medium as you can get: information is sent encrypted over the
network, and cannot be tampered or snooped upon. This will encourage the
small merchants to get online, since the Net will now offer a big plus
over traditional media: the ability to convert interest into commerce.

Big industrial houses need to follow the example of GE’s Trading Network
to move purchases online: the domino effect will again ensure more
companies use the Net for business-to-business commerce.

With bated breadth, India awaits the new Internet policy. Regular reports
in the business papers have ensured little of it remains a secret. The
only unknown is when the announcement will be made. Yet, the Internet
policy and the entry of prospective ISPs will do little for the Indian
Internet industry.

The challenges are more fundamental, and require national and collective
action to ensure that India and the Internet have more in common than
just the first two letters.

Vande Mataram!

Every company setting up a Web site has a dream about the Internet: put
your home page on the Internet, and lo and behold, you are flooded
with orders from all over the world! The myth about the Net is that
small businesses have at last got a level playing field against their
bigger cousins. Life isn’t so simple, else no one would be running a
small business. But used intelligently, the Internet can
definitely help small businesses grow and reach out to markets and
companies they would otherwise not easily be able to. We’ll see how.

First, an anecdote. Recently, I was giving a seminar in Delhi. I had
just completed 2 hours of speaking about how the Internet was great for
business: standard textbook stuff, peppered with examples of some of
the success stories from India, and the world (Amazon, GE, Dell). When it was
time for questions, one gentleman got up and asked, “I am an auto parts
manufacturer. How can the Internet help me target buyers abroad?” The
question seemed simple enough; the answer wasn’t. And that was the
inspiration for this series.

The one thing we have to realise is that big companies have many
choices and a lot more resources. Distribution and reach are less of a
problem than they are for the smaller companies. The Internet,
definitely, can help smaller businesses a lot more than it can the
bigger players, simply because smaller companies have fewer
alternatives. Trade shows, personal visits, and international advertising
are expensive options. The Internet can become a viable complement to
present efforts. But, most companies we’ve talked to seem to look at
only part of the effort: putting up a home page and waiting for
inquiries, which are few and far between.

Here then is a 3-step strategy for your Web presence.

1. The Web site: a window to your world

Give as much importance to creating your Web site as you would to
opening a new office or a new division in your company. Content and
updates are the most important elements of the site. The visitor
should find something of value, besides your company profile, products,
services and financials. This “something” — which also works as an
attractor the second time around — could be an aggregation of
industry news, relevant links, policy information, etc. It does not
matter whether you are small or big; neither does it take a lot of
time to create this, but it helps broaden the profile of visitors to
your site and also ensures that there is a possibility of a repeat-visit.

A newsletter can be an inducement to get people to leave behind their
e-mail addresses, and allow you to stay in touch with them. Also, make
sure you have a contact form rather than just an e-mail address for
people to write back to you. This way, you can capture useful details
about the visitor’s background and interests.

2. Direct publicity

With little incremental cost, you can become your biggest
advertiser. Instead of going for (expensive) online advertising, you
can do your own publicity to the audience which probably has the most
use for it: your clients, suppliers, employees, investors. Make sure
that every communication sent out has the Web address (and if possible,
your personalised e-mail address): right from business cards and
letterheads to brochures and your print advertising. A letter or fax
to international clients is also a useful way to generate traffic, and
send a subtle message that you are also Internet-savvy. Also, by
ensuring that the Web site becomes your “electronic catalogue”, you can
reduce production and distribution costs.

3. Visiting other sites: do unto others…

Surprisingly, few companies think of this: just as you expect others
to visit your site and leave an inquiry behind, what stops you from
visiting their Web sites and doing the same? With an invitation to
stop by your Web site, of course. Spend time browsing the Web and identifying
companies who are on the Web and who might be interested in doing
business with you. Don’t wait for them to come to you: you go to
them. The Web is like on global round-the-year customisable
exhibition centre: make it work for you.

Moreover

The obvious ideas are of course there: registering in search engines
is one of them (try khoj for India-specific
sites). Also, look for industry-specific directories:
if people were to look for your type of company on the Web, where
would they look? Many industry-specific trade directories work as
meeting points for buyers and sellers (some were mentioned in
last week’s article.

Also, once you receive an e-mail, make sure you reply promptly to it. A
tip: keep a standard reply ready, from where you can cut-and-paste,
with some customisation. This is fast, doesn’t require you to think
each time you need to reply, and therefore, ensures a coherent message
goes across.

A recent issue of the Economist had a story on an Asian directory
set-up by Asian Sources,
which is an example of how electronic commerce can be done in emerging
markets. Many small- and medium-sized businesses are able to get
inquiries via their presence on the Web site. We need a dynamic Indian
organisation to do something similar for our up-and-coming
companies. After all, if India’s exports have to triple in the next
3-5 years, the Internet’s going to have to play a very critical role
in this.

We hope this set of three articles have been useful to you. We would
also like to hear from you
if you have a small business and have benefited from the
Internet. Your story can definitely inspire others in India, and we
will be delighted to share it through this column.