Originally Published 2014-05-14 05:29:51 Published on May 14, 2014
Both the spread and speed of the internet in India will have a direct impact on India's economy. India's e-government schemes will find faster delivery of services. Sectors like e-commerce will be able to grow. And India's IT and ITES sectors will also remain in the race to be a sure avenue for employment and income generation.
The need for internet speed
"A friend recently blogged about the Indian elections and wrote in his post about a tweet from the Aam Admi Party’s Somnath Bharti, in frustration as he wasn’t able to upload a video of his party workers being beaten up in Amethi, that he would have done so if the broadband would have been better. It struck my friend as funny, at the time, but it struck me as very telling. Amethi could be considered one of India’s VIP constituencies, a stronghold of the Gandhi family. Even an offhand comment about the inadequacy of the quality of broadband exposes how far away India really is from not just proving the internet to its people, but providing quality access. It also made me wonder how governments of the day blame YouTube for their communal law and order problems, given that YouTube is painfully slow to load in New Delhi itself most of the time - but I digress.

If TV adverts were anything to go by, India is nodding along to "what an Idea sirjee" and a plethora of celebrities are using 3G to post silly videos of each other. Urban youth have no concerns outside Facebook and Twitter, and everyone seems to have only content to create, with the speed of broadband a given.

And then there is the mainstream media which reports on what "Twitter" is saying about any given subject, and either feeds off gossip and opinions on the social media platform or then tries to lead the discussion over there by asking its patrons to tweet using hashtags. Just to put it in context, India’s Twitter base is roughly 33 million, which is 2.75% of India’s entire population.

And, as far as the two national parties go, the BJP manifesto speaks of an innovative and technology driven society that is globally competitive. It mentions e-government at some length. The Congress manifesto too, talks of connecting every village in India with broadband in three years to open ’vast new opportunities’, but no specific employment opportunities in urban and sei-urban areas. Currently, Karnataka, which boasts of India’s IT hub Bangalore, is under a Congress government. On another note, the Aam Aadmi Party, India’s first urban underdog political party talks about using information technology to promote transparency and reduce corruption in government. There is no other specific reference to the potential of the internet in India.

In fact, outside official lines in party mandates (and the most in the BJP’s), this election season has slowly seen the campaigns devolve from talk of development to the usual caste and communal equations. Therefore, it might be pertinent for them to be reminded about what is at stake right for the country in the coming years.

The numbers speak for themselves, released by the Telecom Regulatory Authority of India. As of February 2014, the number of broadband subscribers in India was 14.80 million, about 1.71% up from the previous month. Growing even more rapidly are the number of users access the internet through their mobiles or dongles, which stood at 42.81 million in February 2014, a growth of 2.05% from January 2014. The top five wired broadband providers in India are BSNL (9.98 million), Bharti (1.39 million), MTNL (1.10 million), YOU Broadband (0.37 million) and Beam Telecom (0.37 million). As for the top wireless broadband service providers, there is Bharti (10.60 million), Reliance (6.98 million), Idea (6.50 million), BSNL (6.38 million) and Vodafone (6.14 million).

Studies analyze the potential of the internet not just in social terms, but economic. A McKinsey report published in December 2013 called "Online and Upcoming: The Internet’s Impact on India" reveals that the Internet contributes 1.6% of India’s GDP, roughly $30 billion. The report says this could grow to 2.8 to 3.3% by 2015 if India achieves its potential for growth with respect to the number of Internet users and Internet technology-related consumption and investment. However, according to a joint report by KPMG and ASSOCHAM, India is currently losing about 70% of its new business in the Business Process Outsourcing (BPO) industry to competitors like Philippines and Eastern Europe. This is in part because of rising costs in bigger metros, and the lack of English speaking employees. The solution lies not just in vocational training schemes but also in moving these offices to tier 2 and tier 3 cities. Not taking swift action could cost approximately $30 billion in foreign exchange earnings.

In country that ranks 123 in the world when it comes to average broadband connection speed and 125 in average peak connection speed, according to the ’State of the Internet’ report by Akamai, this is a serious challenge. For example, in India, a broadband leader like Airtel offers speeds from 1 Mbps up to a maximum of 100 Mbps (on fiber based broadband network in urban Delhi) while in Guna,(a small town in MP), the range of offered broadband speed is from 512 kbps to 2 Mbps. In rural areas, BSNL offers speeds of 512 kbps to 2 mbps. However, experts say that the difference between actual and promised speed varies a lot from place to place. The actual speed could range from 90% but go as low was 20% of what is advertised. This is dependent on the network and the customer premise equipment. For all this to improve, a sense of urgency needs to enter the Indian market. As Rajan Anandan, Managing Director of Google India, said in a recent interview, "nobody in the world except India defines 512 kbps as broadband." Late in 2013, the government of India cleared a proposal to provide three internet connections and one wi-fi hotspot in each of the 2.5 lakh gram panchayats spread across the country. The project should be completed by March 2016. The plan is to provide 100 Mbps broadband speeds to all the gram panchayats in the country.

In terms of mobile broadband, ’the next big thing’ according to numbers, there is still a while to go. Telecom providers are aggressively offering 3G services and the use of smartphone in India is on the rise. However, following complaints about the quality of service, the Telecom Regulatory Authority of India (TRAI) has started a consultation process for setting minimum download speeds of 1Mbps for 3G connections and 56Kbps for 2G connections.

Ultimately, both the spread and speed of the internet in India will have a direct impact on India’s economy. But that’s not all. Somnath Bharti and million others will be able to upload videos and tweet - be they of political relevance or not. India’s e-government schemes will find faster delivery of services. Sectors like e-commerce will be able to grow. And India’s IT and ITES sectors, which contribute up to 9% of the country’s GDP, will also remain in the race to be a sure avenue for employment and income generation.

That certainly deserves a mention in a campaign speech!

(The writer is a Fellow at Observer Research Foundation, Delhi)

Courtesy: Internet Rights, Digital Empowement Foundation

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