India still out of the Net

It is ironic that despite the Internet penetration in India growing faster than most countries, 90 per cent of its population is still not connected.

A McKinsey report states that there will be 330 million Indians on the Internet in 2015, making it the second largest connected population in the world. However, even with that number, India’s internet penetration will be a mere 28 per cent.

What’s more surprising is that for India to reach 40 per cent Internet penetration, a number that will match China’s penetration at that time, it will need to notch up more than 500 million Net users!

This is no easy task. The three biggest challenges in achieving this feat are limited access, low relevance and high cost. Adding to these challenges is India’s continued low ranking across surveys measuring impact of the Internet on job creation and contribution to GDP.

Today, the Internet is primarily being used as a medium for social networking and entertainment in India, while its immense potential in enabling widespread access to education, healthcare, employability and access to government services is still largely untapped.

We cannot be a connected nation if the large base of Internet users is not contributing towards India’s growth and development. India will truly earn the title of being a ‘connected nation’ the day it realises the benefit of the Internet to drive inclusive national growth. This can only happen if India can unleash the full potential of the Internet and drive community and national growth with urgency in the nation.

The McKinsey report states that the impact of the Internet in India is constrained by current gaps and obstacles in the Net ecosystem. While India scores well on the availability of human and financial capital, it rates poorly on most other parameters such as Internet infrastructure, Internet engagement, e-commerce platforms, the ease of Internet entrepreneurship, and the impact of e-governance.

TECHNOLOGICAL CHANGE

As we think through what is needed to become a ‘connected nation’, there are two key things that we have to keep in mind which will impact a majority of the impending strategies.

A majority of the 170 million additional users to reach the magic number of 500 million in 2015 will be from semi-urban and rural India, which will only happen if these users see the real relevance of the Internet in their daily lives.

By 2015 , more than half of India’s Internet access is likely to be using a small-screen mobile computing device, which will make India’s Internet market very different, with the need for a unique approach to content and design. It’s possible that a large part of these small-screen users will use low-cost feature phones with basic browsing capabilities and will find it difficult to browse or consume highly textual content.

These factors put a very urgent need on the Government and industry to find effective ways of delivering all necessary services over small screens with basic browsing capabilities. From an industry perspective, we have to think differently about the market and what it takes to win. Status quo will guarantee failure.

ECONOMIC FUNCTIONS

In my opinion, the following things are a must do for us to be called a truly ‘Connected India’.

Significantly scale efforts to increase awareness about the relevance of the Internet in contextual and meaningful ways to different audiences. As we go down the pyramid, the single most important drivers for faster adoption of the Internet will be how its usage can boost productivity and impact livelihoods.

For instance, showing a farmer how the Internet can give him relevant details such as weather, mandi pricing and eliminate the middleman to sell his crop directly will trigger faster adoption. The Government and industry must redesign skill training focused on relevant areas such as education, financial transactions, agriculture, healthcare, and government services to demonstrate speedy action.

Software and hardware innovation is imperative to enable solutions that meet the needs of the next wave of users who will largely be local language users, especially as we move away from Urban India.

Currently, none of the Indian languages feature in the top 10 languages on the Internet. Content and application in local languages, along with interface-level innovations to enable more intuitive ways of interacting with technology, will need to be driven to simplify ease of use.

The day a farmer can speak to his PC in his local language to access weather information will be when we see a real need for technology building up in rural India. The industry will also need to think through ecosystem innovation in areas such as alternate power sources as lack of electricity is, and will continue to be, a key road block to Internet adoption and usage.

The Government and the industry should keep striving to bring down the total cost of access to broadband and computing devices. Several governments abroad have driven special tax incentives or subsidies to accelerate adoption in rural, SME and education segments. These initiatives need to focus not only on the device cost but the cost of broadband access, which is a large component of the total cost of ownership.

Also, given the need to drive inclusive growth, just depending on the low-end devices for connectivity is not going to help India. These devices will have very limited use in the delivery of education and other key services needed for inclusive growth, given their very basic browsing and computing capabilities. The Government will need a more strategic approach that strikes a balance between cost and usage. As per the McKinsey report, the capture of the Internet’s value can be enhanced if India also enables increased access to affordable fixed broadband and PCs or through enhancing smartphone access.

LAST-MILE ACCESS

Last but not the least, we need to ensure there is last-mile access. As the Government lays out the National Optical Fibre Network providing true broadband to 2,50,000 panchayats across India, the industry has to work speedily on driving last mile. Otherwise, this will be India’s biggest missed opportunity.

I couldn’t agree more with the Finance Minister’s statement in the recent Budget about inclusive growth being India’s mantra for success. The need of the hour is for a robust plan to enable large-scale Internet adoption and usage in education, healthcare, and government services that will drive personal growth for Indian citizens, leading to community growth and ultimately national economic growth.

This is the only way India will increase the contribution of the Internet to its GDP. India will not be a connected nation if nothing changes. We have to collectively drive disruptive change through a well-constructed plan and get commitment from the Government, academia, industry and civil society.

(The author is Managing Director, Intel South Asia.)

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