Broadband in India: Lost Opportunity?

30 August, 2010

Every new technology wave has created game-changing companies like Intel, Microsoft, Oracle, Google, Facebook, etc. In the Indian context, Bharti Airtel is a classic example of a company that caught the wave of telecommunications and is still riding it.  Of course, for every successful company, there have been dozens of companies that didn’t see the wave coming, or got on / off at the wrong time. Whether successful or not, there has always been a lot of action in the technology world when there’s a new big wave. So, how come there’s so little action in the Indian technology space when the mother of all waves – wireless broadband – is about to hit?

Of course, you may question if there should be any action in the Indian technology space at all, other than deploying broadband. Given that global companies such as Facebook, Google, etc. are fast becoming household names in India, are there any opportunities enabled by broadband for Indian companies? 

I actually believe we are experiencing the very early stages of the next wave – broadband in the rural and semi-urban India – which has the potential to create an enormous opportunity for Indian technology companies. We are talking about something much bigger than sending SMS to farmers about weather conditions, which seems to be the prevailing usage model.

Broadband is not only liberating for the individual, but also forms the backbone of modern communications and commerce, resulting in innovative business ideas and restructuring of existing business models. That’s obvious, isn’t it? Well in India, it is and it isn’t. If you go by the government statements and read the broadband policy, you’d think that India is basing its very future on broadband ubiquity in the country.

And then if you look at the implementation, you wouldn’t be surprised by the three-to-five percent broadband penetration in India.  Part of the reason is perceived lack of value and part of it is bad implementation – last mile issues, metered usage which is hard to make sense of as a consumer and poor levels of customer service. 

Of course, the biggest issue – the last mile – may get resolved in the near future as the government has successfully auctioned the required spectrum (although in India, it’s not done till it’s deployed). But let’s assume for a minute that the technology restrictions of broadband access are removed; now the question is the perceived lack of value. What will broadband enable people to do? Sure, there’s a section of the Indian urban society that will be on Facebook, upload videos to YouTube, videoconference, etc. They will be able to do it easier and faster now.

What about the rest of India? This is where I expected a lot of action in the Indian technology community to create new ideas, new business models that are unique to “rest of India”, which the global sites won’t ever be able to do. Instead I see a lot of me-too VC plans that want to do a version of Facebook, YouTube or similar in India (and often times, not even localized).

Recently I was listening to a presentation by a leading consulting company that’s focused solely on analysing rural India. While some of the statistics they mentioned are truly mind boggling (~50% of India’s population is rural and contributes only 17% of the GDP), what caught my attention was a question from the audience – “what sectors do you think will gain the most in the coming years as disposable income in rural India increases?”

I am no rural marketing expert, so my gut reaction was FMCG, consumer durables. Their answer was “technology”. The argument is that while FMCG represents a considerable opportunity, the real exponential growth will come in the technology sector as people understand, appreciate, and demand technology. Time will tell if this theory is right or not, but I have to imagine that broadband will be the underlying fabric with the potential to make this “technology” exciting and revolutionary in rural and semi-urban India.

I was on the panel of judges at a recent Intel India Embedded Challenge program which invited students and professionals to submit innovative design ideas in the embedded space. The first prize was awarded to a design that enabled remote control of tractors – the idea was to increase efficiencies in the agricultural sector. Entrepreneurs like these will figure out how to leverage broadband and create disruptive models to increase efficiencies, and enrich lives in “rest of India”. I suppose I am just being too impatient for that to happen!

 

Views, observations and comments expressed by the author in this article are completely his own personal views and does not represent the views of the company in any circumstances.

 

 


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Broadband in India: Lost Opportunity?

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