In 2013, India was ranked 125th in terms of fixed broadband subscribers; in 2014, it stood at the 131st spot. And, in terms of mobile broadband, it slipped from 113 to 155. Countries with better fixed broadband penetration than India included Yemen, Botswana, and Kyrgyzstan. In mobile broadband, Bangladesh, Belize, Uganda, Myanmar and Nepal scored better than us.
This is hardly the ecosystem you would expect when e-commerce is supposed to be the next big thing and investors have poured billions of dollars into the sector.
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But if you scratch the surface, the situation doesn't look so dismal. In fact, it looks quite upbeat. It is true that fixed broadband subscription stagnated at 1.2 per cent between 2013 and 2014 but that is because fixed-line telephony is on the decline in the country.
Most countries with high fixed broadband subscription have a strong cable network. India too has a cable TV network in place, which can be leveraged for broadband, but the throughput is not of a very high quality. That's why Indians have opted for mobile broadband. The un-telephoned have moved directly to the mobile platform. Thus, India's mobile broadband penetration has improved from 3.2 per cent in 2013 to 5.5 per cent in 2014, though its rank has slipped.
There's more. The percentage of households with internet improved from 13 per cent in 2013 to 15.3 per cent in 2014, and the percentage of individuals using the net improved from 15.1 per cent to 18 per cent.
The second set of numbers means an increase in internet penetration of almost 3 percentage points. In other words, almost 36 million people joined the internet bandwagon in one year. That's impressive by any standard. The ITU/Unesco report says that there will be 300 million new internet users in 2015; if India grows at the same pace as in 2014, it will account for as many as 12 per cent of them.
Actually, India could grow faster. That's because the spectrum question has been more or less settled in the last one-and-a-half years. The third-generation, or 3G, network, which enables broadband services, now has an almost national footprint: 70-75 per cent in terms of area and 80-85 per cent in terms of population. Bharti Airtel has launched 4G services. Vodafone and Reliance Jio are expected to follow - soon. Spectrum sharing and trading will become a reality in the near future.
Clearly, the future for mobile broadband in India looks good.
The spread of mobile internet depends on the cost of smartphones and the cost of broadband. Smartphone prices have crashed to around Rs 2,500. So that end of the problem has been taken care of.
Data tariffs too are low in the country but are not amongst the lowest in the world. EY Global Telecommunications Leader Prashant Singhal reckons Indian data tariffs would be in the bottom 25 per cent. Ever since data usage has picked up, most telecom companies have reported an improvement in their earnings before interest, tax, depreciation and amortization (Ebitda) margins. This leads one to believe that there is headroom for data tariffs to come down when competition intensifies.
In the voice business, increased usage led to a fall in tariffs. India may have abysmal ARPU (average revenue per user) but its tariff is the lowest and usage (in terms of minutes per day) is amongst the highest. There is no reason why something similar won't happen in data as well.
There are already signs of that happening. Bharti Airtel, for instance, has started to offer 4G services at 3G prices. Reliance Jio, which is supposed to enter the market towards the end of the year, is expected to go for competitive tariffs. Remember, the late Dhirubhai Ambani had told his son, Mukesh Ambani, when he wanted to launch telecom services first, that the business will take off only if a long-distance call costs less than a postcard. What was true then holds true now.
So, the building blocks for an internet boom are all there. The only missing piece, as highlighted by the ITU/Unesco report, is the availability of content in local languages. "In order to connect everyone, it is also vital to increase the online representation of many of the world's languages, especially for regions and countries with high linguistic diversity," it says.
But there is no need to worry about it: once the demand for such content hits critical mass, the ecosystem is bound to take notice and react appropriately.