Posted by: Bruce Einhorn on October 08, 2007
Here’s some weird news from India: At a time when Internet usage is supposed to be on the rise, the number of Net connections in the country actually dropped in the second quarter, falling from 9.27 million to 9.22 million. As a somewhat incredulous Economic Times reporter comments, “India is possibly the only country in the world where internet connections are falling.”
How can this be? I asked my colleague Nandini Lakshman in Mumbai to explain what’s happening. Her take: More and more Indians are indeed online. They’re just not using landline connections. Instead, she says, Indians are getting onto the Net via mobile. According to the Economic Times, over a fifth of India’s 200 million-plus mobile subscribers go online via their handsets.
“Yes, mobile Internet is big,” Nandini says in an email. “Even college-going kids carry phones with GPRS costing upwards of $400. Mobile operators are constantly introducing VAS schemes as their entire focus is to increase the average revenue per user. India’s ARPU is the lowest in the world.”
Morever, the popularity of mobile Internet connections is also a reflection of the sorry state of India’s big telcos. “The largest service providers are two state-owned companies — BSNL and MTNL,” she adds. “But they are so overwhelmed by the load, that their servers crash often. Accessing the Net on the mobile becomes more convenient.”
It’s great that Indians are among the world’s leaders in terms of using their cell phones to access the Net. But India doesn’t have 3G yet and speeds for mobile access of course can’t compare to broadband over fixed lines. For the country’s Internet companies to take off, India’s telcos need to get their act together.
What’s happening in India is also worth noting given the interest among people in the IT industry in coming up with inexpensive ways to help people in the developing world go online. MIT Prof. Nicholas Negroponte’s One Laptop Per Child non-profit this month is coming out with its first machines, designed with kids in poor countries in mind. (See this story by my colleague, Steve Hamm, about OLPC’s attempts to jump-start its program.) Intel has a project of its own, the Classmate PC, that’s also meant to meet the demand for a low-cost way to provide Internet access in poor countries in Africa, Asia and Latin America. (I wrote about how the two projects compare here.)
OLPC, Intel and others are betting that the PC is the best way to do that. But PCs, even specially designed ones for emerging markets, are more expensive than cell phones. Negroponte’s project isn’t off to a roaring start: See, for instance, this BW story by my colleague Steve Hamm about OLPC’s efforts to jump-start its program.
Some people, such as Qualcomm chairman Irwin Jacobs, argue that focusing on the cell phone is a better way to boost Internet usage in the developing world. You would expect Jacobs to say that. He’s in the business of selling chips for cell phones, of cours. But the drop in landline connections in India - and the surge in mobile access to the Net - seems to support his case.
BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.