Slow Surfing in India

India, generally regarded as the outsourcing bull’s-eye of the planet, is far behind China in broadband connections, according to a new report by the New York-based eMarketer Internet research agency, which sees China adding broadband users at a pace that India will take years to match, perhaps if it ever does.

Although India’s Telecom Regulatory Authority set a goal of three million broadband users by 2005 and nine million by 2007 according to the report, only 1.7 million subscribers had signed up by August of this year – hardly more than half the target set for a year earlier. India, with 1.1 billion people, has fewer broadband connections than Hong Kong, with 7 million. The report does indicate that the pace of Indian broadband wiring is picking up by about 70% over the first seven months of 2006, however.

As the Internet grows increasingly complex, broadband is urgently needed for the transmission of massive amounts of data. Because connection is immediate and large volumes of data can be transmitted, broadband fundamentally changes the way people use the Internet for both work and play.

Most people reading this site probably know that large files such as video applications and music, clog dial-up connections because they take so long to download. For researchers, students and a wide array of commercial interests that depend on fast transmission of data, India can be extremely frustrating outside of well-wired technical centers like Bangalore. Lack of broadband services means Internet advertisers are unable to beam pictures and especially streaming video ads to consumers.

Accordingly, as many third-world countries have essentially bypassed land lines and gone straight to cellular telephone systems, wireless Internet transmission is starting to pick up some of the slack left by India’s decrepit wired infrastructure. Bangalore, the epicenter of India’s high-tech revolution, is a dramatic exception to the rest of India. The area is expected to be virtually blanketed with wireless broadband coverage within two years, making it the only completely wireless city in India.

Despite the fact that India’s IT sector is growing at a sustained rate of around 30 percent, most IT transmission is on dedicated lines, not consumer broadband. For the public, the disappointing results are due to a collection of factors, according to the eMarketer report. Homes have limited access to telephone lines and ageing infrastructure means that by and large copper wiring is still in place, which is not always able to carry broadband signals.

And, as in other Asian countries including Thailand, India’s broadband connections are defined as having download speeds of at lest 256 kilobytes per second. By contrast, some specialized circuits can handle 10 gigabits per second, which would be able to support 25,000 videoconferences simultaneously, or 1 million Internet telephone calls.

That low level of data transmission has meant that India consumers don’t see any advantage in faster but more expensive broadband, and have simply stuck with dial-up. There are 35.5 million Internet users, a total which is growing fast and is expected to double by 2010, against the 1.31 million broadband lines.

But China, for instance, has more than 45 million broadband lines and is wiring up the country at a feverish pace. Broadband subscribers have been growing at a 79 percent compounded annual pace over the last three years and are expected to hit nearly 140 million subscribers by 2010. India is projected to have only 17 million broadband subscribers by that time.

While the US is still the world’s largest broadband market, with 46 million subscribers, it is barely ahead of China and probably soon to be surpassed. South Korea has 62% of its households wired, the world leader in that category. After Korea, Hong Kong is tied for second with Canada, each of which has more than half of their households wired. Metropolitan India, not counting rural areas, has only 3 percent

However, India has taken to VOIP – or Internet long-distance calling – with a vengeance. iLocus, an India-based marketing firm, reported that more than half of the long-distance calls placed from Indian telephones in 2005 were over the Internet. That figure is expected to grow to 70 percent in the next year.

The demographics of India’s Internet users are also changing rapidly. While 72 percent of users were males just two years ago, that figure has fallen to 68 percent and the proportion of women going online is expected to rise more. It was also estimated that nearly two-thirds of Indians online are under the age of 30, an attractive target audience for advertisers.