Brief

Digital Summit 2006

IAMAI’s summit highlighted the need for increased broadband penetration and examined issues such as the state of online advertising, the growing popularity of e-Retail and the emergence of GenNext as the biggest users of the Net in the country.

The Internet and Mobile Association of India (IAMAI)-sponsored Digital Summit 2006 ended with some interesting observations on the potential of the Internet and e-commerce in India. The two-day summit saw the participation of eminent personalities from the IT industry along with the presence of Union Minister for Communication and Information Technology, Dayanadhi Maran.

With a view to ensure better connectivity between television and phone, Maran felt that MTNL and BSNL should play an active role. He emphasised linking the cable networks of television viewers in Mumbai and Chennai with phone lines.

The minister stressed on the need to bring down the cost of personal computers, “PCs should be made affordable and local. I have been nursing the idea of floating an Indian language browser or translator in the English language browsers.” He informed that plans were afoot to set up server farms of international standards which will enable Indians to surf the net and browse through the content of their choice. A formal announcement in this regard is expected by May 2006.

Maran pointed out the need to make broadband customer-friendly and affordable. The broadband initiative should not be restricted to the urban areas but should also be taken to villages. “We will set up a thousand kiosks and unite villages in a honeycomb format, after which no villager will have to visit a government office to get an update of land records or procure a death or birth certificate. It will also give information on local businesses and employment opportunities. These kiosks will contain local information,” remarked Maran.

Those present on the occasion applauded the government’s efforts to ensure deeper penetration of the Internet in the country, but felt that it had a more active role to play.

Said Preeti Desai, President, IAMAI, “There is a lot of action in the Internet market in India. Proactive government support and recurring online activities have driven Indians to reach out to the Internet regularly for online communication, content and e-commerce.”

Neville Taraporewalla, Chairman, IAMAI, and Director and Country General Manager, Yahoo India, spoke on the need to create a conducive environment that will facilitate online businesses and build awareness on the medium’s potential.

Go mobile

On the potential of Internet access via mobile phones, the panelists were of the view that India will see a change in the number of net users over the mobile phone in the next 12 to 18 months. Improved infrastructure and better operator services will play a key role in achieving this goal.

Mohit Bhatnagar, Vice-president, New Products Development and Strategic Alliances, Airtel stated: “Telecommunications contribute 2.5 percent to the GDP. This year though, the revenue from mobile phones will surpass that from the landline network.” He felt that initially, people accessed the Internet for simple information, but with the increased awareness they now access it for personal needs such as ring tones and wall papers.

The growth of the Internet and mobile phone network is complementary as the latter enhances Internet use. Arun Gupta, COO, Mauj Telecom noted that mobile-based services like SMS and tele-voting have increased manifold since 2000-2001. He said, “Of the 50 million people using handsets, 10 percent are capable of browsing the net. Of this, 10 to 15 percent actually browse a site.” He added that in the next five years, 50 percent of the new handsets would be GPRS-enabled.

New business venture

Other than the growing interest in online gaming, closely followed by ring tones and Bollywood news, broadbands will in future play a key role in the expansion of online businesses.

Madhivanan B, GM, Retail Assets Products Group, ICICI Bank, wanted the use of broadband for reaching rural and distant areas. He said that the payment mechanism should be made transparent.

Lav Gupta, DDG, Broadband, BSNL informed that the broadband is a value chain between content owners, content managers, service providers, the customer and the government. Broadband is needed to expand opportunities and generate revenues.

Amitabh Pandey, Group GM, IT Services, IRCTC opined that e-commerce is a real and profitable venture in India.

G R Gopinath, MD, Air Deccan talked about how to effectively use the Web to enable online ticketing. As one of the pioneers of the low-cost airline industry in India, he said, “I wanted the mason, the carpenter and the primary school teacher to fly. We did not print tickets, but invited people to book them online. This cut the fees to be paid to travel agents; it also cut other such charges. I have made optimum use of Indian talent and the Indian context in making my venture successful.”

e-retail

The summit had sessions on online shopping, and the panel agreed that the concept will catch up on a large scale in the coming years. According to an estimate, Internet users spent Rs 570 crore through online shopping in 2004-05. This figure is expected to increase to Rs 1,180 crore in 2005-06.

K Vaitheeswaran, COO, fabmall.com remarked: “Direct consumer interactivity, lower sales cost and higher margins will drive top brands to start retail sales on their Web sites. titanworld.com and tanishq.in are recent examples.”

With searching being one of the popular Internet activities, it is prudent for entrepreneurs, SMBs and enterprises to understand the searching and shopping patterns of online users. They can thus gauge what drives people to online shops, if not what converts them to buyers.

GenNext: biggest Web user

India has yet to fully tap the opportunities available via online advertising and marketing. According to Desai, the revenue earned from online advertisements in India is less than one percent.

The penetration of digital products is the highest among youth. 61.2 percent Indians are below 30 years and 50 percent are below 25 years. 22 percent of the products advertised cater to the youth, and 59 percent of the advertisements are youth-oriented. Said Raj Gupta, President, Insight, “We need to have a media for youth, and develop a youth culture as it is this segment that spends the maximum time surfing the net—although reaching the youth is 26 percent more expensive.”