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| .in India |
| Madanmohan Rao |
Overview The digital economy of India during 2003 - 2004 was marked by an explosion in the cellular phone market, a boom in outsourcing, steady Internet growth, media convergence, growth in rural ICT initiatives, benchmarking with China, and (unfortunately) regulatory stumbling blocks. The president of India’s software lobby, Kiran Karnik, was featured on the cover of Forbes magazine as Man of the Year for 2003; and Business Week ran a high-profile cover story on the rise of India, especially its ICT and outsourcing industries. Paradoxically, India still has a long way to go in making ICT widely available to its population. A number of high-profile events have focused on the importance of bringing the fruits of the ICT revolution to a wider user base, especially in rural areas, where most of India’s population lives. As a benchmark of economic growth and ICT diffusion, it is becoming increasingly common to compare and contrast the domestic scenario in India with the corresponding environment in China. Unfortunately, regulatory potholes continue to hinder speedy progress on many fronts: private operator interconnectivity, VoIP, and wireless services eligibility. In
the ICT industry, the recent cuts in excise duty on computer hardware and cellular
phones are expected to drive domestic demand for hardware in 2004 - 2005, according
to projections released by the software lobby, the National Association of Software
and Services Companies (NASSCOM), and the hardware lobby, the Manufacturers Association
of Information Technology (MAIT). MAIT reported that PC sales in India during
2002 - 2003 grew 37 percent to reach 2.3 million units, compared to 1.7 million
units sold in the previous year. PCs bought by businesses accounted for 81 percent
of total sales and recorded an annual growth of 43 percent, while the number of
PCs purchased by homes grew by 16 percent. Locally assembled PCs sold under brands
such as Wipro, HCL, Vintron and Zenith garnered a market share of 26 percent (compared
to 19 percent the previous year). MAIT projected that PC sales would have grown
by 18 - 20 percent in 2003 - 2004 to about 2.7 million units. The cellular phone market has been growing steadily since the late 1990s, but in 2003 these new telephones really took off in urban areas. NASSCOM forecasted the cellular phone user base to reach 33 million in 2003 - 2004 and 49 million in 2005. At the same time, Internet growth has been steady, particularly among youths and business professionals. The total number of Internet users is estimated at around 30 million. The big concern is the looming shortage of international bandwidth, which NASSCOM estimates will exceed 20 Gbps by mid-2005. Prices of international bandwidth are still not on par with those of neighbouring countries. This could throw a spanner in the works for Internet usage and the outsourcing business. India ranks 37th among the 82 countries covered in the 2003 networked readiness index prepared by the World Economic Forum in partnership with INSEAD and the Information for Development Programme of the World Bank. Finland leads in the index, followed by the USA and Singapore (Rediff.com, 2003). Software exports exceeded US$7 billion and accounted for 16 percent of the total exports of India. The total IT industry is estimated to be worth US$15 billion and employs over 500,000 technical and managerial personnel. Wireless explosion Research firm Gartner projected cellular phone connections in India to touch 56 million by the end of 2004, representing a steep growth of almost 96 percent over the previous year. Driven by the introduction of full-mobility CDMA cellular services and stiff competition among GSM operators, 2004 broke all records for growth in the Indian mobile market (Rediff.com, 2004a). Volatility in the cellular market is expected to continue until at least 2006 as the main operators carve out their future market positions and some other players attempt to establish their niche positions. Samsung and LG enjoy an early mover advantage, working with local operators such as Reliance. Nokia and Motorola have started to make their presence felt in the CDMA market. . . . . . the complete text of this chapter is available for purchase and immediate download as a PDF file, please click here for more information. |
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