Indian Portals To Take Off By 2000

The Internet portal market in India will take off
in Year 2000, according to Internet analysts in the region.

“The online consumer mass market and the opportunities for portals in India
will take off within two years,” said Abhishek “Abhi” Chaki, the director
of research for bandwidth and access strategies at New York-based research
group Jupiter Communications.

“We view India as a critical market in the long term for our research and
advisory consulting services in connectivity and content,” Chaki said, on a
recent visit to India.

Thirty to 40 Internet service providers are likely to commence operation in
India by the end
of the year and boost the domestic user base, according to Ravi Sangal,
director of market research group IDC India.

The domestic Internet base amounts to about a million users now, according
to a recent issue of Business World magazine. India’s new telecom policy,
focusing on convergent voice and data communications, is currently in the draft
stage, and is expected to open the gates to even more ISPs.

But as in many other Asian countries, most Indian sites do not draw
sufficient proportions of traffic from within the country. A recent issue
of Asiaweek magazine noted that Asian Internet users still tend to visit
North American Web sites much more than local Web sites.

There are no Indian sites which enjoy the global status or international
traffic flows on the scale of a Yahoo! or AOL, said Sangal.

“For some time to come, traffic on Indian portals–even on local sites– will
remain small in comparison to traffic originating outside India,” he said.

It is unlikely that regional language portals will be launched in India by
the end of the year, Sangal added–a position countered strongly by Arun
Natarajan, an Internet consultant and journalist based in Chennai.

“The local language portal does make a lot of sense–after all, you don’t
have to take on Yahoo, AOL-Netscape and MSN in this space,” Natarajan
said. India has over a dozen official languages and more than 400 dialects.

But many Indian language publishers are still grappling with issues like
developing downloadable fonts to give away to users. Among local languages
online, Tamil seems to be the most likely to be offered on a portal.

“A large percentage of India’s software engineers–whether working in
India or abroad–are of Tamil origin. This can bring in lot of support
for e-Tamil efforts,” Natarajan said.

A lot of notable contributions have been made by Indians based in countries
like Singapore on Tamil “e-fonts.” Two major national ISP players–Satyam
Infoway (which has already commenced operations in a dozen cities) and
Dishnet–are based in Chennai, capital of the state Tamil Nadu.

London-based WorldTel is
currently involved in a
project for large-scale use of Tamil content via the creation of about a
thousand Internet community access centers in Tamil Nadu.

The state also has proactive politicians actively pushing for the
importance of Tamil in Internet software and content development. It is
organizing a two-day conference next month called TamilNet ’99, promoting
standardization of the language for use in computers and its development on
the Internet.

But Indian portals hoping to offer free e-mail and homepages face
challenges in making them superior to those available on U.S.-based sites
like Yahoo and GeoCities, said Natarajan.

“It also remains to be seen whether the Indian portal wannabes understand
the importance of tie-ups, co-branding, e-commerce relationships and even
outright buy-outs, and not try to do everything themselves,” he added.

Many Indian ISP’s are contemplating portal strategies. But portal strategies
have had mixed success for ISPs in countries like the U.S.–though AOL and
Earthlink have been very successful with their portal plays, the telcos
have not been as successful, according to Jupiter’s Chaki.

“The key is to partner with players whose core competency is developing or
managing online content – there are a lot of online media players in India,
and ISP’s should work with them to develop relevant content and portals for
their services,” Chaki said.

Indian publishers like The Times of
India Group
The Hindustan
have launched first-generation
portals drawing heavily on their own content.

The market for Indian language portals will mature only if local language
sites grow in strength first, he said.

Though there is likely to be a good future for regional portals, such
portals would fare better in English than in local languages, predicted
Rajesh Jain, managing director of Mumbai-based content aggregator

Portals in India may fair better if they focus on niche or vertical areas;
the current crop of newspaper-driven portals merely rehash content from
their print versions, Jain observed. Portal content needs to be relevant
for local users too, and not just for non-resident Indians.

“Online revenues for Indian content sites and portals in 1999 will be
largely from advertising as compared to e-commerce, probably 90:10 in
favor of ads,” he said.

“But year 2000 will see the emergence of e-commerce, which will then
account for 30 per cent of online revenues,” Jain predicted.

E-commerce revenues in India this year will amount to about $14 million,
and then grow to $51 million in year 2000 and $162 million in year 2001,
claimed IDC (India)’s Sangal.

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