India’s User Surge Will Expand Local Content

The growth in India’s domestic Web audience from the current half million to an estimated two million users by the year 2000 should lead Indian online publishers to develop Web sites featuring a variety of content and e-commerce services.

Currently most Indian Web content–as much as 95 per cent–is hosted in
the U.S., but better infrastructure, more affordable hosting rates,
reliable service, and better quality perceptions should move some of this
hosting market back to India, said D. Suresh, executive director of Chennai-based network solutions company Computer Access.

A few years ago, about 80 percent of online newspapers were from the U.S. As Internet diffusion has increased more rapidly in other countries, this percentage has now dropped to 57 per cent. Sixteen English language newspapers in India and 44 others in ten Indian languages now have some form of Internet presence, said Times Interactive’s vice president Sunil Rajshekhar.

“Currently, it costs about Rs. 30 (77 cents) per hour to read a newspaper
online, whereas the newspaper itself costs only Rs. 2 (5 cents),” commented Rajshekhar, “So an online edition of an Indian newspaper must go beyond shovelware.”

In addition to publishers, sectors expected to quickly gain from the growth of users in India include financial and investment firms, real estate agencies, traders, and recruitment companies, Rajshekhar said.

“These services need to be introduced to the Indian market at affordable
rates,” Rajshekhar suggests. Currently, the rates are quite exorbitant by Indian standards.

Some online publishers in India face challenges in the form of unauthorized
re-publishing of their material on other Web sites. Traffic audits–such
as those performed by ABC Interactive and Nielsen in the U.S.–are
currently not carried out in India.

Startups and Webzines in India currently find it difficult to attract venture capital funding. Most funding seems to target large established players like Satyam Infoway and Rediff-on-the-Net.

Satyam Infoway plans to roll out its Internet access service–Satyam
Online–in 12 cities in India by the end of the year. The company has
also launched Web sites like and to target the automotive e-commerce segment.

The Internet is also the gateway to a whole host of other services that
Indians can tap into, such as software outsourcing and medical
transcription, said Ravi Marwaha, managing director of Tata IBM.

The government ISP VSNL and Satyam Infoway, among others, are gearing up to bring hundreds of thousands of users online in the coming months.

VSNL currently has 45 Internet access nodes across the country, and plans
to add 70 new nodes next year, according to L. Satyanarayana, general
manager (south India) of value added services for VSNL.

The five year plan for the period 1997-2002 will result in 18.5 million
telephone lines installed by the Department of Telecommunications and 5.2
million lines by private operators.

With expected improvement in infrastructure and bandwidth, there also lie
tremendous Webcasting opportunities for organizations in the radio, TV,
music and video sectors, especially given the wealth of music and video
resources in the country.

By the year 2000, 10 million new lines will have been installed. India has 45
cities with a population of greater than one million. In the cities of
Mumbai and New Delhi, telecom provider MTNL has 3.5 million telephone lines.

Unless the policy momentum is kept up, however, India may lose out on high-end Internet market opportunities to other countries like Singapore and
Malaysia, warned Vijay Menon, a scholar at the Nanyang Technological University in Singapore.

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