Low internet literacy even in urban India: Report

Last Updated: Sunday, July 24, 2011 - 19:14

Mumbai: Union Minister of State for
Information Technology Sachin Pilot has promised that a
"twenty-first century" infrastructure would be set up for high
speed broadband access; while a report that he released
expresses concerns about "low internet literacy" even in the
urban areas.

Pilot released the report `Innovation In Telecom` by
PriceWaterhouseCoopers (PwC) here on Friday. He did not give
any time-frame for ushering in "twenty-first century"
infrastructure, nor did he comment on the report.

PwC report says that "even in the urban regions, Internet
literacy is quite low, and so is the usage. It will take a
generation for data usage to pick up.... Non-voice services
including value added services and SMS form just five to 15
per cent of total operator revenues, which goes to over 50 per
cent for operators in major countries. The number for mobile
data would be still lower."

Rural teledensity has still not reached the targets and
the Universal Service Obligation (USO) Fund created for the
telecom industry has not been utilised adequately, it says.

Most product innovations still originate from the Western
economies while Indian companies seem to be content adopting
them. One of the reasons is lack of proper research
infrastructure, education and investment, the report adds.

"Talent is one drawback we severely face in India. While
India produces twice as many engineering graduates as the
United States, only less than five per cent have basic
vocational skills essential for fruitful employment. Only
about 25 per cent graduates in India have the skills that deem
them fit to work for multinational companies. This is because
most institutes in India are built with the idea of meeting
the demand for graduate education, focused on enrolling as
many students as possible," the report says.

The report also expresses concern about the anxiety among
telecom sector investors about clarity in telecom policy.

The government should invest in state-of-the-art
laboratories or provide grants to research in the latest
technologies in the communications domain, PwC report
recommends.

"There is a lot of anxiety in the market as to how the
new policy would be framed....There are a lot of questions
that the policy will answer and in general, reveal the
government`s stand on the future of telecom. It will make or
break the much-hyped telecom sector in India. Investors are
waiting for the uncertainty to clear before committing to
investments," the report adds.

Establishment of centres of excellence that promote
research on new communication technologies would be a big
boost to the industry, and government should also incentivise
companies to set up R&D, it says.

"Today the great Indian telecom story stands at a crucial
juncture....The Indian market is typically adding ten million
customers every month, and the growth rate has become fairly
stable. The next 50 million new subscribers are those who
cannot afford the services even at such rock bottom call
rates. Another disruptive innovation is needed to include the
next billion subscribers into the telecom world."

The report expresses a worry that subscribers do not
generate more voice traffic beyond a certain limit, which caps
the average revenue per unit (ARPU) a telecom operator can
make from voice services.

As to the rural infrastructure set-ups, it notes that
most of them are off-grid deployment they receive
intermittent or no power from the electricity grid and rely on
diesel generators to run. This makes the operations expensive
and environmentally unfriendly.

PTI



First Published: Sunday, July 24, 2011 - 19:14

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