India - Broadband Market, Internet Services and Forecasts

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An overview of the Start and History of Internet Usage in India

The state-owned Videsh Sanchar Nigam Limited (VSNL) launched Internet Services in India in August 1995. For the first four years , VSNL was the sole provider of Internet Services in the Country. In the first years, broadband usage in India was growing 20% per month, according to the Internet Service Providers Association of India (ISPAI). Thanks to the progress in the penetration of ICT and especially, the Broadband Policy announced in 1995, the term “broadband” entered the mass lexicon and most Internet users were aware of faster Internet speeds.

In November 1998, the Government ended VSNL’s monopoly and allowed provisioning of Internet Services by Private Operators. The Terms and Conditions of the ISP’s License were unusually liberal with no License Fee and allowed unlimited number of players. ISPs could set their own tariffs and even their own International Gateways.

Women lead the rural Internet rush in India. In year 2004 the Internet was having a revolutionary effect on the 700 million people who lived in villages in India - and the change was led by women. A project set up by one of India's leading technology institutes put women in charge of forging the way across the digital divide as the proprietors of a fast-growing number of internet cafes or kiosks around the sub-continent. In total 80% of these new kiosks were run by women, many of whom have had very little or no acquaintance with technology before.

While India initially embraced the Internet with a degree of ambivalence, there was tremendous enthusiasm among dial-up users and an estimated 60% of Internet users were still regularly accessing the Internet via the country’s more than 10,000 cybercafes. When it came to high-speed broadband access, however, there was a reluctance to embrace, especially within the corporate sector, and the growth of broadband remained relatively slow. By early 2011 there were just over 13 million broadband subscribers – a lowly penetration (by population) of slightly more than 1%. Wireless broadband technologies were attracting considerable interest in India as operators paid large licence fees on the back of the government’s spectrum auction in mid-2010. Significant network rollouts were underway and there was no doubt that this accelerating the adoption of broadband. This report looks at the stage the development of broadband Internet has reached in India.

The broadband market has started to growth, but from a low penetration of 1%; wireless broadband networks are being rolled out across the nation; the operators are testing a variety of wireless-based platforms, the allocation of frequency spectrum has become a sensitive issue as the government attempts to free up blocks held by other ministries; the government continues to promote growth strategies and has prepared a National Broadband Plan; the government has been placing a major emphasis on getting broadband into the rural areas.