BackDigital India will create impact by 2018: Forrester
Report says India will feel the impact once private players start leveraging broadband infrastructure to expand products and services
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New Delhi: The government’s flagship Digital India mission is yet to touch the lives of Indians, a research report said.
The country will feel the impact of Digital India only beginning in 2018 once private players start leveraging broadband infrastructure to expand products and services, said the report by technology research firm Forrester.
“Digital India is composed of many pieces, but the largest piece is last-mile connectivity," said Ashutosh Sharma, vice-president and research director, Forrester Research, and co-author of the report. “While government is looking to connect all the gram panchayats (GPs) and common service centres through fibre optics, that’s not the only thing that they need."
“The government has appointed designated public sector companies to roll out fibre optics to bring connectivity to rural areas. However, what is missing is the business piece of it," he said. “Government is now looking for entrepreneurs who could set up ISPs (Internet service providers) in rural area to reach last mile connectivity goal. Once small businesses start getting ISP licences, it will further accelerate the process. It will take a couple of years to reach that stage."
An ISP provides internet services leveraging digital infrastructure such as fibre optic networks.
“Prime Minister (Narendra) Modi’s Digital India initiative is a renewed push to address the delays plaguing flagship programs that focus on universal broadband access and mobile connectivity," the report said. “Direct spending via public-sector organizations like BSNL (Bharat Sanchar Nigam Ltd), Railtel, and PGCIL (Power Grid Corporation of India Ltd) will be limited, but significant indirect demand will result from many more of the 68% of India’s population that lives in rural areas coming online."
While entrepreneurs will start leveraging the network first to roll out products and services, government services will lag behind, said Sharma. “What will drive the adoption is services such as e-commerce and online travel. Just as travel agents set up shops in rural and semi urban areas to do bookings for users, e-commerce players will start setting up shops where people can go and get help from e-commerce company’s agents for buying things. Their (people living in rural areas) exposure to such services will eventually drive the adoption of public services," he explained.
Meanwhile, the private sector remains bullish about tech spending by Indian companies fuelled by the Digital India initiative and steadily growing Indian economy.
India’s tech purchases, which include computers and peripheral equipment, communications equipment software, tech consulting services, tech outsourcing and hardware maintenance, will grow by 12% in rupee terms in 2016 and 2017, the report said.
Technology expenditure will reach ₹ 2.32 trillion in 2016 and ₹ 2.59 trillion in 2017 from ₹ 2.08 trillion in 2015. A third of that spending will be on hardware, which remains the biggest area of expense for Indian companies. However, communications equipment spending will grow more slowly than the rest as the market continues to mature and prices drop.
“This will occur even as Digital India gains traction and telcos launch newer and better communication networks, such as 4G," the report said.
In 2014-15, the Union government initially planned to connect 100,000 gram panchayats by fibre optics, which was later scaled down to 50,000. According to data up to March 2015, only about 20,000 gram panchayats had been covered under the National Optical Fibre Network (NOFN), which was later renamed BharatNet.
Till about December 2015, 32,272 GPs were covered with 76,624km of fibre laid, according to government data. The BharatNet project aims to establish a scalable network by 2017 towards providing affordable broadband connectivity of 2 Mbps to 20 Mbps to all rural households and institutions.
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