Release spectrum in larger chunks, have lower reserve prices, and create an environment where market forces drive telecom firms to bring down the pricing of Internet access to users
The problem with providing Internet access in India starts at the top, with the government, which primarily thinks of spectrum auctions as a source of income, and not as a means of enabling access for public good.
And so it creates scarcity of spectrum, and monetizes that scarcity to balance its fiscal deficit. Spectrum is auctioned piecemeal every year, and telecom operators who either need the spectrum to improve quality of service or see it as a land-grab to prevent competition from others, drive prices up.
In the end, the consumers who pay for Internet and mobile services bear the cost of provisioning spectrum, and thus, the balancing of the fiscal deficit.
To keep prices down and profitability up, operators look at other avenues of monetization, such as the Airtel Zero service that Bharti Airtel launched and which violated Net neutrality. Their method of data caps and “Fair Use" policies is linked to the idea that some users create congestion by using bandwidth-heavy services such as video.
The only way of dealing with these issues is to address them by creating abundance: release spectrum in larger chunks, have lower reserve prices, and create an environment where market forces drive telecom operators to bring down the pricing of Internet access to users.
We have had many changes in the market dynamics that have brought us to a situation where there were, at the end of 2015, 330 million data/Internet subscriptions, translating to 391 million unique Internet users online in India, according to the TiE-Analysys Mason report, which will be made public at the India Internet Day event in Gurgaon on Friday. Nearly a quarter of those users were added in the past year alone.
What the onset of 3G (and lowering 2G prices) has managed to do is tap a hunger for access to information and communities, and empowerment with the promise of a better life. The quality of access is essential in growing Internet usage, and other changes can be made to facilitate that.
Some of these things are quite basic.
1. Make policy changes to ensure that all phones sold in India use Indic language-ready operating system software, covering most of the major languages. This will ensure that Internet usage isn’t just limited to those who can read and write English, and encourage a country full of application developers to build for Indian users.
In the early 2000s, the early Internet adopters used to throng cybercafes, for access to portals such as Naukri.com, which would help them find jobs. The e-commerce boom of the past few years has brought access to clothes, phones and utilities that smaller towns have never had access to before; the quality of life is improving because the Internet is disrupting neighbourhood or local monopolies, and giving consumers more choice. The next level of growth has to be about utilities in Indian languages, and the new Internet users should not just be encouraged to consume, but also create.
2. Allow content providers, content delivery networks and data centres to connect directly to the National Internet Exchange of India, which would encourage companies to host locally, avoiding the additional cost (and latency) associated with sending traffic out of India—when both the content creator and consumer are based in India. This also helps Internet service providers (ISPs) bring down the cost of access for consumers.
3. Let government buildings host Wi-Fi routers from private telecom operators and ISPs. This will allow them to reduce the impact of congestion by offloading traffic to Wi-Fi, especially in cities, where they face congestion issues the most.
4. Encourage competition among ISPs to bring down prices: it was the launch of mobile operators such as Uninor and Tata Docomo, and the pricing innovation of per-second billing that brought prices down, and benefited consumers.
In the early 2000s, we saw consumption grow when India switched from dial-up to broadband, and in the past six years, with the launch of 3G services. A similar switch is needed now, and change will only be rapid if we begin by addressing scarcity of spectrum and encouraging competition.
We need to move beyond vanity-metric targets such as bringing a billion Indians online, and encourage users to both consume and create in an open Internet environment. Using 50MB per month does not an Internet user make.
Nikhil Pahwa, editor and publisher of MediaNama, is a co-founder of savetheinternet.in and a TED Fellow 2016.
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