India to have 175 million broadband connections by 2014: Report

by K C Krishnadas, TechOnline India - January 20, 2012

Low internet penetration has cost India UD$100 billion in GDP since 2004

India will have 175 million broadband connections by 2014, and this this tentatively translates to 700 million internet users in India vis-a-vis shared connections. The government has already laid down optical fibre in most rural areas, and the rest of the villages in the country will be covered within the next couple of years, according to a report launched by the ministry of communications and information technology.

The report titled India: The Impact of Internet at the India Digital Summit, 2012, has been prepared jointly by ICRIER, DIT and IMAI. It said that the country stands to add US$ 17 billion in GDP annually for every 10 per cent increase in internet and broadband penetration. Another $ 87 billion in GDP can be generated during 2012-2014 if targets are achieved as per TRAI’s National Broadband Plan.

Missing the targets set by the National Broadband Plan in 2004, India lost approximately $ 100 billion in GDP in the interim. The report shows that States with higher internet penetration can grow by 1.08 per cent points for every 10 per cent rise in the number of internet subscribers.

Developing states have better chances of growth than developed ones with higher internet penetration. For example, if Bihar had half as many as internet subscribers as that of Punjab, it would have resulted in an increased growth of 7.02% in the State’s per capita income.

The report comprehensively studies impact of internet at the micro level through 17 case studies across 7 impact areas, viz. agriculture, health, education/training and employment, e-Commerce/ BPOs, financial inclusion, and community development. The case studies indicate that internet promotes efficiency on a scale and speed that was previously unimaginable and that the opportunity cost of absence or disruption of access can be very high. At the same time, the report reinforces the growing power of internet in enhancing efficiency, bridging information problems, expanding reach and allowing speedier redressal of problems.

With thecountry passing the 120 million internet user figure in December 2011, it is expected to enter a critical period of growth with the possibility of becoming the largest internet using country in the world in this decade. With growing internet base, the convenience of shopping, accessing government services, healthcare, education and financial inclusion, combined with attractive deals will certainly boost the economy.

The report said that internet penetration can witness an exponential growth if broadband has a price point of around Rs. 200. The trigger point in lower price point has been reflected in massive adoption of mobile phones and cable TV. It recommends speedy implementation of optical fibre network to reach 250,000 gram panchayats in the next 3 years. If the core network is established, internet access will become comprehensive.

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