Business, Governance

4 Big Pushes to Internet Access in India in 2016

This guest column is authored by Rajan Gupta, Director, U2opia Mobile

Internet access is vital for the growth of emerging economies, yet half of the world’s population is unconnected.11th Internet Governance Forum, that happened in first week of December 2016 in Mexico was high on development agenda. How internet access can be used to expand opportunities worldwide?

The 2016 conference was focused on how the Internet can contribute to the 17 Sustainable Development Goals (SDGs) outlined in the agenda adopted at the UN General Assembly in 2015.

Back home despite the Modi’s Govt focus on Digital India and internet access– the year started on somber note with Failure of Facebook Free Basics. Telecom regulator TRAI ruled that the free basics infringe the principles of net neutrality. The ruling was not directly aimed at Free Basics, but the general practice of zero-rated internet services — those that let users access certain apps and websites without eating away at their mobile data.

“Prohibition of Discriminatory Tariffs for Data Services Regulations” states that providers cannot “offer or charge discriminatory tariffs for data services on the basis of content being accessed by a consumer”

However, this couldn’t dampen the aspirations of the unconnected. The resolve of the incumbent government and corporate only got stronger. Four landmarks developments gave tremendous boost to internet connectivity in India in 2016.

1. Google Free Wi-Fi Hotspots at 400 Railway

After addressing the town hall session at Facebook’s headquarters, Prime Minister Modi visited the Googleplex in Mountain View, California, in Sept last year. India-born Google CEO Sundar Pichai announced a partnership with Indian Railways to install 400 Wi-Fi hotspots at the busiest railway stations — 100 of which would go online in 2016.

In January 2016, Mumbai central station became the first railway station in India to have free Wi-Fi facility offered by Google in association with RailTel. Google’s Wi-Fi project, which has largely been welcomed, shows why Free Basics was flawed from the start: While Facebook was pushing a limited Internet where users could access its services along with others that Facebook chose, Google was giving away the entire Internet and faster Internet.

Google announced this month that its free Wi-Fi is now working at the 100 busiest railway stations in India. Over five million people in the country latch on to Google’s free internet service every month, with 15,000 of them accessing the internet for the first time in their lives every day.

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2. Launch of Reliance JIO

Jio will drive the country’s ranking in mobile Internet access from 150th position to among top 10. It has a capacity of over 10 GB of data per user per month, which is 100 times the current data consumption average of 0.15 GB of data per user per month.

The total Internet connection in India right now is 432.12 million and is expected to touch 732 million by 2020.

Keeping this in mind the Indian telecom Industry formed an informal cartel to boost the profit. Data tariff in India is amongst the highest in the world or approx. Rs 250 for 1 GB. The Reliance is trying to break this cartel by disruptive pricing i.e. Rs 50 for 1 GB of data.

Jio’s network carries 16,000 terabytes of data traffic a day, exceeding the levels of China Mobile (12,000-plus TBs/day), Vodafone Global (6,000 TBs/day), China Unicom (4,000 TBs/day) and Bharti Airtel (2,000 TBs/day). Jio’s data traffic of 16,000 TBs a day is based on the company’s 16 million customers consuming 1GB of data daily.

Company has set ambitious target of to acquire 100 million subscribers within two years with monthly average revenue per user (ARPU) of at least Rs 250.

3. TRAI recommended Free “Reasonable” Mobile Internet in rural India

With an aim to support the Centre’s drive of creating a cashless ecosystem, the Telecom Regulatory Authority of India (TRAI) on 19th Dec,16 recommended that a “reasonable” amount of free mobile internet should be provided to rural subscribers every month. This scheme, the costs of which are suggested to be met from the government’s Universal Service Obligatory Fund (USOF). The Department of Telecommunications (DoT) charges a cess to telecom operators under the USOF, proceeds from which are used for increasing telecom connectivity by setting up infrastructure across the rural and remote areas of the country.

In order to bridge the affordability gap for the persons residing in rural areas and to support government’s efforts towards cashless economy, the Authority recommends that a scheme under which a reasonable amount of data say 100 MB per month may be made available to rural subscribers for free.

However, regulator made it categorical that scheme for free data must not be misused to circumvent the “The Prohibition of Discriminatory Tariffs for Data Services Regulations” notified on 8th Feb,16. The authority strongly reaffirms that there can be no differential pricing of data based on content which would distort the market and is therefore not permitted.

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4. Demonetisation

Rural India, or Bharat, home to about 870 million people, the countryside will be in the thick of action for the rest of the decade, according to a recent report by management consultancy firm BCG. Titled “Rising Connected Consumer in Rural India”, BCG predicts that rural users will constitute about half of all Indian internet users in 2020. While the number of connected rural consumers is expected to increase from about 120 million in 2015 to almost 315 million in 2020 — a compounded growth of almost 30% a year — rural growth will significantly outpace growth in urban centres.

And what’s driving the rural growth, adds the report that was published in August, are cheaper mobile handsets, spread of wireless data networks and evolving consumer behaviour.

Demonetisation would have topped the list of drivers if the report was released after Prime Minister Modi’s Mitron address on 8 Nov, 2016. All the wallet companies saw traffic and transactions increasing by 10X -15X overnight post the move. What appeared to be change forced from the top is slowly becoming preferred mode of transactions. As summed up nicely by Bipin Preet Singh, Co-Founder & CEO MobiKwik –“Before demonetisation, wallets were an option. Now they are a need”.

Paytm’s numbers on day 2 of the demonetization:

Traffic Increase: 7x increase in traffic

App Downloads: 3x increase in new App installs overall

Add Money: 30% increase on yesterday’s base which was 10X higher than average

Offline Payment Transaction Increase: Overall increase is now 5X of average

Overall Transactions: 3X of average

Transaction Rs Value: Continues to be 200% of average ticket size even on day 2

Saved Card: Paytm has now added 1mn new saved cards in last 2 days

Meanwhile, MobiKwik said that it saw a whopping 2000% increase in add money and transaction value. MobiKwik’s average ticket size for offline transactions rose to Rs 3000 from Rs 1300–1500 before demonetisation.

Conclusion– The year 2016 had been a great year for internet connectivity in India. All these developments will have positive impact way beyond 2016 on how internet is perceived and consumed by average BharatwasiGovt’s focus and policy support for connectivity in the country is a welcome change. Hope the affordable internet access remains the key theme in 2017 and remaining tenure of the incumbent government.

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