Internet Industry in India

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After the dotcom kaput in 2000, Internet Industry in India has steadily emerged as a powerful sector and is generating considerable worth for several shareholders. Over a decade, the sector has witnesses the materialization of forceful, protractible business models and international brands such as eBay, Google, Amazon and Yahoo. The international search engine, Google, is unquestionably the major achievement story of the India internet industry.

For a firm that has been in continuation in the Indian internet market for 8 years has an existing evaluation of around $120 billion, and is leading the market, followed by Time Warner, making it the most expensive global media firm. Among the Indian dot-coms, Shaadi, Naukri, Rediff, Indiatimes, Yahoo India and Bharat matrimony are making considerable amount of revenues.

In addition, as per a research carried out by Nokia, the communications sector is estimated to surface as the biggest driving component in India's GDP with a contribution of about 15.4% by the FY2014.

Growth of Internet Industry in India

The Internet started when Netscape IPO launched Web 1.0 in the year 1995, generating billion-dollar initiations in the Western economy. The wave reached India in 1999, with a bunch of entrepreneurs making a foray into this money-spinning business.

The internet industry soon witnessed the creating of million dollar firms like Yahoo!, eBay, Amazon and Google, with combined market share of USD 350billion. The listing of Google in the year 2004, revealed the speed at which one of the most expensive media firm can be formulated. This gave rise to Web 2.0 which sis steadily emerging in India.

The growth of Internet users in India from the year 1998- 2007 has been illustrated in the table below:

Financial Year Internet Users Populace Ratio in %
1998 1,400,000 1,094,870,677 0.1
1999 2,800,000 1,094,870,700 0.3
2000 5,500,000 1,094,870,800 0.5
2001 7,000,000 1,094,870,900 0.7
2002 16,500,000 1,094,870,950 0.6
2003 22,500,000 1,094,870,975 2.1
2004 39,200,000 1,094,870,980 3.6
2005 50,600,000 1,112,225,812 4.5
2006 40,000,000 1,112,225,900 3.6
2007 42,000,000 1,129,667,528 3.7

The entire subscriber support for internet users in India in the year 2009 was 82 million. However, the market reach in India is one of the lowest as compared to its western counterparts like South Korea, United States, Japan, etc; estimating to 7.5% of the total populace. The amount of broadband connectivity in India has undergone an incessant expansion since 2006. Entire broadband connections in India attained the customer base of 8.03 million, by the end of January 2010.

Major Players in Indian Internet Industry

Post fiscal liberalization in the year 1992, several private ISPs have made a foray into the Indian Internet market along with their own domestic loop and access infrastructures. Some of the major players in the Internet Industry in India are:
  • BSNL
  • Tata Teleservices
  • Hathway
  • Airtel
  • Reliance Communications
  • Railtel
  • Sify
  • MTNL
  • You Telecom
  • STPI
  • Netcom
  • Spice

Government Initiatives for Internet Industry in India

The New Telecom Policy, 1999, launched by Indian government, specifies objectives in contexts of initiating Telecom Network with an aim to attain telecom compactness of 15% by end of financial year 2010. It also establishes goals for offering Net Access to all the provincial main offices which it attained in the year 2002. In addition, the administration has started several upbeat implementations in the propagation of the Internet facilities in India. Some of such measures are mentioned as under:
  • In the year 2003, the government levied authorization charges on the ISPs which are the most moderate permit, till 31st October 2003. Subsequently, only a coupon authorization charge of ` 1 every year is forfeitable.
  • There are no limitations on the amount of Service Providers in A, B and C categories.
  • ISPs have been allowed to establish Global Gateways by executing commercial set-ups with international Satellites Providers and associates.
  • ISPs have been allowed to offer preceding mile accessibility for utilizing Radio and Fiber Optics.
  • ISPs have been allowed to offer ISP facilities via Cable Television Operators.
  • Internet Telephony Services was launched for ISPs on April 1, 2002.
  • The central administration has launched a thriving strategy to extend National Internet Backbone (NIB) in India.
  • The government has approved the law acknowledging electronic deals named Information Technology Act, that assist in offering lawful structure for e-commerce in the country.

Challenges Ahead for indian Internet Industry

One of the biggest challenges faced by Indian Internet industry was the lack of vernacular content that saturated the user access to only English speaking Indians. For the industry to add another 50 million users, turning vernacular was the best alternative. At present matrimonial dotcoms like Jeevansaathi, popular search engine like Google and Yahoo!, etc. have launched a vernacular version of the websites.

After bravely emerging from the language hindrance, internet is yet to witness its transformation from knowledge seeking trade to an out and out commercial business. At present internet mainly provides product services. So downloading ringtones or videos from a website generally differs in quality and not in price, hence, making Internet synonymous with low-priced information. To overcome this issue, users themselves have to take the initiative of accessing the internet for the finest content and willingly pay for it.

Indian internet business has merged competently with the conventional financial system and has become a part of our everyday life. The internet industry is bound to change our lives in the coming years the way Industrial Revolution did.

Last Updated on 03th May 2011