Fueling the next Indian Revolution

I have been pondering over the question of who or what will trigger the next revolution in India. Pablo’s post on the mobile revolution triggered the process [8]. Pablo was interested in determining what other factors, apart from liberalization[1,3] , were responsible for triggering the mobile revolution? He correctly summarised that the Mobile revolution [9] was brought forth because it solved a very basic need cost-effectively.

The assertion that the mobile revolutionized the average Indian’s life could be debated. Some research reveals staggering numbers. Of the billion Indians, many million companies and other entities, 68 million of them are now cellular subscribers [9]. This number by itself is unparalleled when compared to other sectors and even exceeds the landline installed base. Further, 4.5 million users are being added every month (this by itself is revolutionary). The thinking behind schemes that reach across to even the bottom of the pyramid have been there with India for a while now [2,5,6].The fact that the technology industry is warming up to such strategies can only bode well for India.

Pablo correctly surmised that liberalization only brought about the revolution quicker, the wireless nature of the mobile phone network allowed it to proliferate into areas where the landline could not reach. It brought the ability to communicate even when travelling. A common job profile in India. Only a few years ago, the second wave in the mobile revolution was triggered by a rash of schemes from wireless providers that put the mobile within reach of almost every working family in India.

The question that then persisted was what next? I offered the following areas as possibilities:

  • Voice over IP over the wireless network.
  • Micropayments using mobile phones (see mChq [MobilePundit]).
  • Wireless-based location services (see Xora).

The common pattern is the use of the existing wireless infrastructure. That is an obvious one to latch on to. However, there are arguments against each one of them. For example, for VOIP for mobiles to really succeed, STD call and local calls must cost the same (i.e. Rs 1.99 per minute) or even better, must be even cheaper than that. VOIP must also provide additional value over simple voice plans.

On Saturday, global VC’s Ram Shriram of Sherpalo and John Doerr of Kleiner, Perkins (KPCB) met with entrepreneurs and others in New Delhi [7] to talk about their interests for investments amongst other things. Their discussion centered around the following questions of interest to those in the audience:

  • What areas are KPCB looking to fund in India?
  • The Software services trend in India.
  • Why invest in yet another search engine, Google?
  • What is the role of Indian software service companies in building products for the world market?
    Are investors interested in Indian application product companies?
  • What is the state of seed funding for entrepreneurs in India?
  • What approach do you adopt when investing in India?

To add to the list of products and services part of the next wave to hit the Indian market, they added:

  • Content services for mobiles (e.g. CellNext).
  • The Consumer Web (Mobile and Internet).
  • The Internet.

While they agreed that the mobile is where it will be at, their choice of the Internet as a platform by itself surprised me. Perhaps John Doerr is trying to reconcile his more global view of the Internet being the single largest source for the creation of wealth on this Planet. The last I checked broadband penetration in India was abysmally low, those who used credit cards online even lower. Also, going by Pablo’s argument, the need to invest in wired connectivity infrastructure will slow it’s propagation.

Note that slow adoption does not imply non acceptance. India has never been known as an early adopter of technologies and standards that arise out of developed nations. But that has not really hurt us. Instead, we have always found ourselves to be in a favorable position to switch over whenever the next, more cost-effective increment in the standard came along (e.g. CDMA verus GSM, or PAL versus NTSC).

[1] “Thud in the Hills” – The Other India.
[2] “The Perfect Vision of Dr. V” – Fast Company.
[3] “The Myth of India’s liberalization” – India Uncut.
[4] About “The Other India”.
[5] “Morality of Markets” – Parth Shah.
[6] “Law, Liberty, and Livelihood: Making a Living on the Street” – Parth Shah.
[7] “Ram Shriram and John Doerr in Delhi” – ContentSutra.
[8] “The mobile revolution: economy, technology or both?” – The Spanish in India.
[9] “Telecom Sector Trend” – Indian Economy Blog.

Related stories on Sukshma.net:
Made in India for India – Why entrepreneurs and the Government must not ignore products for the Indian market.

Update (6th Feb. 2006):Tech Talk – India Internet and Mobile: Internet Challenges“. Rajesh Jain of Emergic.org from Mumbai, discusses the challenges before Indian Internet companies.

Update (7th Feb. 2006): Since no one has commented yet 🙂 on VOIP over Wireless data networks, I poked around a bit to see if this was a lot of hot air or not. I did find an affirmation that VOIP over GPRS could reduce costs. See “GPRS VOIPVOIPReview.org. In any case, there are two hurdles, wireless operators who might not approve of the usage of the data network, second is the fact that most wireless operators tack on a voice plan irrespective of what your intended use of the phone (at least that seems to be the case in the US).

Mar00ned left a link to BBC South Asia – “Fast Track for Indian Internet“.

A team of engineers in India say they have found an innovative way of bringing the internet cheaply and quickly to India’s rural population.

Update (8th Feb. 2006): Rajesh has the next installment of Tech Talk up on Emergic.org – “Mobile Challenges“. From his discussion, it seems the Indian mobile content market has turned out to be very different from markets elsewhere. However, I digress, mobile content is but an obvious windfall of the mobile revolution. Rajesh points out that any further radical change will only be delayed if carriers continually limit the options available for network usage.

There is little that can be done about that. Carriers probably feel left out when companies that add value over content or make content available begin to pull in the dough. They want to avoid such scenario’s as far as possible. See “Verizon Executive calls for end to Google’s Free Lunch” – Washington Post. I do not want to be seen as defending their selfish atitude. This serves as a warning to every entrepreneur, regulation could end your dream – quickly. Deal with it cleverly.

Update (10th Feb. 2006):India a Topper in average e-com deals“. – United Press International. Measures the trend towards e-com in India and reports surprisingly optimisitic results.

Update (19th April, 2006): Norwest Venture partners raises $650 million to fund technology deals in India, Israel and USA (wireless and Internet).


13 Comments on “Fueling the next Indian Revolution”

  1. […] In an earlier post (link) I wrote some thoughts about the influence of technology in the mobile revolution in India. Santosh has left a couple of interesting comments, and has written a post on this topic that you can read here. I also recommend you read the post The case for “Made in India, for India” I think there are very good points in that post. If we are going to help in another “revolutions” I believe Santosh is right: it should be done in India for Indian needs. This will not only give a big, huge market, to companies; it will also make the changes that the country needs.   «« Previous post: Firefox usage | […]

  2. mar00ned says:

    I would be more interested in looking at the spread of technology in India rather than introduction of new ones. I think we do not have problems in adapting newer technologies, but there is a definite need to find out cheaper ways to make it penetrate to all the areas of Indian society and geography. I woulnt call it a revolution if it is confined to a few pockets.

  3. Gaurav says:

    Well, only to play devil’s advocate, I will point out that growth of mobile phone connections has been fueled by the low cost pre-paid options available in the Indian market. Such connections are used primarily to receive incoming calls. So the big question is that will this segment actually use the mobile platform for much more than receiving voice calls?

  4. Santosh says:

    mar00ned, Gaurav,

    Correct me if I am wrong, mar00ned is suggesting that the carriers have already provided an affordable communication solution and now just need to propogate it so that everyone benefits.

    I paraphrase again, Gaurav suggests that it is not possible to fully realize the benefits of what we have right now without adding further value or introducing other technologies.

    We might be clearer if it could be shown (via anecdotal evidence perhaps) that adding additional value might actually achieve significant change for evey pocket (or person).

    I am inclined towards a wireless data network (instead of voice) as a must-have. Being able to provide 2-way communication for everyone is a good enough goal – Rs. 1.99 per minute, nation-wide over VOIP. I wonder if that makes sense.

  5. vonaurum says:

    Its not just India but many other underdeveloped countries are benefitting from introduction of new technologies. Bangladesh particularly seems to have benefited from the cell phone boom.

  6. Santosh says:

    Aurum, your talking about the Grameen phone right? Could you provide some more insight?

  7. mar00ned says:

    Read this a long time ago.

  8. […] Santosh Dawra makes a pertinent observation that VoIP should be brought in to play an increasing role in the mobile revolution. […]

  9. Rishi Trivedi says:

    Nice comments Santosh!. but frankly, i was a bit surprised that you guys are actually thinking of technological revolutions in india. trust me sitting right here in bangalore we seldom gave it a thought. i came to office today quite irritated with drivers with mobiles on. i believe we need to take a pause, and see if we can use the technology to revolutionize the education. somehow break that fascination with the degrees and focus on real education. To me that should be next revolution. Even if we lag behind during the process on the mobile and other technologies.. am sure u engineers are capable of following it up!

  10. Santosh says:

    Rishi, I don’t think the real issue is education 🙂 or the lack of it?

  11. […] At the end of the day, the Indian private wireless providers just don’t want to have to do anything that might disturb their revenues. I wish they would stop haggling and seed a long-delayed wireless data revolutio in India. […]

  12. […] want to have to do anything that might disturb their revenues. I wish they would stop haggling and seed a long-delayed wireless data revolution in India. Sure voice revenues would start to whittle down – try focusing on areas where there is real […]

  13. […] 2007 · No Comments Back in 2006, a few VC’s left their Sand Hill Road offices and visited us to talk about what investments they would like to see happen. They cheekily talked about how they […]