In a way FY 08 was a landmark year. The domestic IT market at 34% growth
beat exports (27%) hands down. For years together it was exports that led
growth, and that too by a significant margin. Also, this fiscal saw laptop sales
cross the 20-lakh mark, with both commercial and consumer use taking off.
The other big achievement in 2007-08 was the mobile phone penetration going
well past the 250 mn mark. The latest announcement to auction spectrum for 3G
and wireless broadband in India now sets the stage for the next phase of growth.
And this would be the growth of the common man, and therefore the growth of the
domestic IT market.
Just imagine what 3G and WiMax will make possible. These technologies will
enable high-speed hi-quality Internet, faster broadband wireless rollouts,
better quality of voice, and better utilization of spectrum. The benefit would
be for the entire spectrum of users in terms of applications like tele-education,
tele-medicine, Internet gaming, mobile TV, and so on. And for the mobile worker
the options to work from the field and remote locations will suddenly open up.
All this should also be good news for the Indian IT industry. The software
component of roughly $2.5-3 bn that is expected to be pumped in by the telecom
operators to deploy 3G, will mean that software players also get a piece of the
pie. Further, all the applications and content that will be needed to leverage
3G for the common man as well as for business users will come from software and
content companies, which have so far been small and insignificant in the overall
arena.
Ibrahim Ahmad |
The benefits go far beyond the mobile phone users. The spectrum auction for
3G services is expected to get the government coffers up by anything in the tune
of Rs 35,000 crore. This is a huge amount of money and even if a fraction of it
could be re-deployed into projects like SWANs and CSCs, the entire landscape of
India could be turned around. And the domestic IT market could explode.
A big challenge will be for the mobile users in Delhi and Mumbai, where the
number of 3G players could be restricted to only two, if initial reports are to
be believed. This could even result in costlier 3G services.
That this 3G policy does not help CDMA operators much is another challenge
that must be quickly addressed by the government. There are thousands of
business users who are on CDMA and will be severely handicapped if they cannot
get next generation communications services. The Indian IT and telecom ministry,
which happens to be under a single command, is hopeful to get spectrum from
Defense, but could run into difficulties. In fact, many believe that more 3G
operators for Delhi and Mumbai could be possible only in the next phase of
auctioning.