‘Install and Neglect’ Policy of Indian ISPs Hinders Internet Growth

Internet connectivity in India has decreased when compared to the number of PCs in 2006-07. According to Internet and Mobile Association of India and IMRB report, the proportion of PC owners with Internet connection has shown a decline from 2005-06. In 2006-07, it is decreased to 68% from 75% in the previous year. That means only 68 computers have internet connections out of 100. This is because of the failure of ISPs in providing better services, as 54% of the ISPs failed to meet the benchmark quality in providing service, according to TRAI report of performance indicators for December 2007.

The gap between the number of PC owners and the internet subscriptions is widening as the growth of Internet could not catch the growth of PC sales. The Internet growth is seriously affected by the poor service quality of the ISPs. According to the TRAI report of performance indicators, it has been stated that 54% (7 out of 13 ISPs which have more than 10,00 subscribers and have 98% of market share) of the ISPs have failed to offer benchmark quality in providing services with in 15 working days, which reflects the grave situation. It has also been stated that 39% of the ISPs failed to restore services within next 3 working days of the compliant lodged.

The above figures vindicate the lack of customer oriented approach by the Indian ISPs, which are very much interested in sales but not in after sales service. Customer receives many calls from ISPs persuading for a sale, but typically ends up with making unyielding calls to customer care for service. ISPs often fail to offer promised speed- says ‘up to 256 mbps speed’ which is vague. They don’t give any guarantee of the stated connectivity speed at any point of the day, which is purely dependant on the traffic at the time of access.

Some of the serious drawbacks of ISPs are crippled maintenance service, unskilled technical support, low security, frequent breakdowns in connectivity and meager customer service. Apart from these technical drawbacks, ISPs also charge exploitative prices for the Internet subscriptions, which are far higher than the western countries. Poor service quality at higher price affects the viability of small scale offshore IT and ITES businesses in India.

According to the recent report released by TRAI, the broadband subscriptions reached 3.9 million from 3.47 million in February 2008. That means only 430,000 new broadband subscriptions were taken in March 2008, which is very disappointing at 11% growth. The percentage of broadband connections of total Internet subscriptions is around 35% of 11.15 million* Internet subscribers, which should grow further to support eCommerce in India. Unless and until ISPs encourage internet subscriptions with improved service and better quality at reasonable price, Internet usage and broadband will not grow considerably.

The worrying aspect of the disappointing Internet and broadband growth in India is that it will result in lagging of eCommerce in India. This would also lead to loss of job opportunities in the new age industries in a country aggressively looking to create jobs. Further, it would make the Indian eCommerce market lag not only against developed countries but also against the Asian ones.
*The number of Internet subscribers is calculated taking the growth rate of the quarter ending December 2007 from the earlier quarter that is 7.64%. The number of Internet subscriptions is 10.36 million by December 2007, according to TRAI.

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