‘Install and Neglect’ Policy of Indian ISPs Hinders Internet Growth – 2009

Internet connectivity in India has decreased when compared to the wireless connectivity in 2007-08. According to TRAI report, the base of Internet subscribers in India has reached to 12.85 million in December 2008. This is very low compared to 101.10 million wireless data subscribers in India in the same month. This is because of the failure of ISPs in providing better services, as 36% of the ISPs failed to meet the benchmark quality in providing service, according to TRAI report of performance indicators for December 2008.

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 36% (5 out of 14 ISPs which have more than 10,000 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 36% 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 5.52 million in December 2008 from 4.90 million in September 2008. That means only 620,000 new broadband subscriptions were taken by December 2008, which is very disappointing at 12.65% growth. The percentage of broadband connections of total Internet subscriptions is around 43% of 12.85 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 broadband subscribers in India was 5.52 million at the end of December 2008. The number of Internet subscriptions is 12.85 million by December 2008, according to TRAI.

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