Despite India being called the IT capital of the world, its PC and Internet penetration (at 2.7% and 4.9%, respectively) is among the lowest in the world. Though the last couple of months have seen a flurry of launches in the low-cost PC segment, their uptake has been largely restricted to the urban and the semi-urban parts of the country. While the low-cost, compact versions of notebooks and desktops called netbooks and nettops, address affordability issue (priced between Rs 12,000 and Rs 18,000) industry experts feel lack of last-mile connectivity and content in local languages are preventing a mobile-like revolution of India?s IT infrastructure.

?The PC industry is yet to pin-point the true value of a computer for the rural masses, which leads to a mass adoption of PCs just like the now ubiquitous mobile phones,? said Vinnie Mehta, executive director of Mait, the IT hardware industry body. According to Sandeep Aurora, director, marketing, Intel, South Asia, a country?s PC penetration is directly linked to its economic growth. He adds that while Internet connectivity is like what spectrum is for the telecom sector, the availability of various government to citizen (G2C) services will create a need for PCs, especially in the smaller towns. Intel is credited with the launch of its low-cost Atom processor, which has led to a drop in prices for nettops and netbooks along with their compact size.

According to a white paper by Deepak Menon, Karishma Kiri and Kentaro Toyama of Microsoft India, Internet browsing and email, games and computer education remain highly used services in rural PC kiosks, while e-governance, agriculture/veterinary services and healthcare contribute to less than 10% of service usage. This is partly because there are not many G2C services available online. The ambitious Rs 23,000 crore National e-Governance Plan of the UPA government, which planned to make several G2C services like tax and land records accessible to the citizens, is far from completion.

The report adds that customers demand more e-governance and agricultural services, along with enhanced computer education. ?Most kiosk owners believe that they can earn more if better Internet connectivity is given along with technical and marketing support and more locally relevant content and services,? it noted. As far as the broadband connectivity is concerned, the increasing interest shown by private players could alter the situation dramatically.

Terming it as the next growth driver, India?s largest telecom player, Bharti Airtel recently announced a tie-up with Alcatel Lucent to grow its fixed-line and broadband business. The largest player in this space is state-owned BSNL, with 36 lakh subscribers and a market share of around 60%. More competition is expected to better service along with lowering the rates. Similarly, in the urban part of the country, the launch of WiMax and 3G is pegged to create more demand for the low-cost portable devices.

As far as digital inclusion is concerned, IT giants like Microsoft (Unlimited Potential) and Intel (World Ahead programme) have been working towards it for many years now. However, they have just managed to scratch the surface. There have been various initiatives from the government?s end too, but have failed for one reason or the other. For instance, soon after coming into power, the UPA government announced the launch of the Rs 10,000 PC. HCL and Xenitis launched low-cost devices but could not sustain as they were not economically viable.

American non-profit organisation One-Laptop-Per-Child, which sells laptops for Rs 15,000 directly to schools, has set an target to sell 3 million laptops in India by end of the year 2009. However, the organisation has been involved in several controversies since the time it entered India and has not found many takers within the central and the state government to promote its devices for schools.

The government also partnered Intel in its Connected India movement which planned to launch a Rs 5,000 Internet device. There has also been a lot of noise over the Rs 500 laptop (it was just an Internet device with memory) that was a victim of too much hype and miscommunication. Recently, the BJP has promised 1 crore laptops at Rs 10,000 to students. Prodyut Bora, convener of BJP?s IT cell said such a device is possible if all the components are manufactured in India. But, the industry is of view that there are no real benefits of setting up manufacturing units in India.

(Concluded)

• Experts feel that the lack of last-mile connectivity and content in local languages are preventing a mobile-like revolution in India?s IT infrastructure

• Customers demand more e-governance and agricultural services along with enhanced computer education

• There have been various initiatives from the government?s end too, but have failed due to one reason or the other

• India?s PC and Internet penetration ? at 2.7% and 4.9%, respectively?is among the lowest in the world