As the communications and IT ministry vacillates on whether to censor the net or not, what with communications and IT minister Kapil Sibal trying to police social networking sites on one occasion and seeking their support on another, the brief flirtation with the idea of control has shaken industry confidence in the government.
The social media network sites, which can be seen as a subset of the larger telecom and IT space, the symbol of success for India?s reforms story, has always been seen as an area where we have natural talent to grow with time. Is the government going to spoil the chances even here with regulatory hassles?
Here is what is at stake if at all Sibal tries to pursue the agenda of control over social media networks.
As per an international study by McKinsey, the spread of Internet creates significant economic growth, creating large jobs and wealth. In India alone, Internet contributed to 5% of the GDP growth in the past five years. Also, a study of thinktank Icrier found that every 10% increase in the number of Internet subscribers leads to a 1.08% increase in a state?s GDP.
While the story so far explains where we would like to be, the reality of where we are is very different. As per the Telecom Regulatory Authority of India (Trai), the number of broadband users is a dismal 12.84 million, compared to the 900-million plus telecom subscribers in the country.
And the social media, which is a confluence of ideas, opinions and creates instant communities, is expected to be a big draw for e-commerce in future.
While most companies in this space refuse to divulge any revenue numbers, suffice it to say that ?the market is yet at a very nascent stage, but is growing in leaps and bounds?, as Neeraj Aggarwal, partner and director at Boston Consulting Group, feels.
?The bulk of revenue for the social media comes from advertising,? Naveen Mishra of IDC, a global market intelligence firm, notes. This segment clocks close to 80% of total revenue of these websites.
Though none of the Internet giants have complained about anything more than the customary grouse that the move will violate the freedom of expression, the reality is that such a move will directly hit the toplines and the bottomlines of these companies.
Including the large Internet companies, this industry is growing at about 25% in terms of consumers, while in terms of money, the revenue is growing at a whopping 50% from advertising. Pavan Duggal a leading cyber law expert, says the move to regulate will bring out solid costs. ?So far these companies regulate the content post-publication, but if any such move is put in place, they will have to go for pre-publication monitoring, which is legally untenable. We already have an IT Act 2000, which supersedes any previous legislation, but doesn?t provide for pre-publication censorship,? he says. The problem is best posed by cyber security expert Vijay Mukhi, who says, ?It is not humanly possible to track who is writing what on social networking sites and there is no software in the world which can understand content. In fact, there is no technology that can screen so much content. Moreover, what is pornography in India is not so in the US.?
