The Internet Divide
By Ali Akbar
Oct 25 - 31, 1999
Development of Internet services in South-East Asia has been remarkable. But access to the Internet is still woefully inadequate in South Asia, where it is needed most.
By any scale of measurement, the South-Asian continent has the potential to become the largest bloc of telecom users within a five-year time span. Shortly after the turn of the century, the region will be the home of about 3.5 billion people, which would lead to make markets of a size and scale that have been unheard of in the West. Complementing the billions of dollars of investment pouring into the region for increasing teledensities, many countries in South-East Asia are channeling some of the resources towards developing Internet services.
Indeed, developments such as the so-called multimedia super corridor (MSC) in Malaysia indicate that extending access to the Internet is a cost-effective way of making people telecom-aware today, and will be an integral part of service requirements tomorrow. The accomplishments of the National Computer Board (NCB) of Singapore, the objectives of the multimedia super corridor (MSC) project in Malaysia and the rapid growth of IT and Internet use in Taiwan, Hong Kong, Korea, Thailand, and even Indonesia, are influencing policy-makers in the other countries of the region such as Pakistan and India.
In India, for example, multi-site companies are building intranets, while some provincial governments are building their own 2 Mbps IP network for improving governance, serving public hospitals, as well as commercial undertakings such as transport corporations, electricity companies and so on. Whereas Pakistani government officials have kept strong eye on the strategies and policies implemented by neighboring countries. Pakistan officials shall finally implement those strategies in Pakistan after observing the impact in neighboring countries.
In this context, the liberalization in other countries, notably Malaysia and Indonesia, lends powerful support to the cause of telecom reformers in Pakistan and India. The on-rush of global electronic highways and the Internet are compelling Pakistan telecom to deploy optical fiber cables extensively. The private sector basic telephone licenses are obligated to use only fiber optic cables (or wireless) within access networks.
South Asia is already trying to gain shares in software export and utilization of growing technology such as Internet. Last year $ 1 billion worth of software was exported over about 450 leased high speed (64 kbps and above) data circuits and seven dedicated teleports that offer broadband digital satellite and submarine cable links in the region. Software exports are growing at about 40 per cent per year and the main buyers seem to be in the US, Japan and Western Europe.
Within India, domestic software sales were $ 800 million last year and is growing at the rate of about 30 per cent. PC sales, booming ahead at 50 per cent annually, will inevitably lead demand for more networking facilities. Businesses, trading houses, distribution companies, banks and financial institutions are already planning hundreds of intranets and these will all be part of the future market for interconnection of intranets with the Internet. Given this demand, current facilities are miles away from meeting customer expectations.
As for as Internet user-base is concerned, Pakistan is lot ahead of India but both countries have slower growth rate comparing to other countries of the region. There are 50,000 estimated Internet users in India, over 65,000 in Pakistan and around half a million users in each of the nearby countries like Malaysia, Singapore, Hong Kong, Thailand, Taiwan and Korea. The rapid penetration and large number of users in those countries are mainly due to a multiplicity of ISPs - China has 30, Hong Kong 90, South Korea 15, Singapore three, Thailand four, and Indonesia has six. Whereas Pakistan has over 40 and India has 2. In contrast, Japan has 1300 and the US has 7000 ISPs. Moreover, since communication (leased line as well satellite bandwidth) costs are high, Pakistan and Indian companies are establishing their Websites and homepages in the US, to enable overseas inquirers/customers to liberally access them.
Government regulations and restrictions are prime factors for slower Internet penetration in Pakistan and India alike. Both Pakistan and Indian governments restricted ISPs to go through their telecom channels: through PTCL gateway in Pakistan and through VSNL gateway in India.
After repeated demands from customers, especially businesses, the Indian government has now taken a decision to end the monopoly for Internet service provision and promised to give licenses to private companies without license fee for two years. Whereas Pakistan government has already issued over a hundred ISP licenses with Rs.500,000 license fee.
China: The World's Fastest Growing Internet Market
Internet users in China will climb from 2.1 million to more than 6.7 million in 1999 according to a recently released report called "The Internet in China" jointly published by BDA (China) Ltd. and The Strategis Group. The report stated that by 2003, China's Internet user base would exceed 33 million growing at an annual rate of nearly 60 percent over the next five years. It also suggested that China is already the fastest growing Internet market in Asia and will become one of the world's leading markets in the next five years
Millions of Internet Users in China
Source:BDA China Limited
The opportunities are growing for new players, including cable TV operators, to tap revenues in the ISP market, which are forecast to exceed US$ 4 billion by 2003.
China also presents a burgeoning market opportunity for Internet equipment, software and service. The "Internet in China" forecasts this sector to exceed US$160 million in 1999. Foreign vendors currently dominate China's Internet infrastructure market, but domestic players are expanding their efforts to serve this growing market.