Will Voice Be The “Killer App” For Internet In India?

There seems to be a palpable change in outlook on the Internet in India over the past couple of months. Over the past year, we’ve seen a number of startups being launched, some of them being funded, and much excitement in the Internet domain. Reports have given numbers of between 24 to 47 million Internet users (with figures like “ever Internet users” to fuel interest and hype), and we’ve tried to do our bit by hosing down ”irrational exuberance”; been called sceptics and cynics (among other things), but that comes with the territory.

Everyone appears to be waiting for a watershed event in India for Internet to take off - some kind of a miracle that will spark an increase in usage. Internet adoption has been inordinately slow, plagued by relatively high costs, poor infrastructure and connectivity, dependancy on relatively expensive and immobile (pun intended) PCs, extremely poor quality of service, among other things...is it surprising that we’re only adding around 70,000-90,000 broadband connections a month, compared to 7-8 million mobile connections? I hope to be proven wrong, but I sense that growth in number of Internet users will continue to be painfully slow, with no sudden spurt in number of connections.

More in the extended entry.

One solution appeared to be the opening up of the last mile, but that doesn’t seem to be a priority. Even if the last mile is opened up, one can’t expact broadband to take off with poor connectivity and abysmal quality of service. As reader Mobstir had mentioned in one of the posts - where’s the content? Rather - where’s the use case? Matrimonial and job sites have provided a use case to one segment, and I’m wondering if voice will be a use case for a larger group. Mint reports today that around 40 ISPs are awaiting the governments nod for allowing Voice over Internet Protocol (VoIP) calls to terminate in Public Switched Telephone Networks (PSTN) - i.e. landline and mobile. Currently, only telecom companies are allowed to do this, but have obviously not pushed the service since it impacts their mobile/landline revenues.

People won’t take to broadband just because of low cost calls, though they might do so for free calls. And mobile operators will oppose free VoIP calls. Another interesting segment in this domain includes those like Fring, which is a mobile IM which allows voice calls and chat over GPRS, 3G and WiFi. ISPs are already opposing the likes of Google (NSDQ: GOOG), Microsoft (NSDQ: MSFT) and Skype offering free VoIP calls, as will mobile operators once (if) Internet becomes more pervasive in India. That’s what happens when changes in technology threaten business built around expensive legacy infrastructure.