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How does India, third largest economy in the world, compare with other BRICS nations on digital inclusion? There’s not one indicator – subscribers, penetration, affordability or speed – where India ranks anywhere close to the top. Digital India has some serious work to do if it wants to achieve its ambitious targets.

 

Ever since Goldman Sachs’s Global Economics Paper No 66, Building Better Global Economic BRICs, was published in November 2001, BRIC and later BRICS has become more than just an acronym for four and then five “large emerging market economies”. These five countries, Brazil, Russia, India, China and the last entrant South Africa, are now among the largest economies in the world. India, according to the last IMF figures is the third largest economy in the world with GDP of USD 7.38 trillion, while China is the largest with 17.62 trillion in purchasing power parity terms (see Table 1). Only South Africa does not figure in the top ten economies of the world.

Table 1.Gross domestic product based on purchasing-power-parity (PPP) valuation of country GDP

 

2013
(in billion)

2014
(in billion)

Estimates Start After

China

16,173.27

17,617.32

2013

United States

16,768.05

17,418.93

2014

India

6,783.66

7,375.90

2014

Japan

4,685.29

4,750.77

2014

Germany

3,610.06

3,721.55

2013

Russia

3,491.62

3,564.55

2013

Brazil

3,212.29

3,263.83

2014

Indonesia

2,511.44

2,676.04

2014

France

2,534.51

2,580.75

2014

United Kingdom

2,449.73

2,548.89

2014

South Africa

683.962

704.514

2014

Source: IMF’s World Economic Outlook 2015 Edition.

The relationship between GDP and the internet has been studied academically and has been inferred by consulting companies.(1)Business magazines have used some of these measures. The Economist in 2012 published a Boston Consulting Group chart suggesting the contribution of internet to the GDP of some countries. The chart was later criticized because it did not seem to be an accurate measure of the use of the internet, and was at best a measure of the contribution of e-commerce to GDP. Recently, some economists have been struggling to ascertain how to assign value to the vast number of free transactions that take place on the internet including free classes, and the view seems to be that the GDP numbers may be underestimating the true value of the internet. The debate on the accurate calculation apart, there is no denyingthat the internet has an impact that goes beyond the GDP. So it is worthwhile for us to see how the BRICS nations compare with each other on internet or digital penetration or digital inclusion.

Before looking at the specific figures let us outline the key indicators that we should use for this comparative assessment. While the International Telecommunications Union provides a list of ten core indicators ranging from proportion of households with radio to internet activities undertaken by individuals, the ITU’s own data across these ten parameters for the five countries is incomplete and does not lend itself to comparison. Considering the challenges to internet useand digital inclusion discussed elsewhere on NetPehchaan.in, it is important that we look at measures of digital inclusion in three areas – subscriber base and internet penetration as a percentage of population, affordability, speed, and promise by providers vis-à-vis delivery.

The subscriber base provides the most direct way of comparing the present state of digital inclusion. At the very least, it answers the question as to what proportion of the population has a subscription (which is different from access since those without subscription can also access the internet) to the internet. So while the data may underrepresent the total number of those on the internet, it gives a number to begin this task. It is clear from Table 2 below that India, going by 2013 figures, is at the very bottom of the total subscriptions per 100 population. Even if the July-September 2014 TRAI figures of 75.73 mn broadband subscriptions are used, we will get broadband subscription (both wireline and wired) of only 6.09 per 100 population, which is still way below the 2013 figures for Brazil, Russia and China.

Table 2.Subscriptions per 100 population (2013)

 

Fixed (wired)-Broadband Subscriptions per 100 population

Active Mobile-Broadband Subscriptions per 100 population

 

Rank

Per Hundred

Rank

Per Hundred

Brazil

73

10.1

37

51.5

Russia

50

16.6

29

60.1

India

125

1.2

113

3.2

China

59

13.6

78

21.4

South Africa

106

3.1

 

NA

Source: The State of Broadband 2014. Broadband Commission.

The ITU provides data for the percentage of people using the internet, and the data below for 2013 (Table 3) shows that India with 15.1% using the internet is one-third of China which has about 46% of its population using the internet.

Table 3.Internet User Penetration

 

Rank

Percentage

Brazil

74

51.6%

China

86

45.8%

India

139

15.1%

Russia

57

61.4%

South Africa

80

48.9%

Source: ITU 2014. Data 2013

The data for Fixed Broadband population penetration (Table 4) does not present a different picture. Here too we find India at the bottom of the pile with a rank of 117 and a penetration of 1.2%. While this may be 2013 data, as has been pointed out before, the TRAI data does not suggest any spectacular gains. The Mobile Broadband population penetration paints (Table 5) an even more dismal picture. With a 3.2% penetration, India is ranked at 117 and the nearest BRICS country is China, which has a penetration of 21.4% and a rank of 84. So as far as the simple measure of penetration is concerned the world’s third-largest economy is lower than 110 other countries as per the last comparable figures available. South  Africa, which performs lower than India across several parameters, does much better when it comes to internet penetration or use.

Table 4.Fixed Broadband Population Penetration

 

Rank

Percentage

Brazil

75

10.1%

China

62

13.6%

India

117

1.2%

Russia

51

16.6%

South Africa

102

3.1%

Source: ITU 2014. Data 2013

Table 5.Mobile Broadband Population Penetration

 

Rank

Percentage

Brazil

44

51.5%

China

84

21.4%

India

117

3.2%

Russia

33

60.1%

South Africa

34

58.5%

Source: ITU 2014. Data 2013

The scenario in the realm of affordability of internet is not much better for India. Comparable data for the five countries show that though the average cost of fixed broadband is towards the lower end at USD 16 in PPP terms and USD 4.8 monthly averages, the percentage of average GDP per capita required is 3.66%, which is the highest (See Table 6). Consequently, the rank is 74. This becomes worse when the affordability of mobile broadband is compared. The rank drops to 101 and the percentage of average GDP per capita required for access becomes a whopping 12.39% with the cost at USD 54.2 in PPP terms (See Table 7).

Table 6.Affordability of Fixed Broadband
(% of average GDP per capita required for fixed broadband access)

 

Rank

Percentage

USD Month Average

USD in PPP

Brazil

38

1.42%

13.8

16.6

China

73

3.54%

19.4

31.9

India

74

3.66%

4.8

16

Russia

5

.54%

6.3

11

South Africa

63

2.85%

17.1

30.3

Source: ITU 2014. Data 2013

Table 7.Affordability of Mobile Broadband
(% of average GDP per capita required for mobile broadband access)

 

Rank

Percentage

USD Month Average

USD in PPP

Brazil

67

3.23%

31.5

37.9

China

62

2.95%

16.1

26.6

India

101

12.39%

16.2

54.2

Russia

30

.95%

11

19.2

South Africa

78

4.30%

25.8

45.7

Source: ITU 2014. Data 2013

The Alliance for Internet Affordability provides another insight into internet affordability with a composite index which uses a more elaborate methodology. Since it looks at countries where affordability is an issue, it does not look at Russia, where as per the ITU data access can be gained by spending less than a percent of average GDP per capita. As is evident from Table 8, India is a shade below China in the overall affordability index and substantially behind Brazil.

Table 8. Affordability Index

 

Sub-index:
Communication Infrastructure

Sub-index:
Access

Affordability Index:
Overall Composite Score

Brazil

57.4

56.9

57.6

China

39.5

46.2

43

India

40.8

37.4

39.1

Russia

NA

NA

NA

South Africa

33.4

53.2

43.4

Source: Alliance for Internet Affordability

Table 9. Cost of Broadband for those earning less than $2 a day (less than Rs 125)

 

Poverty
headcount ratio
at $2 a day (PPP)
(% of population)
(World Bank)

Total population
living at less than $2/day (monthly
income $61)

Cost of mobile
broadband prepaid
handset-based
(500MB)/income
level $2

Cost of mobile
broadband postpaid
computer-based
(1GB)/income
level $2

Cost of fixed
broadband/
income
level $2

Brazil

6.79

13,604,574

NA

51.6

29.2

China

18.61

252,608,418

75.1

26.5

38

India

60.57

758,420,953

28.6

26.6

9.8

Russia

NA

NA

NA

NA

NA

South Africa

26.19

13,875,983

12.7

42.3

46.1

Source: Alliance for Internet Affordability

One of the insights that the Alliance for Internet Affordability offers is in the figures it puts out for cost of broadband for those earning less than $2 a day or less than about Rs 125 a day. Since earning less than $2 per day is an indicator of poverty, Table 9 above provides us with a snapshot of broadband access for those who are poor. We find that the prepaid handset based access is much less than it is for China, and the fixed broadband is by far much cheaper at only 9.8 times as compared to the other countries. But these multiples also tell us how difficult it would be for those living at less than $2 a day to get these services. India with more than 60% of the population earning $2 a day or less is far more disadvantaged than other countries where the percentage of those at poverty levels is much less. Notice Brazil has only 6.79%, China 18.61% and South Africa 26.19%. Poverty levels in India make it extremely difficult for poor people to access the internet, and since affordability is one of the main deterrents to digital inclusion, we see the challenge for India to ensure such inclusion.

Even if one were to afford an internet connection, the question is how do the download and upload speeds compare with other countries. The Netindex data presented in Tables 10 to 15 present different aspects of not only net speed both in fixed broadband and mobile, but also give us a sense of the value of such broadband and crucially how the actual speed compares with the promised speed. Again these scores paint a rather dismal picture of India. The fixed broadband download speed for India makes it 128 out of 194 countries ranked, and the lowest among the BRICS countries (See Table 10). The upload speed of 4.73 Mbps is higher than that of Brazil and South Africa. However, that is still not able to take the country higher than 94 out of 194 countries.

The value of broadband, which is an interesting indicator provided by Netindex, places India at 54 out of 62 countries. Value is the median cost per megabit per second and it is USD 8.67 for India, which is better than only South Africa. To put that number in perspective, the value for Russia is USD 0.63, for China USD 1.55 and for Brazil USD 3.36. India is therefore 13 times more expensive than Russia, 5.5 times more expensive than China and 2.5 times more expensive than Brazil when the value of broadband as a function of speed is measured. This data is put further into relief when we look at the promise of broadband, which looks at the actual speed vis-à-vis promised speed. India at 75% is ranked 53 out of 63 countries, which shows that the internet service providers are falling far short of what they are promising consumers. In other words, it is as if the Indian consumer is not only paying very high prices for the broadband connection, but is also getting poor speeds.

Table 10. Internet Performance – Fixed Broadband Download (In Mbps)

 

Download

Rank

Brazil

13.31

79 / 194

China

27.08

41 /194

India

6.88

128 / 194

Russia

29.43

34 / 194

South Africa

7.1

124 / 194

Source: Netindex. Accessed on April 26, 2015

Table 11. Internet Performance – Broadband Upload

 

Upload

Rank

Brazil

4.48

105 / 194

China

12.63

35 / 194

India

4.73

94 / 194

Russia

28.16

17 / 194

South Africa

3.64

120 / 194

Source: Netindex. Accessed on April 26, 2015

Table 12. Internet Performance – Value of Broadband (2)

 

Value

Rank

Brazil

$3.36

32 / 62

China

$ 1.55

9 / 62

India

$ 8.67

54 / 62

Russia

$0.63

2 / 62

South Africa

$18.99

62 / 62

Source: Netindex. Accessed on April 26, 2015

Table 13. Internet Performance – Promise of Broadband (3)

 

Promise

Rank

Brazil

95%

16 / 63

China

102%

1 / 63

India

76%

53 / 63

Russia

96%

12 / 63

South Africa

75%

54 / 63

Source: Netindex. Accessed on April 26, 2015

The performance of the mobile internet connection is not any better. India stands at 99 out of 112 for mobile download speed with a rate of 3.47 Mbps as compared to 26.2 for China, 10.49 for South Africa and 8.53 in Russia. Brazil, which is closest to India, is at 8.06 Mbps, which is more than twice as fast as India.

Table 14. Internet Performance – Mobile Download

 

Download

Rank

Brazil

8.06

73 / 112

China

26.2

3 / 112

India

3.47

99 / 112

Russia

8.53

66 / 112

South Africa

10.49

56 / 112

Source: Netindex. Accessed on April 26, 2015

Table 15. Internet Performance – Mobile Upload

 

Upload

Rank

Brazil

3.15

73 / 112

China

9.29

8 / 112

India

1.0

104 / 112

Russia

3.16

72 / 112

South Africa

3.57

66 / 112

Source: Netindex. Accessed on April 26, 2015

The upload on mobile is dismal at 1 Mbps, which makes India 104 out 112 countries. Contrast this with 9.29 in China and 3.15 in Brazil, which is the closest to the Indian upload speed.

It is amply clear that there is not one indicator – subscribers, penetration, affordability or speed – where India ranks anywhere close to the top. Even if India is the third largest economy in the world, when it comes to digital inclusion parameters, the country is far behind comparable economies. If adult literacy and income is considered, which are the enablers of digital inclusion, then the Indian digital inclusion story becomes even more alarming. India has the lowest adult literacy among all the BRICS countries, and the percentage of people living on less than USD 2 is the highest in India. A 2011 Digital Inclusion Index by risk analysis firm Maplecroft had put India in the highest risk category. The ten parameters used for this index can be questioned (4), but there is little doubt that when we consider all the available data that has been presented and compare India to other BRICS countries, serious and urgent attention needs to be given to achieve the potential of Digital India.

AlokeThakore is an independent journalist, researcher, newsroom coach and teacher. He serves as the Hon. Director of the JM Foundation for Excellence in Journalism and has been associated, over the last three years, with a number of research projects on telecom and internet access. He is also the founder-director of Font & Pixel Media Pvt Ltd, a media and education enterprise.

(Rankings in Tables 3, 4, 5, 6 and 7 are drawn from Internet Society's Global Internet Report maps available athttp://www.internetsociety.org/map/global-internet-report/. Differences in ranking, though not in per centages, is because some countries and entities are excluded when ranking by one agency, and include by others) 

Netpehchaan.in, May 2015

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