We Have Not Marketed The Internet Medium Well In India

Internet and Mobile Association of India (IAMAI) is an industry body founded in January 2004 which represents various members of India’s internet and telecommunications ecosystem, such as online publishers, e-commerce firms, mobile marketing agencies, content and services businesses, large OEMs, handset manufacturers and network companies. IAMAI lobbies with the government and is also involved in growing the internet and mobile ecosystem in the country. In conversation with Techcircle.in, Subho Ray, President, IAMAI talks about how the body has been scaling up, the recent modifications to the IT Act and offers his expert comments on the country’s lagging internet uptake and challenges faced by e-commerce entrepreneurs.

How has IAMAI been scaling up and what is your agenda for the year?

Our membership has grown from around 14 in 2006 to 110 as of April, 2011. From a close group of large Internet players initially, we are much more broad based and representative of industry. We now aspire to represent the entire gamut of stakeholders in the digital space. The association has a truly democratic structure in all matters: we follow the principle of one member one vote irrespective of the size of the company.
We focus on areas including advocacy, consumer awareness and business development for our members and CSR activities. We have grown exponentially in the last five years in all areas of work: advocacy, market research, segment development and industry events.

What are your thoughts on the speed and uptake of internet in India?

We have not marketed the medium well in our country. Unless you are able to convince people about the usefulness of the medium, you will never be able to create the necessary pull for adoption.
There are differing numbers on the size of India’s internet base – the government says it’s around 12 million connections, Google India says it’s 100 million users and IAMAI says it’s 65 million users. Why are these numbers different?
The government talks about internet connections not users; Google talks about people who hit their site [probably]. We talk about a real consumer survey. Once the details and methodology are known, people can pick their relevant number. In any case, in the past five years, I have seen most researches on numbers converging. We should be able to talk more on converging internet user numbers once our annual internet in India report is published next month.

How is IAMAI acting as a bridge between the government and industry?

We have an excellent relationship with government agencies that we work with and it helps that none of the sectors we represent are very involved or dependent on the government.

After the recent modifications to the IT Act, what is the current mood of the internet players and what can we expect, going forth?

Some of the rules for section 79 of the IT Act that guarantee safe harbour for all the intermediaries appear to be tricky to comply with. We have made our views on these problem areas to the government clear and expect some movement on this soon.

TRAI issued a directive to operators regarding their activation of value added services without taking the permission of mobile users, as it had received 672 complaints. How are operators resolving the issue?

A TRAI directive does not leave any option so operators and M-VAS companies have to follow it.

What is your take on the current e-commerce market and challenges faced by entrepreneurs?

All entrepreneurs face challenges and e-commerce entrepreneurs are no different. I think the biggest challenge that they face today is selling the category itself. I, for one, would strongly advise them to collectively create and sell the category highlighting its key virtues in parallel with building their own individual brands.

How will the government’s proposed rules for FDI in multi-brand retail affect e-commerce in India?

Most importantly, it will encourage iconic names like Amazon to set up shop in India. This in turn will mean international best practices in terms brands, scale, efficiency and customer service. Of course, there will be some buy-outs, burn-outs and stand outs! However, we would not overestimate the importance of FDI in multi-brand retail in jumpstarting the e-commerce industry in India. E-commerce so far has grown on local steam and that is going to continue; secondly, FDI itself is not a sufficient cause for international brands to set shop in India.source

Strategic Tax Exemptions Will Boost High Technology Sector: IAMAI

New Delhi: Internet and Mobile Association of India (IAMAI) is of the view that strategic and well-thought tax exemptions will boost high technology sectors like digital and mobile value added services. IAMAI has made a near-impossible demand for tax exemption under Section 10(A) of the Income Tax Act for Internet and mobile service providers, mobile content providers, mobile value added services (VAS) platform providers and transaction providers on Internet and mobile platforms.

A similar tax exemption to the software and telecom sector about ten years back had given them the requisite incentive to grow to the current status. IAMAI believes that government intervention in the form of such fiscal benefits will help propel the digital industry to grow. It feels that unless incentives are given to the digital content providers and VAS industry, broadband penetration would not take off the way it has been envisioned by the Government of India.

“The income tax exemption granted software and telecom sectors have ensured that they have the necessary government support to scale up and achieve global size. A similar measure is needed for the digital content providers to ensure that e-penetration takes off in India and we have large successful companies that will carry forward the India brand,” said Dr Subho Ray, President, IAMAI.

Among other suggestions, IAMAI also sought a five-year moratorium on service tax on online services and online advertising industry under Section 65 of the Income Tax Act. It believes that a moratorium will allow this nascent industry to grow and stabilize. Small and medium enterprises (SMEs) depend on the digital medium to access domestic and international market. IAMAI believes that the additional burden of service tax will adversely impact the growth of this sector.

“Five year service tax moratorium as opposed to the stimulus package already put in place by the Government will go a long way in aiding the SME sector to grow and access new markets. It may be noted that SMEs comprises about 40-50 %of the industrial output and any fiscal incentive will help them tap newer markets and use the digital medium better,” opined Dr Ray.

IAMAI made these recommendations in its pre-budget memorandum that was put forth before various ministries, finance, commerce and communications and Information technology.source

Airtel increases mobile internet charges

Airtel, the market leader in mobile space, has announced an increase in mobile internet browsing charges on its mobile office service.

Airtel has more than doubled the charges from 30p/50 KB to 30p/20 KB. However, if you have taken a package you are less likely to be affected. For instance, if you are paying a fixed charge of Rs 98 for 2GB data access, you are unlikely to see any change in your bill.

On the other hand, Airtel's Live WAP portal, which was free of charge till now, will be charged at the rate of 30p/20 KB with effect from December 28, 2010.

Whether other operators will follow suit is yet to be seen. Since it is a move that has been made to check excessive load on the network, there is a possibility that operators whose networks are not very busy will not hike prices.

Another possible reason could be to push people to take up fixed monthly plans for internet access, thereby securing a minimum revenue per user for the operator.

As per an Internet and Mobile Association of India (IAMAI) report, there was 104 per cent increase in users of mobile internet in 2009 as compared to 2008. As the trend is going to get stronger, moves like these might hamper it. In heavily competitive markets like India, such moves might not be feasible.