Satyam goes for the hard cell - Satyam Infoway

Business Asia, Oct, 2000 by Cameron Cooper

One of India's IT leaders says Asia can surpass the United States as the king of global e-business. CAMERON COOPER reports

FOR A man who was instrumental in spawning the personal computer market in India, R. Ramaraj is remarkably blase about the PC being superseded as an internet tool.

That's because he sees new technology driving Asia's push to become a global IT leader.

The chief executive of Satyam Infoway, the first Indian internet service provider to list on the Nasdaq, believes the world's e-business focus will gradually shift from the United States to Asia.

"If you look at the cellular phone, for example, I think Asia in terms of technology and usage is ahead of the United States. And we are hoping that it need not necessarily be the computer alone that keeps the IT revolution going forward," he says.

After a diverse corporate role in India, Ramaraj became one of the drivers of India's PC revolution 14 years ago when he set up a retail chain to sell computers.

He now believes mobile phones and set-top boxes could be the instruments that drive e-business in Asia and enable the region to rein-in North America.

"If you look at all devices, I think there is a greater chance of Asia adopting those technologies and maybe using that to catch up with the level of technology usage in North America," he says.

In turn, this is encouraging India's world-renowned IT engineers to swap the Silicon Valley for Bangalore. "(In terms of) intellectual capital, most of our top school students were trying their best to get out of the country to improve their career opportunities (in the US and United Kingdom)," he says.

"Now what's happening is there's a lot of focus on education. English is the largest spoken language and a lot of education is in English. Science and mathematics is something again that we find is an important focus in our education system. There seems, therefore, to be a natural progression into computers and languages.

"We find that people at different levels of income think that they can actually come up in life if they focus on IT because it's based on natural talent, not necessarily on any other support. This has become the key motivator for a tot of youngsters because they can see, without too much cash and wealth, that they are able to progress and build a future for themselves."

An on going problem for the world, and Asia in particular, is a lack of optic fibre to build the infrastructure to power high-speed internet access.

Global consultant Arthur Andersen has identified the low personal computer and internet base as major hurdles for healthy ecommerce growth in India. "The penetration of personal computers in India is quite low at 3.6 computers per thousand people, against 362 per thousand people in the United States," Andersen said in a recent report.

The report endorses a long-standing demand by various industry associations to increase India's bandwidth capacity. It adds that the nation's current telecom infrastructure does not support high bandwidth access, thereby reducing speed of access and hindering e-business growth.

If Ramaraj is worried that a shortage of optic fibre is stifling the "new economy" in India, he's not letting on.

He admits that "computer penetration, unfortunately, is not all that great", but argues that the IT revolution is still having a significant impact in India. He says there were about 6 million personal computers in India at the end of March, 2000, but that 1.6 million would be added by the end of this year.

"There's significant growth there," he says. "But more important is that there are almost 12,000 cyber cafes in India now -- kiosks where people can actually walk in and use the internet. So from a consumer point of view there is a fair amount of interest and the ability to access the internet."

What is for sure is that the Indian government is implementing significant policy reforms. With the government's recent decision to grant ISPs international gateway licences, India may have scaled the biggest structural hurdle in the growth of the internet.

Ramaraj says the Vajpayee Government's decision to end the state monopoly in submarine optical fibre connectivity -- thereby easing the bandwidth crunch -- will propel the spread of the internet in the country. "The VSNL monopoly was largely responsible for stunting the internet's growth and with the Government closing that long and sordid chapter in the country's cyber history, the international gateways will partially relieve the crippling bandwidth problem that India faces," he says.

The move comes on the heels of a decision to allow private ISPs to set up their own landing stations anywhere in the country in tandem with international undersea bandwidth carriers. Arthur Andersen has lauded the government initiatives, including the new Information Technology (IT) Act 2000, which provides legal recognition of digital signatures and electronic contracts.

Satyam is adamant that privatisation of the optic-fibre industry will improve India's global connectivity. Foreign companies are moving in, while Indian firms have announced their intention to dig trenches for cabling. "So, there is a fair amount of cable, but (in addition) there are now clear incentives for companies to lay infrastructure," Ramaraj says.