Most scientists believe that before the universe in its current form came into existence with a big, solid bang, there was nothing but super dense, superhot mass of super stuff. The rules of physics, as we know them, quite probably did not apply, and what existed back then can at present only be speculated about with extreme uncertainty. To a casual observer, trying to look at the Indian market beyond the event horizon of the country’s rapid digitisation, accelerated by the entry of Reliance Jio, appears to be a similarly unfathomable situation.
It is hard to imagine a time when people weren’t walking around engrossed in their smartphones, tweeting and sharing and posting stuff on the go, binge-watching entire TV shows on their daily commutes, and shopping for gifts for their partners on the very day of the anniversary. But trust us, dear friends, there existed a time when India was not as digitally-savvy as it is today.
2001-2010: The decade of the (largely dis)connected India
India got its first taste of public internet in August 1995. This phase is what we like to call the dial-up phase. The country’s internet market was then a monopoly owned by the Videsh Sanchar Nigam Limited (VSNL), which provided its customers with the lightning fast connection speed of 56KB/s on its good days. Service disruptions were more common than actually getting connectivity, and heavens forbid if someone decided to make a long call on the phone line which also served as the primary – and only – gateway to the internet. Integrated Services Digital Network (ISDN) was introduced in 1997, but with the infrastructure hardly capable of providing enough bandwidth to its users, things did not improve by much. Users often had to resort to lighting agarbatti and dhoop around their computer screens, praying to whatever digital gods were listening to get some connectivity.
All these hassles came at a high price. During the initial days, the Gateway Internet Access Service (GIAS) was made available to individual users for $160 for 250 hours, while institutional dial-up SLIP/PPP accounts paid $500 for institutional dial-up SLIP/PPP accounts. Leased lines services were priced even higher. Needless to say, the internet – for the average consumer – was hardly worth the trouble, or the money, of getting a dedicated setup installed at their homes. Most internet connections were taken up by business users. Cyber cafés became extremely popular during this phase, with people often waiting in long lines to get their turn to go online.
The internet, at this time, was good for little more than checking emails, randomly browsing through the web, and accessing chat rooms. But Indians are nothing if not tenacious and willing early-adopters. Despite the issues faced with internet connectivity, VSNL signed up 10,000 customers within six months of its launch. By 2001, there were around 7 million internet users across the entire country.
Things started moving in a positive direction in the second half of the decade. With the broadband policy formulated in 2004, the government, in a bid to extend internet connectivity to a larger section of the population, opened up the sector to private players. The increased competitiveness that this enabled played a major role in improving connectivity across the country, as well as in bringing down the internet tariffs. This led to a drastic increase in the adoption of internet connections for personal as well as business purposes.
It was around this time when Indians first started accessing mobile internet on 2G/EDGE networks. Users were using the 2G connectivity provided by networks like Idea and Tata DoCoMo to access Orkut and Facebook, search for information, and download songs and videos on their handheld devices and their computers. With more and more consumers opting for mobile operators that also provided them with decent internet connectivity, other players rushed in to meet this emerging market demand. The auction of the 3G spectrum by the government also made high-speed mobile internet more available and accessible, further consolidating mobile’s position as the primary medium of accessing the internet.
The champions of this evolution were the country’s millennial users, who were finally coming into their own as a consumer segment. What also greatly aided the rise of mobile connectivity was the availability of relatively affordable dual-SIM phones from emerging Chinese companies – established giants such as Nokia and Samsung were late to this party – which allowed users to switch between network operators at will. Indian consumers, long known and hailed for their jugaadability, were tapping into the best of both worlds, using one network for accessing the internet and the other for making calls and sending SMS. By 2010, Gartner estimated that dual-SIM phones accounted for nearly 15% of the overall mobile phone market in India, while the number of mobile subscribers in the country was estimated to be in excess of 617 million by TRAI. This was perhaps the first instance of such a significant shift in consumer behaviour in India being driven by technology – one that set the foundation of the large-scale digital transformation that was to follow.
Interesting, isn’t it, to peel back the layers of India’s staggering metamorphosis into a digital-first nation? We will continue the story of the country’s digitisation and how it has redefined consumer behaviour and market dynamics in the next post. Stay tuned!