Internet and cellular services suffered in the initial years. They were expensive and unaffordable for Hoi polloi, mass markets. They had elitist overtone.
Years of value creation
The decade from 2000-2010 can be termed as the years of value creation, the listing of the companies on BSE and Nasdaq. Jumping, therefore, from the scene in 1995 and today 25 years later, there is a correlation of growth, which can be very clearly identified in the expansion of both cellular services and the availability of smart devices. The proliferation of the internet that we boast of today could not have been possible in the early years without these two critical factors.
In 1995, the first year of the internet in India, of the 35 million fixed-line subscribers, there were about 50,000 internet connections. Today with smartphones in hand and over a billion-plus mobile subscriber, we have 700 million internet-enabled cellular connections and we consume about 12 GB of data a month. This is projected to grow to 25 GB by 2025.
This could happen only because of the explosion in connectivity, a drop of tariff, affordability, and availability of smartphones, access devices, and content for all classes of users, and multiple other services that have made internet service as useful as a utility like electricity, water, and gas. The naysayers missed these points, or perhaps choose to ignore them.
Driving the economic benefit
We can correlate the benefits of connectivity with the stock market. In 1995, the BSE that hovered around 3,500 stands close to 40,000 today; it has grown about 12 times or at an annual Compounded Annual Growth Rate (CAGR) of 11 %. Look at the companies in the stock market, which ruled those days. Neither any cellular company nor any knowledge company was listed at BSE in those days.
The market capitalization of BSE then was between USD 250-300 billion as compared to USD 2.3 trillion. Yet again, it’s a CAGR of 11%. Interestingly, of the USD 2.3 trillion stock market capitalizations today, over USD 1 trillion is contributed by the cellular industry and the knowledge industry. On the GDP front, we have grown from USD 360 billion to USD 3-3.3 trillion-plus (CAGR of 10.9 %). Knock off a USD trillion from market capitalization and GDP, and we are down by about 75 to 100 basis points in both cases.
Let me add yet another evidence of growth in software services: while the revenues from the sector increased from USD 1.25 billion in 1995 to USD 180 billion in 2020 (CAGR 12.2%), the employment numbers soared from near 50, 000 to four million direct (CAGR 11.0%) and 10 million (CAGR 11.5%) indirect jobs. What this means is that connectivity created value for everybody. It created jobs for people, giving or offering opportunities to innovate for the community. All this has happened because of the Sangam or a confluence of five elements: affordability, availability of devices, connectivity, innovation, and content.
Masses find their moorings
The year 2020 is a year of various milestones. It is, however, also the year COVID-19. From the technology perspective, the pandemic has emerged as the biggest driver of digital transformation. This underlines the social impact of connectivity. Since March 2020, connectivity has been filling several gaps – today it makes one move thousands of miles without moving an inch from the cozy home environment. Every conceivable action this year has been possible by the word, “E” or “Tele”.
Time zones have been smashed, distances have shrunk, and work discipline has undergone a sea change. Most of the services that we can think of today can be made available because of this connectivity. This is something that we could have never have imagined 25 years ago.
I, therefore, call this connectivity as the 4th dimension, a medium or a platform on which any kind of information can be carried. Like roti, kapda, and makan, connectivity is now part of our lives, ruling and dictating our lives often.
TheauthorBrijendraK.Syngal,formerCMDofVSNL, ispresentlySeniorPrincipalwithDuaConsulting. Heisalsoauthorofthebook,TelecomMan:Leading fromthefrontinIndia’sDigitalRevolution