2007 South Asian - Broadband and Internet Markets

This Asia market report covers eight countries in the South Asia sub-region. It takes an overall look at the various telecoms markets, together with a particular look at the broadband and Internet segments of the market in each of the countries.a healthy tourist industry, Internet usage has been relatively substantial.

The South Asia markets covered in this report include: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.a healthy tourist industry, Internet usage has been relatively substantial.

Generally speaking, the penetration of Internet across South Asia remains low. Broadband access is almost non-existent across much of the sub-region and there are no signs of an early major upturn. The more significant impact of Internet in South Asia is to be found in India and Pakistan, where Internet usage is creeping towards 10% penetration. But for most of the other markets going online has been a struggle. One interesting exception has been the Maldives; with its small population combined with a healthy tourist industry, Internet usage has been relatively substantial.

South Asia - Internet markets - user penetration and subscribers - 2006

Afghanistan

After a period in which the Internet was banned by the Taliban, and even government departments were prohibited from going online, Afghanistan has started to be opened up to the opportunities associated with the world wide web. The market remains very basic for the time being. Whilst it has been difficult to obtain reliable Internet users statistics for Afghanistan, the ITU was reporting an estimated 535,000 at end 2006. There are certainly not many computers in the country, with many areas not even having electricity. For the country overview, see chapter 2, page 5.

Bangladesh

The Internet came late to Bangladesh with the first connectivity only in 1996. Over the last few years, growth has been dramatic, although obviously from a very low base – the estimated user base was 500,000 by early 2007, representing less than 0.4% penetration. PC penetration is also low, at less than 2%. The country’s first broadband service was launched in 2001 using DSL technology. A cable modem service was also offered at about the same time. But, for the time being, broadband services remain a minor component of the country’s Internet market. For the country overview, see chapter 3, page 8.

Bhutan

After a late start, Bhutan has been cautiously embracing the Internet. DrukNet, the country’s first ISP, was launched following an agreement between the Bhutanese Government and the United Nations Development Program (UNDP) in March 1999. There were an estimated 30,000 Internet subscribers (4% penetration) in the country at end-2006. Accurate statistical information on Bhutan is difficult to obtain; there is even a huge variation between sources on what is the country’s population. For the country overview, see chapter 4, page 15.

India

India is a country where the local IT industry in its many forms is booming. It is ironic, therefore, that we find a somewhat ambivalent approach to Internet in this country. Whilst there appears to be considerable enthusiasm amongst the population for the Internet, this is not reflected in subscriptions. There were around seven million subscribers to Internet access services in early 2006, the vast majority being dial-up subscriptions. But most significantly, an estimated 60% of users regularly access the Internet via the country’s more than 10,000 Internet cafes. When it comes to high-speed broadband Internet access, the slow take up rate has also been especially puzzling. In particular, the country’s corporate sector has been surprising lacking in interest, although there are signs that this is changing. In 2006, broadband subscriptions grew by around 200%. This also saw the percentage of Internet subscribers in the country with broadband access jump to 18%. National broadband penetration remained at a depressingly low level of less 0.2%. For the country overview, see chapter 5, page 18.

The Maldives

Incumbent Dhiraagu provided the first Internet access in the Maldives when it launched its DhivehiNet service in 1996. Although initially offered only on a dial-up basis, Internet usage has been expanded through the setting up of Internet cafes. Broadband Internet arrived when Dhiraagu introduced its DSL service in 2002. By end-2004 the operator had more than 700 broadband subscribers. Although official figures were not available, by end-2006, there were an estimated 25,000 Internet users in the country, which only has a population of 300,000. For the country overview, see chapter 6, page 43.

Nepal

The Internet user base in Nepal is estimated at less than 200,000 – a lowly penetration of under 1%. On a positive note, however, the population have been able to access Internet for some of the lowest prices in the region. In the meantime, the licensing of a relatively large number of ISPs, combined with the liberalisation of the VSAT data market, has created excellent conditions for the Internet to flourish in the country. For the country overview, see chapter 7, page 46.

Pakistan

Although Internet access has been available in Pakistan since 1995, take up rates and penetration have remained relatively low. But this was starting to change and by early 2007 user penetration was at around 8%. Following the military regime of General Pervez Musharraf taking control of the country in 1999, an aggressive IT policy was pursued, aimed at boosting Pakistan’s drive for economic modernisation and as well as creating an exportable software industry. Whilst this has been helping boost the popularity of the Internet, there was a long way to go. Even the existence of more than 150 licensed ISPs has not been having a major effect on Internet growth. The broadband Internet market in Pakistan is almost non-existent. For the country overview, see chapter 8, page 49.

Sri Lanka's

The Internet has also started to take off in Sri Lanka, but coverage and accessibility remains limited (Internet user penetration has been languishing at around 2%) and the sophistication of the services available remains relatively low. The number of ISPs has jumped to 23 over the last few years. Early moves to offer broadband Internet in the country met with only limited success. However, by end-2006, about 20% of Internet subscriptions were broadband-based, possibly signalling a shift in the market. For the country overview, see chapter 9, page 57.

Data in this report is the latest available at the time of preparation and may not be for the current year.