Goldman Sachs forecasts e-commerce boom in India
Source : Business Standard
Jul 27, 1999, 8:44:27 AM
A rapid increase in the number of private Internet service providers and the current regulatory regime of non interference in setting tariffs would result in fierce competition among major players and drive down costs in India, a Goldman Sachs Investment Research study has said.
Goldman Sachs predicts a 76 per cent compounded annualised growth in the number of users by 2003, the fastest in Asia. Quoting figures from International Data Corp, a global body that tracks developments in information technology, the Goldman Sachs study forecasts nine million users in the country by 2003. The study says the value of e-commerce transaction in India will increase to over $ 1.7 billion in 2003 from $ 3.5 million in 1998.
"It is clear that one of the factors driving this is the liberalization of the ISP industry which drives the growth of the Internet user base," the study says. "India's flourishing software industry lends itself to a successful Internet industry. The needed skills and entrepreneurship is clearly present in the software sector and we believe the software companies are likely to increasingly incubate in house talent," the study says.
The Goldman Sachs study, however, points out that currently penetration of personal computers is "extremely low" of about two million units for a population of close to one billion. "As the PC is the basic device for Internet connectivity, PC penetration must increase for the ISP services to increase," the report says. The problem is also compounded by the low telephone penetration, it adds.
Currently, there are 19.1 million telephones in India and the report points out that the number of telephone lines must also increase to facilitate the spread of the Internet services. |
