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India 54th in networked readiness index

T. Ramachandran

The country has come up with a “very mixed performance,” says report

KOCHI: India has been ranked 54th among 134 countries in the latest edition of a global report that evaluated the capability of nations to leverage Information and Communication Technology (ICT) for their overall benefit and economic progress.

The country has slipped down four positions compared to last year in the Networked Readiness Index (NRI) 2008-09, which primarily evaluates the ICT environment, readiness and usage in different nations, taking different variables into consideration.

The eighth edition of The Global Information Technology Report (GITR), released a few days ago, was prepared by the World Economic Forum in partnership with INSEAD, a leading business school.

Denmark occupies the first position in the index and Chad comes last. As for India’s neighbours, Pakistan occupies the 98th position and Nepal the 127th.

The report finds out the extent to which nations have an ICT-conducive environment, by looking at the broad business environment, regulatory aspects, the soft and hard infrastructure in place, the degree of preparation needed for its use by various stakeholders (individuals, business and government segments) and the actual degree of ICT use by them.

While China has fared better than India over the past year in terms of improving its position in the rankings, both nations have registered “impressive upward movements across decile ranks.” In the decile rankings, in which nations are positioned based on divisions of tenths, China and India have gained five and three places respectively since 2001, the report said.

However, compared to the previous year’s ranking, China has gained 11 positions to occupy the 46th spot, overtaking India in the process. India has been ranked 60th in the environment component sub-index, 40th in the readiness component sub-index, and 59th in the usage component sub-index. The report described India as having come up with a “very mixed performance,” citing the ranking of the country in terms of key indicators.

“On the one hand, India’s business readiness [27th] remains impressive, thanks to high-quality management schools [12th], significant corporate spending on R&D [29th], and a broad base of suppliers. This results in high ICT usage by businesses [30th], with a fairly strong capacity not only to adopt new technologies [26th] but also to innovate [35th]. On the other hand, like China, India ranks a low 114th in the individual usage category because of a very spotty ICT penetration. Notably, and despite a two-fold increase, there are fewer than three PCs and only seven Internet users for every 100 inhabitants, corresponding to 94th and 99th place, respectively. The quality of the infrastructure environment is poorly rated (76th), despite India’s ranking 3rd worldwide for the availability of scientists and engineers and 27th for the quality of its research institutions.”

While mobile telephony had emerged as “one of the most important and widespread forms of ICT in recent decades,” the study found that high mobile telephony penetration was not inevitably synonymous with high networked readiness.

Regulatory policies

“To unlock all of the benefits the mobile industry can generate in emerging markets, governments and regulators need to establish a coherent set of regulatory policies that actively increase coverage levels while reducing the minimum cost of ownership.” These policies should ensure sufficient but not excessive competition, help avoid direct price controls, attach strict rollout and coverage requirements to mobile licences, effectively manage spectrum allocation and pricing and help avoid high levels of taxation.

India vs. Philippines

The report referred to the contrasting experiences of India and the Philippines in this context. “Both India and the Philippines are geographically diverse and have largely the same income levels. However, the Philippines, with three operators having an average EBITDA (earnings before interest, taxes, depreciation and amortisation) margin of about 66 percent, enjoys universal network coverage (roughly 99 percent) and mobile penetration of 60 per cent. India, on the other hand, with 37 per cent network coverage and 28 per cent mobile penetration, is a market where even the best operators rarely exceed EBITDA margins of 40 per cent,” it noted.

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