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India to Leapfrog Web 2.0 to Mobile 3.0

Much like India missed the industrial revolution, it is clear that India is going to miss the Web 2.0 revolution as well. There are many “Web 2.0” startups in India and some have been doing well, e.g. Zoho and SlideShare but that’s mainly due to an international user base and not indigenous Indian users.

I’ve been hard pressed to find an Indian Web 2.0 company, doing well and making money by serving the Indian subcontinent. The simple reason for this is that there are just not enough Indian computer and Internet users. Most casual Internet users will check stock prices, buy an airline ticket, look for a job, check their email, hit a social networking site and chat with others. There is a younger Indian demographic that is heavily using social networking sites like Facebook and Orkut but the amount of time they spend on these social networking sites is questionable.

Beyond the tech-savvy in India, very few people have heard of Wikipedia, Digg or the power of social media. The social “web” is taking form in India but not as most of us from the West have experienced. I predict that India will mostly leapfrog Web 2.0 and go directly to Mobile 3.0. Mobile 3.0 being highly personal, highly location specific products and services that allow 3G+ phones and even lower-end phones capable only of SMS to become part of the social fabric of the Web. There shouldn’t be any distinction between the Internet and Mobile platforms. One is just an extension of the other. As innovative user interface designs are produced, India’s 250 million mobile users can be brought into the social web much more quickly and provide them with true value which, unfortunately, they aren’t aware exists on the Internet today.

The largest impediment to bringing these 250 million people into the social web is going to be cost and the carriers holding the golden keys. Expecting the carriers to work with these small startup companies will be difficult at best. Not to mention, Indian carriers have a very bad reputation of bleeding their partners dry. They also have brought the “walled garden” to mobile phones. Companies like Airtel try to push their “Airtel Live” services instead of unfettered GPRS/EDGE. Maybe it’s not such a bad thing right now to allow non-tech-savvy people access to a limited online mobile experience, the way AOL gave subscribers an online version of a walled garden in the late 80’s and 90’s. Users will eventually outgrow the walled garden and seek more.

Estimates put the Indian mobile VAS space at about USD 1 Billion in March of 2008 and predict that it could hit USD 2 Billion by the end of 2008. These aren’t numbers to sneeze at. It’s just the beginning of the mobile application usage. Today, over 40% of VAS revenue comes from SMS. As smartphones like the Nokia N96, Blackberry Bond, Nokia E71, and Apple iPhone penetrate deeper into the Indian market, the desire for richer mobile applications connecting people together will only grow.

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