10 predictions for year 2007

Written by: Vivek Garg

On Dec 31st, 2006

I have been thinking about the predictions that I want to make for the upcoming year. Predicting is a tricky business unless you are inspired by Nostradamus. First few things that come to mind if you tried predicting about the consumer Internet industry in India are : “mobile 2.0 will lead the way to web 2.0″ or “more investments in booming industry” or “we will see increased M&A”. These predictions are either extended state of our present or they are generally true. So with the risk of sounding really stupid from iLeher camp, we put forward 10 specific predictions for year 2007. We tried to make them as specific as possible. Remember predicting is tough. But I am hoping this will get the dialogue started and we could encourage others to dare predict what they think will happen in future.     

1. Broadband growth in India will continue to disappoint by not showing an exponential growth. As against the target of 3 million broadband connections till 2005 end, only 0.18 million were achieved. At end-October, the total number of broadband connections stood at 1.92 million. The target till 2007-end is 9 million and 143 million by end of 2010.

2. WiMax will not be able to solve the last mile challenge; instead we will see a realistic alternative in cellular. Surge in Wi-Fi enabled devices will increase the number of ways people get online.

3. Airline tax cuts will boost travel industry further in 2007. Better taxation model will lower the net cost of flying around in India. This will increase the volume for travel portals. Too many players will lead to lower margins on each transaction.

4. Introductions of DVR in Indian markets with onset of Set Top boxes and DTH - people will no longer have to sit through painful ads to watch their favorite soaps. Set-top boxes will increase the market share of VOD. Find a detail post on various movie distribution channels here .

5. Online maps and local data will become commonplace. People will start using street maps and peer reviews of local destinations. It will lead consumers to online directions and use of map for their travel. This will benefit local search players like mapmyindia, burrp, onyomo. Google has recently started offering street level maps in India. At least a few of the big players like yahoo/msn/google/rediff/indiatimes will start offering local search in India.

6. ATMs everywhere will become a platform for ad placement, movie tickets and quick data shopping. This will cause increased computer literacy of Indian populace. Indian Railways is already extending the use of Internet to assist passenger’s book e-tickets over the ATM.

7. Mobile payment and mobile ticketing will hit mainstream. This will lead the ecommerce players to take mobile interface more seriously.

8. We will find Indians spending more time playing games (mobile, PC and console). Zapak.com will find itself well positioned. We will see players entering the gaming arena.

9. At least some online DVD rental companies and travel portals will realize the importance of offline presence and will tie up with local retailers and local travel agents for convenience of non-Internet savvy population.

10. iLeher will continue building a community of young professionals trying to make sense of the complex web of events relating to Indian Internet industry. Read our about page if you are interested in being a part of this community.

Your comments/suggestions and predictions are most welcome.     

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Entry Filed under: DVD rental, DVR, broadband, ecommerce, madhouse, movies, online rental, online retail, online travel, predictions, search, seventymm, web2.0, wifi, wimax

12 Responses

  1. 1. My 2007 Prediction on iface thoughts said on December 31st, 2006 at 10:23 am

    [...] There have been couple of good prediction posts. In fact more. I could not come up with more than one. [...]

  2. 2. 2006 and 7 at Blogbharti said on December 31st, 2006 at 3:08 pm

    [...] Btw, her ‘first novel The Burden of Foreknowledge will be published by Roli Books in the first quarter of 2006.’ iLeher makes 10 predictions for the year 2007: Broadband growth in India will continue to disappoint by not showing an exponential growth. […] Airline tax cuts will boost travel industry further in 2007. […] Introductions of DVR in Indian markets with onset of Set Top boxes and DTH - people will no longer have to sit through painful ads to watch their favorite soaps. [...]

  3. 3. Santosh said on January 1st, 2007 at 3:53 am

    I can’t be sure how you based prediction #2?

    - Santosh

  4. 4. Vivek Garg said on January 1st, 2007 at 7:44 pm

    Here is my thinking behind #2 .wimax offering reminds me of 3G in europe. Too much too soon. Its the right technology but I am not sure if customers are ready to bring the price point down. IMHO Last mile problem is not really a technology challenge, it is more about economics and fragmentation in existing solutions. There is lot of copper out there but customers are not ready to embrace broadband just yet. To increase the volume in internet connectiviy, we need to cater to the base of pyramid and they dont see the benefit of getting online just yet.

    Cellular on the other hand seems like a bottom up approach. Incremental steps in cellular seems like the right solution to get people connected.

  5. 5. Harish Jain said on January 3rd, 2007 at 11:35 am

    2007 will be inflection point for Indian Internet Business with more verticals mushrooming (Gaming, Travel, Education, Investments, Real Estate, Loans, Social Networking etc). The growth curve will be the much steeper. Most verticals leading the category in 2010 would have started in or before 2007.

  6. 6. funnyguyxxx said on January 3rd, 2007 at 12:39 pm

    No doubt it gaming gonna be big……….This zapak.com i guess have got the game right……………site is pretty col too

  7. 7. Chandra said on January 3rd, 2007 at 12:55 pm

    We will see more vernacular sites coming up and making it easy to access information on the web for the rural masses.
    We will see some of major sites getting redesigned using web standards and starting mobile versions of the sites.

    Nice post!

  8. 8. Madhur said on January 3rd, 2007 at 6:35 pm

    Chandra, agree with you. I think more regional languages will start making their presence felt on the Internet. This is absolutely required if the Internet penetration has to reach anywhere near US or China levels.

  9. 9. vivek garg said on January 3rd, 2007 at 7:35 pm

    from an earlier post on seriously clueless

    http://radventure.blogspot.com/2006/09/nrs-2006-indian-media-pyramid.html

    English daily readership has been stagnant at 21 mn and makes me realize how small the ‘People Like Us’ segment really is.

    The English daily readership is indicative of how far internet in its current form can go, without significant inroads into vernacular content and reduction in bandwidth/PC costs.

  10. 10. iLeher » Online DVD Rental: Behind the curtains with Madhouse- All about Internet industry in India said on January 9th, 2007 at 11:44 pm

    [...] Moat and Barrier to entry: What are the differentiating factors for a DVD rental business? What would prevent your competitor from stealing your customers? -I think exclusive licensing or innovative licensing methods with the publishers and production houses are certainly one of them. Madhouse licensing structure with various publishers includes flat payment per title for unlimited rental for the entire year. They also mention free licensing if they buy the DVD. To reduce this cost they are also thinking about revenue sharing deals. Primary goal here is to reduce capital cost with increased availability of titles. -Low cost and a large scale distribution network. This can become a true moat once companies go national. Madhouse is trying to build their own. -Technology for online recommendation and title queuing algorithm. Getting this system right is very important. Madhouse has tied up with NetKode, the company that manages technology for Hollywoodclicks.com, biggest DVD retailer in Singapore. -Offline presence: madhouse is trying to position itself as movie rental service in their users mind instead of web company. This is why they put emphasis on interacting one to one with their customers. They will also try to achieve this by increasing their offline presence. I would like to remind our readers that one of our predictions for 2007 was that DVD rental companies will come up with offline presence and Madhouse is the first company that is doing this. They have introduced a concept of Movie point. These are existing retail stores that will agree to become DVD return outlets. Slowly they can expand these channels as pickup points. This will create indirect channels at reduced or fixed SAC targeting customers who are not going online. This is important as reverse logistic (returning DVDs) makes a big chunk of operating cost for Madhouse. [...]

  11. 11. Manoj Gursahani said on January 13th, 2007 at 6:56 pm

    On your comment” Too many players will lead to lower margins on each transaction.”.
    I would like to add my viewpoint the margins on domestic airline tickets will be under pressure, but I expect a tremendous growth with excellent margins in the online hotel space , and guys like us who have a online hotel booing engine with a wide coverage and range, expect to benefit from this surging trend.
    Cheers.
    Manoj Gursahani
    Travelmartindia.com

  12. 12. Vivek Garg said on January 13th, 2007 at 10:39 pm

    I agree Manoj . Hotel industry will see good margins with the growth in travel business. It is going to be interesting to see how the revenue sharing will shape up between airlines, hotel and the booking engine. Can you tell us more about the growth you are seeing with Travelmartindia.com. ?

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