India a laggard in Internet revolution

Google chairman Eric Schmidt warned Thursday that India was lagging badly behind in harnessing the power of the Internet because of its failure to invest in high-speed telecom networks. Schmidt, on a trip to New Delhi, highlighted the relatively small proportion of Indians who have online access -- an estimated 150 million out of 1.2 billion, with only about 20 million using high-speed broadband. The solution he proposed appeared simple and has been acknowledged by the government, but roll-out has been slow in a country that is unable to provide basic services such as power or sewage to hundreds of millions of citizens. "Take fibreoptic cables and run them everywhere in the ground that you can imagine... Those fibreoptic cables will last 20, 30, 40 years and scale to infinite bandwidth," he told a Google-organised conference in New Delhi. "The Internet feels here like in America in 1994," he added. While a mobile phone revolution has led to an explosion in handset ownership, with calls at some of the lowest rates in the world, the development of high-speed connections enabling Internet browsing has also been slow. Without investment in Internet infrastructure, Schmidt warned that India risked missing out despite its reputation for producing software and IT services companies centred in the high-tech hub of Bangalore. India "is well behind in the web services model that the rest of the world is adopting", Schmidt told the CNBC-TV18 television channel in an earlier interview. When asked to explain why, he suggested the government had perhaps grown complacent due to the country's earlier success in the high-tech sector. "My guess would be that having been satisfied with the great success of IT, the Indian government and the leadership has made the same mistake that companies do, they rested on their own laurels," he said. The chairman also detailed the challenging regulatory environment in India, which has led to the company being ensnared in a criminal case and caused repeated clashes with the government. Last year, Google was named along with Internet firms including Facebook and Yahoo! in criminal and civil cases in a New Delhi court over allegedly offensive material generated on their platforms by users. Schmidt said there was uncertainty over the liability of Internet service providers and social networks. "You want entrepreneurs to take risks and you don't want them going to jail unless they are really evil," he told the Google Big Tent event. Among other problems in India, Google is the subject of an anti-trust probe by the Competition Commission over its online advertising practices, and has been investigated over possible foreign-exchange transaction violations.