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I 3IAMAI AnnuAl REPORT 2012/13

Chairman’s Message

Vice-Chairman’s Message

1 Public Policy

2 Events

3 Research

4 Business Development

5 Public Communications

6 Governance

7 Annexure

05

08

10

13

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27

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Table of Contents

4 I IAMAI AnnuAl REPORT 2012/13


Dear Friends,

Two years back in May 2011 when I took over as the Chairman of IAMAI, the general body of the asso-ciation suggested that we do not spread ourselves thin on the ground. Instead focus on a few key areasand activities and deliver better results.

With the support of my co-office bearers, Dhruv Shringi and Lakshmi Narasimhan and the encourage-ment of the entire governing council, in the year 2012/13 we have focused on a few key areas that webelieve would bring better recognition to the association and make it stand out as a true representativebody of the digital industry in India.

Let me start by restating the key focus areas that we set out with: a) Proactive Public Policy; b) Strongerand more frequent communications with all stake holders with a view to build a stronger IAMAI brand;c) better quality research and popularizing IAMAI numbers; d) enhanced revenue targets and e) a largemarquee event and awards ceremony.

I am happy to report that in almost all the five areas we have been able to achieve effective results. Hereare some details.

Public Policy: Due to the brisk growth of the industry, especially social media users, Public Policy has been a verybroad and involved area of work this year. It has taken us to as wide and disparate policy makers as theDepartment of Women and Child Welfare, Parliamentary Standing Committees, Planning Commissionand the National Security Council. These and many more new areas unfolded before us in addition to

Chairman’s Message


the regular departments, regulators and other stakeholders who directly impact policy making of ourindustry.

One of the new areas this year where we have been very vocal and proactive, has been the opening offoreign direct investment in consumer e-commerce in goods. This has been an important requirementof the industry and IAMAI, rightly so, was the first organized group to take it up with the relevant pol-icymakers. While no policy pronouncement has yet been made, there is now much talk about openingthis sector to FDI. We are hopeful that an appropriate policy announcement would be made soon. Onthis issue I would like to acknowledge the strong support extended to us of at least one other industryassociation and many individual members and stakeholders.

The amendments to the Indecent Representation of Women’s Act seeks to include electronic and Internetmedium under its remit. The amendment Bill was presented to the Parliament without consulting anyof the industry stakeholders. However, with strong support from some of our members, IAMAI hasbeen able to present its case to the related Parliamentary Standing Committee and argued inter alia that“intermediaries” need to be granted Safe Harbour provisions which is analogous to that provided inthe IT Act and the Copy Right Act.

There also appears to be some positive movement on the IT Act Rules that have been at the centre ofsome debate since 2011. The Parliamentary Committee on Tertiary Legislation has reviewed the criticalissues around the rules and submitted its recommendations. While no government notification has yetbeen issued, it appears that a couple of changes in the section 79 Rules as suggested by IAMAI may getformalized.

We have also been working closely with regulators, industry bodies and others on popularizing digitalpayments, general health and well being of the mobile data industry, promotion of local language onthe web and a host of other issues. You could read about them inside on the chapter on public policy.In the last two years that I have held office “Self Regulation” seems to have been a common word bothwith policy makers as well as industry. You would be aware that IAMAI has been successfully managinga self-regulatory group of SMS aggregators. We are working towards industry consensus on the follow-ing self-regulatory mechanisms: credit recovery process for online publishers, code of conduct for emailmarketers and mobile value added services.

communications:As a longstanding member of IAMAI, I have observed that many a times the good work done by theassociation has gone unnoticed by industry and other stakeholders simply because there was no sus-tained and effective communications. I believe, good work needs to be amplified by strong and sustainedcommunications. To institute this we have started the “Internet Economy Watch” and “Weekly Update”.The first is a monthly e-zine that collects and communicates key industry numbers. The second is aweekly e-zine on the activities of the association. Along with the “Thinking Aloud” magazine, thesetwo, I believe, have strengthened and amplified our communications manifold. Of course, as a resultof our work, we have been able to get considerably better media coverage this year compared with thelast. The details are in a succeeding chapter of this report.

ReseaRch:Better quality research and popularizing IAMAI’s industry numbers have been one of the focus areas ofwork this year. Market and strategic industry research has always been a strong point of the associationand this year we have tried to build further on that foundation. You would be satisfied to note that lastyear our internet user numbers, mobile internet user numbers, ecommerce market size numbers amongmany others have been used for policy making and seems to have found general acceptance for buildingbusiness cases.In addition to market research, we have also published three strategic reports on niche areas. The first


one was on the trends around Smarter Commerce and how companies are updating themselves to en-gage with connected and empowered customers. The second one was on the present state of awareness,use and purpose of use of mobile platform by enterprises to engage with various stakeholders, with IM-IMobile and the third one was with Wipro Technologies on identifying the major drivers and barriersof the Indian MVAS market and provide insights that will help to grow this market.

I must also mention that the strategic report on e-commerce with KMPG started this year is likely to becomplete by May 2013.

Revenue: At the beginning of the year, we had set an enhanced revenue target for the association and I am happyto report that the revenue of the association has gone up by 28 percent compared with 2011/12 and thenet surplus of income over expenditure has risen by 26 percent. Interestingly, for the first time we haveseen a better mix between membership revenues and revenues from other sources. As is the practice,we would be tabling the audited balance sheet at the Annual General Meeting for your perusal.

I am also pleased to inform you that this year several big names from our industry including make-mytrip, Yahoo, Amazon, Adobe and Reliance Infotel have become our members.

maRquee event:It would not be an exaggeration to state that IAMAI is a pioneer in organizing large networking eventsaround the digital industry. This year, we wanted to coalesce our networking and organizational strengthto one marquee event, the India Digital Summit. Those of you who attended the Summit would admitthat it was not only qualitatively different from previous editions but also a major landmark in the digitalcalendar of the year. There were several high profile speakers from the government including ShashiTharoor, Montek Singh Ahluwalia, Nandan Nilekani and Sam Pitroda. It was a collective effort of theorganizing committee, the governing council and the secretariat. I hope that the event grows bigger andbetter in the succeeding years.

The Digital Awards this time was also scaled up, and we did few things differently. The number ofawards was reduced, and the focus was firmly on rewarding innovation and quality. The prominentwinners this time were: Ola Cabs as the best start-up of the year, Naveen Tewari as the Best Mobile Per-son of the Year and Angels of India as the Best Internet Person of the Year.

True to its spirit and mandate, IAMAI has once again made a pioneering effort to organize a large formatand platform agnostic apps developer’s programme. The event held in Hyderabad aimed to connectapps developers with business opportunities. We intend to take this event to other smaller cities in thenext fiscal.

Finally, as I demit office, I would like to welcome the new governing council and new office bearers andI am confident that they will drive the activities of the association with more energy and involvement.

Sincerely, Hitesh Oberoi


Dear Colleagues,

It is my pleasure to share with you some key trends in the industry for 2012/13. Let me begin with threekey positive developments this year.

By far, the most important trend this year has been a flowering of entrepreneurship around internet.Open any business magazine and you would not miss out on the list of so called young entrepreneurs.What is interesting to us in the industry is that most of the new business models have either internet asthe core or as the most important delivery channel. Internet seems to be at the heart of most new con-sumer business models. A related trend is the sheer variety and granularity of businesses based on in-ternet: from selling lingerie to listing of domestic helps and drivers on one side; to mobile based searchfor non-internet users to aggregating budget hotels on the other. Internet based business models nowclearly seem to be touching all aspects of day-to-day life.

The benefits of a thriving environment for digital entrepreneurs to the economy and society are wellknown to be recounted here. However, common feature of most of these new businesses is that theyare based on transactions. This is important since not more than 8-10% of internet users in India aretransacting customers and we need to work towards improving this.

The second trend pertains to the larger question of what is attracting users to the internet? For as longas I can remember, email has been the most popular “application” on internet in India. However, thisyear for the first time, email’s dominance was seriously and perhaps permanently challenged by socialmedia. IAMAI’s first market research on social media shows that 2 out of every 3 internet users usesocial media. In my view, it is just a matter of another 8-12 months when social media will emerge as

Vice Chairman’s Message


the most important driver of internet adoption. Again as in the case of entrepreneurship, the benefits ofsocial media to transparency and freedom of expression are well known. What is less known is thatgiven their large, concentrated and engaged user base; social media acts as a low cost key tool for build-ing consumer businesses, thereby promoting digital entrepreneurship.

The third trend to watch this year was the rapid growth of internet users in smaller towns. Here aresome numbers to substantiate the point. 41% internet users are from towns with less than 5 lakh peopleand 21% users are from towns with less than 2 lakh people. There is also a slow down in the growthrate in the top 8 metros. A corollary trend is the rapid rise of active internet users in rural areas to 31million. It would be correct to assume that the “future” lies in smaller towns and rural areas. I am per-sonally of the view that social media platforms and transaction based consumer services are drivingthis growth.

Of course, there have been some challenges. Most notably, pains of yet another transition in the mobilecontent business and consolidation around inventory based ecommerce in goods. However, withoutbelittling these challenges, I would suggest that these are necessary pains of growing up!

As I end my tenure as one of the three office bearers of the association, I would like to formally appreciatethe help and support of the governing council members and my co-office bearers Hitesh Oberoi andLakshmi Narasimhan. I formally welcome on board the new office bearers and am happy to serve onthe new governing council.

Cheers, Dhruv Shringi


Given the Council’s mandate, public policy this year was handled in a very proactive and granular man-ner. Our work in public policy this year has been around engaging new constituencies and new stake-holders more deeply than in the past.

legislation and Regulations: a) FDI in e-CommerceOne of the most important issues that the association has strongly advocated this year has been the caseof FDI in Consumer Ecommerce in Goods. The association is of the view that FDI is an important elementin the growth and fruition of consumer ecommerce in goods and has advocated a very liberal regime ofFDI in this segment. In our efforts to make a case to the government, IAMAI in consultation with severalcompanies has prepared a short position paper on why FDI is necessary and what shape the policyshould take. This paper has been submitted to relevant policymakers.

While there has been no outcome of our submission in form of a changed policy, the subject no longerseems to be a “taboo” and is being widely talked about in appropriate circles. The IAMAI paper as sub-mitted to the government can be seen in appendix 1.

b) Indecent Representation of Women (prohibition) Bill 2012: In course of the year, amendments to thisexisting Act were made by the government and an amended Bill was presented before the Parliamentand referred to the Standing Committee on Human Resources Development. The amendments soughtto include all “electronic” media under its purview thereby impacting mobile and internet. The amend-ment Bill was presented to the Parliament without consulting any of the industry stakeholders. However,with strong support from our members, IAMAI has been able to present its case to the related Parlia-mentary Standing Committee and argued inter alia that “intermediaries” need to be granted a Safe Har-bour provisions analogous to that provided in the IT Act and the Copy Right Act.

1 Public Policy


c) IT Act: It has been a long standing suggestion ofthe association that many provisions of the IT ActRules pertaining to section 79 were not imple-mentable and/or subject to misinterpretation. Sincethe publication of the Rules in April 2011, IAMAIhas been persistently arguing about the need tochange some of these Rules related to Due Dili-gence Process. This year, there seems to have beensome forward movement on the issue. The Parlia-mentary Committee on Tertiary Legislation re-viewed the position of all stakeholders on theRules of the IT Act and recommended some crucialchanges in the. More importantly, the governmentby a notification on 18 March clarified two of thesubsections of the section 79 Rules that IAMAImembers had been contesting. The notification ap-pears in appendix 2.

d) Copyright Act: You would recall that the CopyRight Act was amended and passed by the Parlia-ment in 2012. Following the enactment of theamendments, IAMAI was directly involved int theRule making process. The Rules pertaining to theCopy Right Act have been since then notified.

f) POCSO (Protection of Children from Sexual Of-fences Act): One of the important Acts affectingthe industry that unfortunately bypassed the atten-tion of the association and many of its memberswas the POCSO. The association was not able toprovide any pre-legislation feedback to the gov-ernment. However, given the importance of theAct to the industry, discussions are on on the levelsof compliance and how best to support the govern-ment in implementing it.

g) ITRs: Under the aegis of ITU which is a G2Gforum for Telecom, the ITRs were sought to bechanged in consultation with member countries.The Government of India had prepared a positionon the ITRs without considering any of the sub-stantial feedback that was given to it by the indus-

try body. One of the most debatable issues that thegovernment of India position supported was theexpansion of ITU to include ICT. Other issues wereovertly controlling content. The government ofIndia position was contested by FICCI, COAI andIAMAI in a common paper that was shared andmade the basis of ITR discussions in Dubai. Postthe meeting in Dubai, the government has commit-ted to holding domestic discussions at length be-fore finalizing its position at international forumsconnected with telecom and ICT.

h) Planning Commission: In January this fiscal, wewere asked by the Deputy Chairman PlanningCommission to make submission from the “inter-net business” point of view on the 12th Plan. Theassociation in right earnest took up his suggestionand made a detailed suggestion. This inter aliacovered development of entrepreneurship, “pushbacks” to the digital industry, possibilities of ecom-merce and a host of other issues relevant to the dig-ital industry. We also suggested that the PlanningCommission set up a “Think Tank” which wouldlook in to the issues affecting the digital industryand make suitable nonbinding recommendations.Our submission to the Planning Commission is inAppendix 3.

i) Mobile Content: The Mobile Content industryseems to be passing through yet another phase oftransition and a very difficult one at that. Imple-mentation of the activation Direction of the Regu-lator has thrown the entire industry and theupstream and downstream industries in aquandary and a solution seems to be evading us.However, the positive development have been: a)the Regulator is keenly aware of the effect of theregulation on the downstream industry notably onmobile content and mobile creative industries andb) all industry stakeholders are on the same pageon the way to resolve the situation.

j) Digital Payments: IAMAI has been at the fore-front of issues and challenges affecting the indus-try and has been working closely with the ReserveBank of India is creating a better environment forthe digital payments industry in India since 2008.This year in addition to making several sugges-tions on operational issues related [some of whichwere reflected in changed RBI guidelines], wewere also happy to share our feedback on the RBIdocument: “Vision Document 2012-2015”. As a


part of our feedback to this path-breaking docu-ment, we suggested practical ways and means ofreducing cash and moving towards a less cashbased system of transaction. The full text of oursubmission is in appendix 4.

In addition the RBI had also approached the asso-ciation for a feedback on a self regulatory mecha-nism for the pre-paid industry and for suggestingways and means of expanding the market in pre-paid systems. After due consultation with mem-bers, we have submitted the association’s views tothe RBI.

goveRnment FoRums:i) IPv6 Forum: IAMAI continued to be a memberof the IPv6 Forum as well as it managing commit-tee. The forum is chaired by the Secretary Depart-ment of Telecommunications and is entrusted withthe promotion of IPv6 adoption in India. ii) National Fiber Optic Network (NOFN) &IAMAI’s involvement: This year, IAMAI was in-vited to the NoFN Advisory Council Chaired bythe IT by the Honourable Minister of Telecommu-nications and IT. This would enable the associationto directly monitor the implementation of NationalFibre Optic project.iii) CRAC: This year IAMAI has been invited to bea member of the Cyber Regulations AdvisoryCommittee. The committee is chaired by the Hon-ourable Minister of Communications and IT and isentrusted with the review, update and changes tothe existing cyber laws and regulations.iv) Working Group on Cyber Security: IAMAI alsobecome a member of the working group on CyberSecurity convened by the National Security Coun-cil Secretariat. The working group is mandated tolook into aspects of cyber security from the per-spective of national security and all leading asso-ciations are members of the group. The workinggroup is chaired by the Deputy National Security

Adviser. v) Equinet: An interesting group has been formedwithin the Department of Electronics and Informa-tion Technology in the transition from Internet toEquinet - a curious idea that marks the possiblemovement to equal access to “governance” of in-ternet, access and use of internet across the globe.We are happy to inform you that IAMAI is a partof this group.

saFe suRFing and Police tRaining:This year, we conducted a campaign with the sup-port of Opera. Approximately, 13500 students werecovered in colleges across Indore, Bhopal, Gwalior,Agra, Kanpur, Lucknow. Safe Surfing sessionswere also conducted for Parents at Delhi,Dehradun, Ludhiana ,Karnal and Jaipur.

Like in previous years, this year too Police Trainingsessions were conducted. Session on generalawareness and security was conducted in RohtakRange, CDTS (Central Detective Training School),Moradabad Police Training, Central IntelligenceHead Quarters Lucknow, ATS Training at Luc-know, and Gurgaon Police.

selF Regulation: In the last two years, Self-Regulation has becomethe operating principle of regulation. We at IAMAIhave been managing self regulation for the last twoyears. This year while the SMS Self RegulationForum worked well, we also toyed with the ideasof self-regulation in credit recovery for publisher,email marketing and mobile content. We must con-fess, in spite of our best efforts and much ground-work, there was no visible outcome in these areas.


Large industry events in the form of conferences, seminars and summits have been a key area of the as-sociation since 2005. Most of the events are annual and now established. However, every year in additionto upgrading the content and adding new perspective, the association also experiments with at leastone new topic. This year we organized two “experimental” events: The Apps Developers’ Meet and theEmail Marketing Summit. The response in both cases was beyond our expectations. The main aim thisyear was to visibly scale up at least one event and set it up as a marquee industry event of the year. IndiaDigital Summit was the one that we were successfully able to scale up this year. Details of the event or-ganized this year are in the following paragraphs.

7th india digital summit:The India Digital Summit has grown to become the flagship annual event of IAMAI, and is one of thelargest annual gatherings of the digital industry in India today. It is a platform and a springboard formobile and online marketers, entrepreneurs, brand owners, media agencies, e-commerce, mobile & in-ternet companies, technology companies, OEMs, entertainment companies, investors, digital paymentcompanies, mobile VAS providers and digital advertisers amongst others to showcase, network, interactand brainstorm on the possibilities of mobile and digital media and devise and enabling policy frame-work in close interaction with government officials. This year, the 7th India Digital Summit was held on16-17 January, 2013, in New Delhi.

The two-day event was attended by more than 800 delegates from across the industry, including CEO’s,CXO’s and CMO’s, brand managers, and several marketing gurus. Building on the theme of “Creatingthe World’s Largest Free Market Digital Economy” the Summit was focused on five tracks: Infrastructure,Regulatory Frameworks, Services & Content, Entrepreneurship/Innovation and Business 3.0.

2 Events


Dr. Montek Singh Ahluwalia, Deputy Chairman ofthe Planning Commission delivered the inauguraladdress. Other prominent government speakers in-cluded Shri R Chandrashekhar, Chairman (TC) &Secretary, Department of Telecommunication, Dr.Shashi Tharoor, Minister of State for HRD, Mr. SamPitroda, Adviser to the Prime Minister on Public In-formation Infrastructure and Innovations & Chair-man, National Innovation Council and Mr. NandanNilekani, Chairman, UIDAI. Key speakers from theindustry included: Ilja Laurs, Founder and Chair-man, GetJar; Lars Boilesen, CEO, Opera Software;Alok Mittal, Managing Director, Canaan India;Anupam Mittal, Founder and CEO, People Group;Deep Kalra, Founder and CEO, Makemytrip; AnkurWarikoo, CEO, Groupon India; Jonathan Bill, SeniorVice President, Business Development and Innova-tion, Vodafone India; Manoj Chugh, Regional Pres-ident, Global Accounts-APJ, EMC; Mukesh Bansal,Founder, Myntra.com; Muralikrishnan B, CountryManager, eBay; Mahesh Murthy, Founder, Pinstormand Co-founder, Seedfund; Neville Taraporewalla,Sr. Director - Emerging Markets - India, Malaysia,Thailand & Korea Advertising & Online, amongothers.

Besides, there were workshops on: “Importance ofCreativity to Digital Advertising”, “Email Market-ing”, “CXOs Closed door discussion on Local Lan-guage – The Game Changer”.

The other highlight was the Start-Up Unconference- A peer to peer, informal sharing of views betweennew entrepreneurs and start-ups of our industry,which was chaired by Mr. Sanjeev Bikhchandani,founder and Executive Vice-Chairman of In-foEdge.

Delivering the inaugural address, Dr. MontekSingh Ahluwalia spoke on the government’s initia-tive towards the development of Internet. Dr.Ahluwalia said: "The focus of the government nowis only geared towards developing infrastructure,like the Optical Fibre Network that is going tohelps in connecting villages through its extensivebandwidth." Further he urged on the industryplayers to lobby for creating awareness among thepeople and the government to help develop appro-priate business models of the industry. He also em-barked on setting up a group to assess the terms ofthe 12th Year Plan and provide feedback to thegovernment to ensure the rightful development

and growth of the mobile and internet industry.Mr. Hitesh Oberoi, CEO, InfoEdge, and Chairman,IAMAI, delivered the welcome address, while MR.Dhruv Shringi, Co-Founder & CEO Yatra, andVice-Chairman, IAMAI, delivered the vote ofthanks.

Shri. R. Chandrashekhar, delivering the key noteaddress, said that the lack of digital information inthe country, which would help to build appropri-ate business models, is the prime concern of thecountry as far as connectivity is concerned. ShriChandrashekhar also emphasised on the need fordeveloping a system where there is an equilibriumand balance in the sharing of revenues between thetelecom service provider (TSP) and the other serv-ice providers to ensure the growth of internet andincreased connectivity. The session was moderatedby Mr. Hitesh Oberoi.

The first plenary session of the day was on 1000digital start-ups a year: How to make it happen?The main focus of the session was on Policy, Inno-vation, Infrastructure, Social Support and Funding.The session was moderated by Mr. SatyanGajwani, CEO, Times Internet. The panellists in-cluded: Mahesh Murthy, Founder, Pinstorm andCo-founder, Seedfund, Manish Vĳ, Founder, VUNNetwork, Pranay Gupta, Joint CEO, Centre for In-novation, Rajesh Sawhney, Founder, GSF Acceler-ator & Superangels, Mukund Mohan, CEO inResidence, Microsoft Startup Accelerator.

Mr. Sawhney said that the question of 1000 Start-Ups or 10,000 Start-Ups (as an indication of healthof the ecosystem,) is not correct. “The question is,


do we have space for innovation in this country,and can we create globally scalable businesses?When you start asking this question, you feel thateverything in this country is broken. IITs are selfobsessed ecosystems busy with themselves. Cor-porates don’t do any buying, there are no acqui-hires. IPOs are almost impossible to build in thiscountry, and then there are issues regarding thosecountries which are profitable, forcing our compa-nies to go overseas. I see the hope in two dimen-sions: our digital economy is flipping over from100 million to a 300 million smartphone economy.We’ve never had that. The second is that we havetalent – we have entrepreneurial, hustler sort of tal-ent, but not geeks and cutting edge technology,and we do not have product and design people.Accelerators can play a part in this and this is a cul-tural issue.” Mukund Mohan pointed towards in-stances of an 11 year old girl who created ajewellery application on the iStore, which had10,000 downloads, and Raghav Sood, who haswritten two books on Android development, say-ing that there are instances of kids bringing valueto the ecosystem, who need to be encouraged.

Manish Vĳ pointed towards the need for largecompanies to play a role, becoming internal incu-bators, providing exits, and also welcoming unsuc-cessful entrepreneurs back into their fold. MaheshMurthy from Seedfund said that there’s a need forsuccess stories, and role models to inspire entre-preneurs. Summing these points up, SatyanGajwani, said that there are four themes – there isa need to create a grassroots cultural validation ofentrepreneurial culture. Second is that there is aninfrastructure component. Third is the financial el-ement, is there enough funding in the market, arethere enough exits? The fourth thing is the govern-ment involvement.

The next session of the day was on “Lowering thebarrier for mobile web - for both operators andusers”. Mr. Peter Panait Lojmand, Senior Vice-President, Opera Software, delivered the key noteaddress, and the session was moderated by Mr.Sanjay Goyal, Chief Executive Officer, ACL Wire-less.

The second plenary session of Day 1 was on Cloud– Leveraging the Cloud for Business Efficiency.The session was moderated by Mr. Manoj Chugh,Regional President, Global Accounts-APJ, EMC.

The panellists included: Mr. Manav Khanna, Sr.Consultant – Enterprise Security, SafeNet Inc, Mr.Jasminder Singh Gulati, Co-founder and Chief Ex-ecutive Officer, Nowfloats, Mr. Ravi Shankar, ChiefExecutive Officer, Nevales Networks, Mr. MandarKulkarni, Vice-President, Solution Engg & Pvt.Cloud Practice, Netmagic, Ms. Balaka Baruah Ag-garwal, Business Evangelist, Amazon Web Serv-ices, Mr. Jaydeep Nargund, Head Services - India,AKAMAI and Mr. Vivek Ravindran, Director-Core& App Platform, Microsoft.

The next highlight of the day was a key note ad-dress by Mr. Nandan Nilekani, Chairman – UIDAI.The session was moderated by Dr. ShubhashisGangopadhyay, Managing Trustee, India Develop-ment Foundation. Mr. Nilekani, said. "The poten-tial of having 60 crore mobile banking linked toAadhaar is what we are targeting in future. Thiswill have ripple effect on e-commerce and variousother mobile transactions," said Mr. Nilekani,.UIDAI expects to enroll 600 million by 2014, andas of today there are 250 million registered people.The unique identity number will be pivotal forKYC and e-KYC with internet penetration on asteady rise.

Delivering the next key note address, Mr. SamPitroda reiterated the need of various platformslike UIDAI for progress towards a developed econ-omy. Mr. Pitroda said, "While technology is ad-vancing, information is not spreading at aproportionate rate. We need to have platforms thatwill help disseminate information though the gov-ernment is spending over Rs 10,000 crore on publicinformation systems." He further added, "The cre-


ation of 4 data centres, the growth of cloud com-puting along-with 1.6 percent empowerment of In-dian's economy by internet will fuel technologygrowth."

The plenary session three of the day was on Socialmedia – Freedom, Moderation or Regulation. Themain discussion points were: Limitation of users,Right to express views, Monitoring and the rightregulation. The session was moderated by Mr.Sunil Abraham, Executive Director, The Centre forInternet and Society. The panellists included: Ra-jesh Kalra, Chief Editor, Times Internet, R. Suku-mar, Managing Editor, Mint and Shivam Vĳ,Kafila.org.

The second day of the 7th India Digital Summitwas started by a keynote Address by Mr. IljaLaurs, Founder and Chairman, GetJar. The topicwas “Future of Apps and their Monetization.”

The highlight of the second was the keynote ad-dress by Dr. Shashi Tharoor, Minister of State forHRD, on Communications Challenges in the Ageof Social Media. The session was moderated by R.Jagannath of FirstPost.

According to Dr. Tharoor, “I am not in favour ofsnuffing social media. Freedom of speech is a fun-damental right and people across the globe usevarious forms of social media to air their views.Unless a post is inflammatory, the governmentshould enable this amazing tool. Unfortunately,there have been instances here in India where so-cial media was used to create communal tensionsand ethnic unrest.”

The next plenary was on Mobile Internet as a gamechanger. The session was moderated by Mr.Jonathan Bill, Senior Vice-President, Business De-velopment and Innovation, Vodafone India. Thepanellists included: Mr. Neeraj Roy, Managing Di-rector & Chief Executive officer, Hungama, Mr.Vĳay Shekhar Sharma, Founder & Chief ExecutiveOfficer, One97, Mr. Vishal Maheshwari, Senior Di-rector & Head, Sales, Yahoo India, Mr. UmeshKulkarni, Founder, Newshunt and Mr. Anil Math-ews, Founder & Chief Executive Officer, AdNear.

Plenary five was the star-studded session on e-Commerce 2.0: The Emerging Trends. The sessionwas moderated by Mr. Avnish Bajaj of Matrix Part-ners. The panellists included: Mr. Alok Mittal,Managing Director, Canaan Partners India, Mr.Sachin Bansal, Co-founder & CEO, Flipkart, Mr.Sundeep Malhotra, Chief Executive Officer, Home-Shop18, Mr. Muralikrishnan B, Country Manager,eBay, Mr. Mukesh Bansal, Founder, Myntra.comand Mr. Ankur Warikoo, Chief Executive Officer,Groupon India.

Plenary session six was on: Marketers Viewpoint– Online and Mobile Marketing. The session wasmoderated by Mr. Upen Rai, Chief Operating Offi-cer and Executive Director, AntFarm. The panel-lists included: Mr. Sanjay Tripathy, EVP - HeadMarketing, Products and Direct Channels - HDFCLife, Mr. Manish Kalra, Chief Marketing Officer,MakeMyTrip, Mr. Vinay Bhatia, Customer CareAssociate and VP - Marketing and Loyalty, Shop-pers Stop, Mr. Samil Malhotra, Vice-PresidentSales and Marketing, The Lalit Suri HospitalityGroup, and Mr. Manu Kumar Jain, Co-founder &Managing Director, Jabong.


The focus of the session was to reveal the real storyand what marketers say about digital media andits tools. The sole intention is to hear from the mar-keters about their experience of marketing on dig-ital platforms and what are their expectations fromthe medium.

The last session of day 2 – the Plenary Session ti-tled: Interaction: Attracting and retaining talent forDigital Industry, was a major highlight of the eventwith industry stalwarts such as Mr SanjeevBikhchandani, Mr Deep Kalra, Mr Anupam Mittal,Mr Dinesh Agarwal and Mr Neville Taraporewallainteracted face to face with 8 students.

3rd India Digital Awards: IAMAI announced thewinners of the 3rd India Digital Awards coincidingwith 7th India Digital Summit, 2013. There weremore than 800 entries for 6 Categories and 31 sub-categories for the internet and mobile value addedservices industry. The categories were Digital Ad-vertising; Website; Digital Social and EconomicEmpowerment; Mobile VAS; Digital Payment andSpecial Awards. While Angels of India wasawarded the Internet Professional of the Year,Naveen Tewari of InMobi was declared as the BestMobile Person of the Year. Myntra.com was ad-judged the best e-commerce site while goose-bumpspickles.com won the Jury Special Mentionprize for best e-commerce website.

The jury comprised of eminent industry represen-tatives from across the spectrum such as Mr. AbdulKhan - Sr. Vice President & National Head – Busi-ness Marketing Group, Tata Teleservices Ltd; Mr.Alok Mittal, Managing Director, Cannan Partners;Mr. Sachin Bansal, CEO & Co-Founder,Flipkart.com; Mr. Dinesh Agarwal, Founder &CEO, IndiaMART; Mr. Hitesh Oberoi, MD, InfoEdge (India) Ltd; Mr. Manish Vĳ, Founder, VunNetwork; Ms Mariam Mathew, COO, ManoramaOnline; Mr. Sanjay Tripathy, EVP - Head Market-ing, Products and Direct Channels, HDFC Life; Mr.Sanjay Goyal, CEO, ACL Wireless; Mr. SatyanGajwani, CEO, Times Internet Ltd; Mr. VĳayShekhar Sharma, Founder, One97 Communica-tions; Ms. Virginia Sharma, VP, Marketing andCommunications, IBM; Mr. Vishwadeep Bajaj,CEO, Valuefirst.

maRketing conclaveIAMAI’s 8th Marketing Conclave witnessed a con-

vergence of experts from the domains of internet,marketing and mobile marketing industry with aview to identify and address the questions in thedigital marketing space currently and the under-standing of what makes a correct digital mix. Thesessions were around self explanatory themes like:‘Social Media Marketing: Daag Acche Hain!’; ‘Mo-bile Advertising: Isko Laga Dala to Life Jinhga LaLa!’; Video Marketing: Papa Ki Kara, petrolKhatam hi Nahin Honda’; ‘Taking India to theWorld: Because I am worth it’ and ‘Power of Digi-tal: Taste The Thunder’

Over 350 plus representatives of companies likeLIC, DraftFCB Ulka, Birla Sun Life, Volkswagen,Travelocity, Reliance, Group M, O& M, L & T Gen-eral Insurance, Mahindra and Asian Paints amongothers attended the event.

4th national conFeRence on digital commeRceThe 4th National Conference on Digital Commercewas held on April 25-26in Mumbai. The conferencewas attended by over 400 representatives from var-ious verticals that included E-commerce, BFSI,Brands, Digital Payments and other stakeholdersin the eco system.

Mr. Himanshu Singh, Chairman & Managing Di-rector Travelocity, who also chairs the IAMAI Dig-ital Commerce Committee, delivered the welcomeaddress. In his address, Mr. Singh highlighted howthe common industry issues will be best resolvedonly if the industry as a whole come together andhave a common vision and strategy to overcomethem. These will also enable to move the govern-ment to get the right kind of support to ease thecurrent ecosystem.


Mr Muralikrishnan B from eBay talked about theeCommerce & livelihood and impact on peoplewho are trying to make a living. He touched on theopportunity brought in by the rapidly growingeCommerce industry which is hereby creating arich & vibrant ecosystem.

Power Panel 1 on “Bharat Online: eCommerce be-yond Metros” was moderated by Mr. KashyapVadapalli – eBay, and discussed issues and chal-lenges relating to reaching out to tier 2 & tier 3 seg-ment of people. The session revealed someinteresting facts on how rural India has con-tributed the growth of eCommerce. Other panel-lists in this session were Pradeep Malu -iStree, RaviVora - Flipkart, Harinder Takhar – PayTm, JibyThomas - Quikr and Ashutosh Lawania – Myntra.

Other panel discussions were on “Sourcing inRight”; Cash or Cashless?: Accelerator for nextlevel of growth”; “Logistics: Complex & DiverseDistribution Model”; “Marketing & Customer Ac-quisition: Getting it Right”; “Luxury Online -iStreet before High Street”; “Finance Online”; “Under-invested or Over-invested Investors View”.The other highlight was the debate on Deal & De-livery:

The session was moderated by Muralikrishnan Band others joining him were Ashish Kashyap –IBIBO, Guarav Kachru - DealsAndYou.com andRajesh Nahaar – Cbazaar.

Financial inclusion & digital PaymentThe 5th Financial Inclusion and Digital PaymentConference provided a forum to interact with in-dustry professionals to know where does the fi-nancial world meets the digital.

Speaking at the Inaugural Session, Shri G Padman-abhan, ED, RBI said that RBI proactively encour-ages Electronic Payment System for a cashlesssociety, which is efficient, safe, authorised and in-teroperable. “We need to use innovative solutionsand improvised fixes not only for competitive ad-vantage but our future economical development issustainable and inclusive,”

tRavel and touRism conFeRence 2012The 4th Travel and Tourism summit was held inJune 8 in New Delhi, and witnessed participationof around 100 companies representing over 350delegates. In his welcome address, Mr. HimanshuSingh Chairman & Managing Director Travelocityand Chairperson of the IAMAI Digital CommerceCommittee talked about the strategic vision ofTravel Industry.

Marco Gorin, Chief Commercial Officer, InterglobeTechnology, Sanjoy Pasricha - The Leela Palaces,Hotels & Resorts, Devdutta Banerjee - StarwoodHotels & Resorts, Samil Malhotra - The Lalit SuriGroup, Tarun Lakhanpal - Lemontree Hotels andSajid Mahmood - Sarovar Hotels, Subhash Goyal -STIC Travel Group, Amitabh Pandey - ThomasCook India, Stephen King - Virgin Atlantic,Urrshila Kerkar - Cox & Kings India Niraj Seth,Ashish Kashyap – goibibo were among the speak-ers at this conference.

mobile innovation conFeRenceThe conference was held on August 8 in Mumbai. In his key note address, Mr. Vishwanath Alluri,from IMImobile mentioned how his companyworks at the ground level and follows eachchange, behaviour and trend that can be adapted


for business growth. Mr. Himanshu Kapania, IdeaCellular Services highlighted how integration ofproduct, platform, technology, applications andmobile services will be amongst the biggest chal-lenges that the telecom industry will potentiallyface.

mobile maRketing conFeRenceMobile Marketing Conference 2012, held on Octo-ber 10 in Mumbai, focussed on how to leveragemobile to reach out to the right audience. The day-long conference was power packed by four ple-nary sessions and a session on Case StudyPresentation. The conference was attended by over200 delegates.

email maRketing summitThe E-mail Marketing Summit was organized byIAMAI and Juvlon, on March 15 2013, in Mumbai.“Email Marketing has been and is still the most re-turn oriented direct marketing medium. Marketersin India have warmed up to email marketing rap-idly,” said Mr. Naresh Bhagtani, Managing Direc-tor, Juvlon. Mr. Bhagtani was of the opinion thatwhile it will be naive to ignore this medium; thefact that over 350 delegates have attended the Sum-mit is a testimony of the fact that email marketingis here to stay and will continue to grow.

Mr. Amit Chaudhary, Co-founder & COO,Lenskart, Ms Snehi Jha Mehta, Head Marketing,ICICI Prudential AMC, Mr. Vivek Bhargava, CEO,iProspectCommunicate2 were among the speakersat the Summit.


Market research has been one of the key activities of the association. As in previous two years, industrynumbers on key verticals were published by the association. This year for the first time IAMAI in asso-ciation with IMRB published a paper on social media which was very well-received by the stakeholders.In addition, we are happy to report that some of the key industry numbers such as the number of urbanand rural internet users, mobile internet users, size of the mobile data, market among others have beenquoted by policy makers and found mention in policy documents. Besides three strategic and cus-tomized research papers were published: “Mobile Platform Adoption by Enterprises” with IMIMobile,Smarter Commerce with IBM and IAMAI-IBM and Beyond the Tip of the Iceberg, with Wipro.

1) digital adveRtising RePoRt: Digital Adver-tising is expected to reach INR 4,391 crores by March2013. It was expected to reach INR 3,535 crores byDec’12. In March’12, the market was pegged at INR2,851 crores. These were the major findings of the annualDigital Advertising report jointly published by IAMAI& IMRB.

2) mobile vas in india RePoRt: The Mobile VASmarket is growing at rate of 28 percent and reached INR26,000 crores by the end of 2012. According to the latestIAMAI-IMRB report on Mobile VAS in India, the MVASmarket is estimated to reach INR 33, 280 crore by end of2013.

3 Research


3) online enteRtainment RePoRt: On-line entertainment has become one of the top pur-poses people access the internet for in both Urbanand Rural India. There are 31.7 million OnlineGamers and 20.9 million Video / Music viewers inIndia. In the Top 8 Metros, there are 16.6 millionmobile entertainment users. Among these, 7.1 mil-lion users access music / videos on their mobilephones and 14.6 million users play games on theirmobile phones. These were the key finding of theOnline Entertainment Report by IAMAI & IMRB.

4) i-cube RuRal: Rural India has 38 millionclaimed internet users and 31 million active inter-net users, according to the I-Cube Report on Inter-net in Rural India by IAMAI & IMRB. Thepenetration of claimed internet users in rural Indiahas grown from 2.6 percent in 2010 to 4.6 percentin 2012.. On the other hand, the penetration of ac-tive internet users has grown from 2.13 percent in2010 to 3.7 percent in 2012.

According to the report, the number of claimed in-ternet users in rural India is expected to reach 45million by December 2012.

5) i-cube uRban: Internet users in India to shootto 150 million people by December 2012, accordingto the i-Cube report By IAMAI and IMRB. The re-port finds that the active users during the same pe-riod would reach 111 million.

6) veRnaculaR RePoRt: There are 45 millionusers who access content on the Internet in theirlocal language as of December 2012, while thereare 122 million active internet users in India, ac-cording to the Vernacular Report by IAMAI &IMRB. However, as per 2001 census of the Govern-ment of India, there are 769 million people whospeak the top ten local languages in India. Thisshows that there is large potential and headroomfor growth of local language content in India.

The report finds that 64 percent of the Rural Inter-net users have used the internet in the local lan-guage compared to only 25 percent of UrbanInternet Users.

7) mobile inteRnet RePoRt: India is ex-pected to have close to 165 million mobile Internetusers by March 2015, up from 87.1 million in De-cember 2012 as more people are accessing the webthrough mobile devices and dongles, according tothe report by IAMAI and IMRB.

The report finds that the number of mobile Inter-net users increased to 87.1 million by December2012 from 78.7 million users in October 2012.

8) social media in india: The number of so-cial media users in Urban India reached 62 millionby December 2012, and it is estimated to reach 66million by June 2013, according to a report on So-cial Media in India, by IAMAI & IMRB. Accordingto the report, about 74 percent of all Active Internetusers in Urban India use social media.

The report also finds that of the social media users,34 percent are from the top 8 metros while 35 per-cent of the total users are from small towns of pop-ulation up to 5 lakh.

IAMAI AnnuAl REPORT 2012/1322 I

custom ReseaRch: 1) Mobile Platform Adoption by Enterprises: Ajoint study by IAMAI and IMI Mobile on “MobilePlatform Adoption by Enterprises” benchmarksthe present state of awareness, use and purpose ofuse of mobile platform by enterprises to engagewith various stakeholders. The report consists ofdetailed sectoral analysis of the state of mobileadoption in India across various geographies.

2) Smarter Commerce: The joint research byIAMAI & IBM starts with the premise that SmarterCommerce is not E-Commerce alone. Rather, it isan approach that uses disruptive technology tohelp companies better integrate and more effec-tively manage their value chain. The findings ofthe study have clearly indicated that key chal-lenges faced by businesses today are: Demandingand empowered customers, intense competition,demand-supply mismatch, and emerging channelsfor customer engagement. In view of this, organi-zations need to ensure internal processes arestreamlined for greater efficiency across depart-ments and invest in initiatives in the area of tech-nology and analytics.

3) “Future Thought of Business (FTOB) MVAS”:Wipro and IAMAI conducted an in-depth evalua-tion of over 450 consumers and providers of MVASin India to identify the major drivers and barriersof the Indian MVAS market and provide insightsthat will help to grow this market. The research fo-cused on the mEducation, mEntertainment, mFi-nance and mHealth application areas and foundthat there is large market demand from consumersfor sophisticated mobile services in India that havethe potential to improve the overall quality of liv-ing.


Although IAMAI is not mandated to directly undertake business development for any specificmember, the association in partnership with a member does promote specific business segmentsthrough stakeholders’ meets and smaller workshops. The highlight of this year’s work was an off-site in Srinagar with 25 Chief Marketing Officers of well-known brands and roundtables on mobilemarketing.

The 4th Mobile Marketing Roundtable: IAMAI along with Velti organised the 4th Mobile Market-ing Roundtable on July 4, 2012 in Mumbai. The Theme of the roundtable was - Leveraging thePower of Mobile: Building Customer Relationships & Loyalty. Mr. Jay Seth, Senior Vice PresidentVelti and Mr. Alex Moukas, Chief Executive Officer of Velti and Mr. Vaibhav Joshi Head Loyalty& Analytics, Shoppers Stop were the speakers.

CMO Power Series, Mumbai: IAMAI in association with LinkedIn organised a tri- series closeddoor CMO Meet in Mumbai, Delhi and Bangalore to bring together marketing leaders of variousbrands on one platform to understand how brands and marketers consider social media and itusage in the current ever changing face of internet. The tri – city roundtable commenced withMumbai on 28 February 2013. The meet in Mumbai was attended by Ajay Kakar, Aditya Birla Fi-nancial Services; Yateesh Srivastava, Aegon Religare; Sanjay Tripathy, HDFC life; Vipul Mishra,Tata Nano; Ashish Sahni, Tata Motors; Reema Kundnani, Oberoi Realty; Vivek Mendosa, Lawrenceand Mayo; Amit Sharma, Tata Communications; Rajiv Prabhkar, Sharekhan; Aneesh Khanna, IDBIFederal; Rajesh Kashid, Apollo Health; Srishti Balani, Tata Communications and Clarinda D’souza,L&T Finance Holdings. The roundtable discussion proved to be very insightful and every CMOtook something back from the discussion.

4 Business Development


CMO Power Series, Delhi: With the first meet inBangalore a success, the 2nd was held in Delhion 28th September 2012, which was equallyeventful and brainstorming.

The meet was attended by Najib Khan, Airtel;Alok Bharadwaj, Canon; Deepak Shetty, MoserBaer; Rajesh Kumar, SAP; Vineet Trakoo, UshaInternational; Amol Dhillon, Woodland;Shanker Sareen, Cisco; Deepa Sayal, ADG On-line; Anand Hingne, Whirlpool India; NirajSeth, Intuit; Piyush Kumar, Swatch; Ashok Sri-vastava, Luxor.

The discussion took off emphasising on howbeing in a digital era today and man by naturebeing social, Social Media have assumed a vitalrole to play. The group largely agreed that socialmedia not only helps with the customer contactdetails but it also helps to know the customerwell in respect of their behaviour and opinion.Due to its interactive and opinion based formatit is one of the best way to know what an in-formed and cautious customer needs.

The participants discussed how the role of in-fluencers in brand building depends on positivebrand equity created by the users. Social mediaalso helps expand reach of word-of-mouth ofany individual. A brand should use social mediato understand consumer insights, and modifyand improve the product, thereby recreating thebrand equity on the positive side. Building rela-tionships with consumers on social network canhelp achieve loyalty, preference and advocacy.CMO Power Series, Bangalore: IAMAI in asso-ciation with LinkedIn hosted a tri-series of CMOMeets in 3 different cities to understand whatbrands and marketers consider social media to

use for. The third meet of this series which washeld on 14 March 2013 in Bangalore was at-tended by Mr. Ramanan Regunathan, Lenovo;Mr. S Rajendran, Acer; Mr. Shrikant Latkar, InMobi; Mr. Jesu Dominic, Brigade; Mr. PrakashDadlani, 3M; Mr. Dev Dulal Das, IBM , Mr.Rahul Koul, Wipro Technologies, Mr. VinayGupta, Via.com, Mr. Dev Chavan, ING Life, Mr.Ambuj Chandana, ING Vysya Bank. Session waschaired and presented by AL Jagannath- Direc-tor, Trade Marketing, LinkedIn India andOlivier Legrand, Head of LinkedIn MarketingSolutions, Asia Pacific & Japan.

Agency CEO Strategic Meet Delhi: IAMAI in as-sociation with LinkedIn hosted an AgencyCEOs Strategic meet with the aim to engage anddebate to come up with interesting questionsand challenges that CEOs of successful agenciesare facing today. The closed-door meet washosted in Delhi on 13 March 2013. The sessionwas chaired and presented by AL Jagannath- Di-rector, Trade Marketing, LinkedIn India andOlivier Legrand, Head of LinkedIn MarketingSolutions, Asia Pacific & Japan. CEOs that par-ticipated in the meet were Mr. Glen Ireland,Dentsu Digital; Mr. Deepa Sayal, ADG Online;Mr. Pranav Kumar, Bite Communications; Mr.Santosh Kumar, Bluelemon Technologies; MsSushant Mishra, Starcom Media ;Mr. AmitDuggal, Madison, Mr. Girish Mahajan, Webti-tude; Mr Daman Soni, PK Online Ventures andMr. Karthik Nagarajan, GroupM.

Agency CEO Strategic Meet Mumbai: IAMAIwith LinkedIn organised an Open House dis-cussion on “Potential of Social Media” on No-


vember 22. Closed group of CEOs of leading ad-vertising agencies were invited for this meet.The attendee included CEO participation fromGroupM, Interactive Avenues, FCB Ulka, Com-municate2, AD2C, Social Wavelength, SokratiMaxus and Isobar.

Agency Planners Meet Mumbai: IAMAI withLinkedIn organised the Agency Planners Meeton 15 February 2013. The session was attendedby 50 participants from companies like Asym-metrique, DraftFC Ulka, FoxyMoron, Group M,Grey Digital, Indigo Consulting, Interactive Av-enues, Isobar among others.

5th Mobile Marketing Roundtable: The 5th Mo-bile Marketing Roundtable was held in NewDelhi on 12 October 2012. The expert panel dis-cussed on rising rich media and its use intoday’s advertising campaign. The Panelists in-cluded: The key presentation was made by Mr.Jordi Duran I Batidor, Director of Mobile Tech-nology, Appsnack.

Email Marketing Roundtable: The 5th EmailMarketing Roundtable was held in partnershipwith Juvlon to make people aware of how a sim-ple email can help in promotion and generatingleads. It was organized in New Delhi, on the 13July. Delegates were invited from various sec-tors – Hotels, Publishers, Media Agencies etc.

Webinars: In last financial year, IAMAI held three success-ful Webinars with Juvlon and one with IBM. Theresponse for all the webinars was very positive.

Digital Marketing Conversation – CMO Offsite:

IAMAI organised an offsite for Chief MarketingOfficers (CMOs) in Srinagar between 15 and 18June. The aim was also to deliberate on the topfive action items that would drive the nextphase of growth. The top five issues discussedat the offsite were:1) Metrics and Measurement2) Strategies of Mobile Marketing3) Content Driven Advertising4) Digital Fitness5) Agenda for Growth

Marketing heads from Tata Teleservices, Gitan-jali Exports, Aegon Religare Life Insurance, RedBull, Shoppers Stop, Skoda Auto, HDFC Life,Godrej Interio, NIIT, Kaya Skin, Allen Solly,Marico, Philips, Acer India, Ashok Leyland,HDFC Bank, Platinum Guild, Rajasthan Royals,Lemon Tree Hotel, The Lalit Hotel, J.K.Ansell,Acer, L&T Insurance, Reliance Industries,Aditya Birla Group, CavinKare were part of themeet.

AppFest 2012: Realising the great potential ofthe apps industry IAMAI organised the firstAppFest - the largest application developmentfestival in India from December 13-15 in Hyder-abad. AppFest 2012 sought to foster an environ-ment where businesses, developers, platformsand networks are incentivized for their efforts.

Spread over three days, the AppFest 2012 hadthree tracks - Talkathon, Hackathon and Chal-lengathon. Developers were able to share ideason technology, revenue models and current op-portunities with each other. The event also pro-vided an opportunity to participants to competeand create on spot customised solutions forbrands present and earn immediate commercialopportunity to work with them on larger proj-ects. Besides, Industry experts also spoke on arange of topics, sharing their first hand experi-ence and case studies to showcase how appshave and can change the world.

At the Hackathon, developers from across thecountry got a platform to showcase their codingskills. A coding marathon running over 24 hrs tocreate an app, based on an idea by a fellow partic-ipant, was the main action at Hackathon. The otherhighlight at AppFest 2012 was Challengathon. Itoffered the right platform and opportunity to those


wanting to create apps for big brands and alsoshowcase their coding talent. Challengathon wasa test of one’s technical and creative skills as cor-porates gave up challenges to develop an app asper their business requisite.

The highlight of this challenge was a chance forthe winning team to win a commercial contractfrom the company throwing in the challenge tocommercially build an App for them. More than600 apps developers took part in AppFest 2012.The real action began to Day 2 of the three-dayevent, with Hackathon and Challengathon com-

petitions running in parallel. Chief Guest ShriSanjay Jaju, Secretary, Department of Informa-tion and Communications, Government ofAndhra Pradesh, officially declared the compe-titions ‘Open’.

The 24-hour Hackathon began at 11:00 AM onDay 2 and ended on Day 3, when the clock stuck11:00 AM. At the Challengathon companiessuch as Ashok Leyland, J.K.Ansell, Marico, Gi-tanjali, Allen Solly, HDFC Life, Maakan.com,challenged those taking part in Challengathonto develop apps with certain specifications laiddown by the companies.

Digital Marketing Training Courses: IAMAIcontinued its efforts in training students andprofessionals on Digital Marketing. In order toreach larger number of people across India, thisyear, IAMAI joined hands with Edukart to de-liver digital marketing course module online.With support of existing and new partnerships,a total of approx. 800 students were certified byIAMAI in Digital Marketing. Through Edukartalone, we were able to reach out to more than500 students.

IAMAI also signed a Memorandum of Under-standing (MoU) with the Digital MarketingTraining Institute to develop a certified training

program designed to prepare individuals/pro-fessionals to meet the growing demands of pro-fessionals in the field of digital media industry.


One of the key aims this year was to have a strong and continuous communication with all stakehold-ers. The Council members were of the view that there was a need to amplify the good work that theassociation was doing by sustained communications with stakeholders. We also aimed to get bettercoverage in the print medium and to get better coverage of our events through the electronic media.

communications with stakeholdeRs:Social Media: For better communications with stakeholders on of the key efforts this year was betterand regular presence in social media. We have been able to establish a good presence in some of theleading social networking sites communicating to a group of more than 5,000 almost daily. The socialmedia is primarily used to broadcast industry relevant issues.

Weekly Newsletter: “The Week that Was” is a weekly e-newsletter mailed to a database of 80,000. Thee-newsletter is a weekly update of the work undertaken by the association. This year, we have intro-duced two new sections to the newsletter: Member updates and Industry News, which have been wellreceived.

Internet Economy Watch: IAMAI last year initiated a monthly re-port, titled ‘Internet Economy Watch’ with an aim to keep a closeeye on the industry metrics as also the consumer behaviour. Thisis distributed every month to the press, and there has been widecoverage of the data that is released.

Thinking Aloud: “Thinking Aloud” is a RNI registered the printand online monthly magazine. The magazine provides a very effec-tive platform to members and industry expert to share theirthoughts on policy, business models, market outlook etc.

This year, the focus of the magazine has been to include more arti-cles on public policy pertaining to areas such as VAS, Social Media,Local Language, Apps Economy, Digital Marketing. There weretwo special editions – editions that were based on interviews with CMOs who attended the CMO offsitein Srinagar.

5 Public Communications


Changes have been brought in consciously to in-clude more articles, interviews and viewpoints ofindustry leaders who can in turn get more andmore people to experiment with the online andmobile medium. The magazine serves as a plat-form that caters to group of people who are yet toadopt this medium for their personal and businessneeds.

At present the print version of the magazinereaches out to policy makers, embassies, industryassociations among others. The online versionreaches out to about 2 lakh people.

media coveRage:As mentioned, the focus for this year was to im-prove IAMAI coverage in the print media. IAMAImarket research and internet numbers have en-joyed a wide coverage in media over the years.This year we attempted engage the print media onpolicy related matters and in popularizing indus-try numbers are collated in the “Internet Economy


Watch”. To reach out to a much larger “audience”for our events we also entered into a partnershipwith a popular television channel ET Now. Theevents covered were: 4th National Conference onDigital Commerce; 4th Travel & Tourism Summit;7th India Digital Summit, 5th Financial Inclusion& Digital Payment Conference and Mobile Inno-vation Summit.

The table below gives the annual media coveragein print, electronic and online media.

2011-12

Print 190

Electronic 4

Online 312

Total 506

2012-13

Print 161

Electronic 0

Online 521

Total 682


6 Governance 2012-13

Executive Council

Governing Council

Hitesh Oberoi

Chairman, Info Edge (India) ltd

Hitesh Oberoi

Info Edge (India) ltd

Chairman

Dhruv Shringi

Vice Chairman, Yatra Online

Dhruv Shringi

Yatra Online

Vice Chairman

lakshmi narasimhan

Treasurer and Head of Finance, Web18

Amit Garg

HT Media ltd

Head-Internet & Mobile

Rishi Khiani

Times Internet ltd

Chief Executive Officer

Sanjay Trehan

Microsoft Corporation

India Pvt ltd

Head - MSn India

Jasmeet Gandhi

nokia India

Head - Services

marketing

lakshmi narasimhan

Web18

Chief Executive

Officer

Sn Bhaduri

Thomson Reuters

Country Manager,

Consumer media

Prashant Mehta

Komli Media India Pvt ltd

Chief Executive Officer

Mariam Mathew

Manorama Online

Chief Operating Officer

Rajan Anandan

Google India

MD & VP,

Sales and Operation

B Muralikrishnan

eBay India

Country Manager

nalin Shinghal

IRCTC

Director- Tourism

& Marketing

Hari V Krishnan

linkedin

Country Manager


Committees:

government Relations: Chairman: Mr. S Ramkrishna (Nokia) Co-Chairman: Rajendra Punde (eBay)

mvas:Chairman: Vĳay Shekhar Sharma (One97)

digital advertisingChairman: Rajan Srinivasan (Network 18)Co-Chairman: Amardeep Singh (Interactive av-enues)

digital commerce:Chairman: Himanshu Singh (Travelocity)

digital PaymentsChairman: Naveen Surya (Itz Cash)Co-Chairman: Viswas Patel (CCAvenues)

working groups:local language Convener: Mariam Mathew (Malaya Manorama)

Membership Trends 2012-13:

0Members

Dropped

new

Members

Total

Members

20

2329

125

40

60

80

100

120

140


This is a short position paper to arguefor allowing FDI in ecommerce in goodsand comprises the following sections:What constitutes ecommerce in goods? What is its relevance for social and eco-nomic growth? Why is FDI necessary and forthcomingin this sector? What should the contours of a FDIregime in ecommerce be?

definition of consumer ecommerce ingoods:Without going into technical details, itcan be suggested that consumer ecom-merce is a way of selling goods throughthe medium of Internet and mobile. Itentails the following core features: a)goods are displayed on a website whichacts as the primary or the only shopfront for connecting with customers.The customers can make a selection ofgoods on the website and place anorder through the website. Ecommerceon goods does not entail having physi-cal stores, or television screens or radiochannels as the primary or only frontend for providing access to customers –the front end is provided only throughthe medium of Internet and Mobile.

The EU definition for Ecommerce“Ecommerce is based on the electronicprocessing and transmission of data. Itencompasses many diverse activities in-cluding electronic trading of goods andservices, on-line delivery of digital con-tent, electronic fund transfer, electronicshare trading, publicprocurement.”[EU(97)/157]

Thus understood, ecommerce in goodshas an exclusive definition; meaningthat it does not only explain what itmeans, it also explains what it doesNOT entail. Such an exclusive defini-tion is useful in formulating specificpolicies for ecommerce in goods againstthe backdrop of the need to promoteand encourage this new mode of buy-ing and selling goods.

benefits:Ecommerce in goods, by fundamentallychanging the way goods are sold andpurchased, lead to the following bene-

fits to the overall economy:a new distribution system: key to inclu-siveness One of the key benefits of ecommerce ingoods in our view is the setting up of an effi-cient and broad-based distribution network. The telecom industry and the FMCG haveshown that large and deeply penetrated dis-tribution networks are key to successful re-tailing.

The current system of distribution of goods isnot only woefully inadequate, it is inefficientand unevenly distributed and not aimed to-wards consumer benefit. Even the most suc-cessful distribution networks of FMCG andTelcos work in silos.

We are of the view that promotion of ecom-merce in goods on a large scale would lead toa more equitable, transparent and efficientdistribution network for goods. This, in turn,would lead to creating a distribution infra-structure that is capable to more equitable

distribution of goods.

catalyst to manufacturing:It is generally well known that the industryand government have taken major steps topromote manufacturing in the country for thelast 6 years. Incentives have taken manyforms: from encouragement of SMEs to re-duction in taxes. However, manufacturingdoes not seem to have grown the way it wasexpected.

While there are several complicated reasonsfor the slow off-take of manufacturing; in ourview, an inadequate and shallow distributionnetwork is one of the key impediments to thegrowth of manufacturing. A deeply pene-trated and efficient distribution system cancater to real and latent demand in the mostremote parts for the most niche product,thereby providing a strong backbone to man-ufacturing.

We are of the view that traditional distribu-tion channels will not be able to help modernmanufacturing grow. An alternative in theform of ecommerce distribution network isnecessary to take manufacturing to newdepths.

boost to services:While a new way of distribution is expectedto have a positive impact on manufacturing,many of the services industry are direct bene-ficiaries of ecommerce in goods. To give oneexample, 6 to 8 per cent of total value ofecommerce in goods goes to the civil aviationindustry on account of transportation and lo-gistics. With the growth of ecommerce in

goods an ailing industry like civil aviation issure to get a boost. Ecommerce in goods isalso likely to promote and support large scaleservices like digital payments leading tomuch more efficiency and transparency intransactions. Finally, through better utiliza-tion of data and other non-voice services,ecommerce in goods will have a direct bear-ing on the telecom industry as well.

employment generation: Internet and ecommerce have long been rec-ognized as having an important impact onwork, workers, and the workplace. It can con-tribute to better employment opportunitiesin India both through improved labour facili-tation and direct employment. It is estimatedthat the nascent e-commerce industry todaydirectly employs around 40,000 to 50,000 peo-ple in the country. One can fairly assume thatas this industry grows, both direct and indi-rect employment will grow manifold.

From the human resources point of viewwhat is also important is that the ecommercecompanies also act as skills development cen-tres for cutting edge skills connected withtechnology, inventory management, customerservicing etc.

Hands-on training and work at an ecom-merce company helps an employee developimportant skills in retaining.

Finally, an ecommerce company, like anyother consumer business, is not just forhighly skilled and qualified workers. It em-ployees all types of people from the engineerto the courier and provides employment to across section of skilled and semi-skilled work-

ers.

investments:As a new method of connecting withand distributing goods to consumers;and or providing a distribution networkto millions of small merchants; ecom-merce in goods requires large invest-ments and longer gestation period.

Secondly, it is at a very early stage inIndia, and much investment and inno-vation needs to go into various technol-ogy and business models andinfrastructure to be able to reach an op-timum model.

Thirdly, currently investments here donot create either ownership of resourcesor entry barriers to the flowing of newbusinesses.

7 Annexures

Annexure 1: A Position Paper On FDI In Consumer Ecommerce In Goods


Fourthly, there are no government in-centives; either in promoting start-upsin this sector or in the form of tax subsi-dies or any other fiscal incentives.

It has been our experience that in sec-tors where investments have the abovefour characteristics, domestic invest-ments have been shy. It is for this reason that we believe thatFDI in its various forms, in fact, all pos-sible forms, may be necessary to helpthis industry grow and make a real im-pact on the way transactions in goodsare conducted in out country.

On the other hand, and from a contrar-ian perspective, if ecommerce in goodsis a technology play and not a critical orsensitive sector, there is not reason whyFDI should not be allowed for the accel-eration of this business.

outline of a Policy Framework:We are of the view that, if the policy isto open ecommerce in goods to FDI, itshould be formulated in a manner thatshould allow for a substantial yetsmooth flow of investments and, sec-ondly, it should take care of some of thesensitivities, real or perceived, that thesociety may have.

Based on these two aspects, we suggestbelow a few salient features: 1. 100 per cent Fdi should be allowed:

The rationale behind this is:a.it is a logical extension of 100per cent FDI in single brand re-tail and b.most large brand who wouldwant to set up on their ownshould not be “forced” into a“partnership” since this is not a“strategic” sector.

2. no differentiation between “strate-gic” and “financial” investments: Weare of the view that such technical andsomewhat artificial definitional differ-entiation leads is confusion and possi-bly not transparent arrangements. 3. no artificial “Floor” to investments:Our rationale for this is such ceilings act as a barrier to smaller investors whileencouraging larger investors who usu-ally uses this as a competitive advan-tage. 4. no investment in agriculture sector:[except processed and packaged food]. Since the larger goal in the first step isto take care of the distribution needs ofmanufacturers and traders, it is sug-gested that ecommerce in goods, at thisstage, should not be encouraged in thefarm sector. It will be some years of ca-pacity and outreach building beforesuch ecommerce companies develop ca-pacity to purchase directly from thefarm level. 5. not limited to states: As a policy andpractice it is not possible to restrict ecommerce to a few states. However, itshould be left to individual companiesbased on a complicated matrix of logis-tics, state level paper work etc. to de-cide which geographies within thecountry they would like to extend theirservices.6. local sourcing: While ideally, wewould not suggest any floor on ceilingon local sourcing, ecommerce in goodsis primarily about sourcing locally. Allsuch companies are capable and willingto undertake more than 30 per centlocal sourcing.

in conclusion we would like to submitthat 1. There is a substantial investor interestin this new sector and an “open” FDI

regime is likely to lead to considerableinvestments; 2. An open FDI will lead to promotionof ecommerce which in turn would leadto much social and economic good.There is a clear link between economicand social goals and FDI in ecommerce. The current distribution model is alsoone-way. It usually flows from theurban centres to the rural areas. Spreadof ecommerce in goods can be a greatopportunity for synchronous commercewhere a buyer is also a potential sellerand vice versa. This would be a gamechanger.

in conclusion we would like to submitthat 3. There is a substantial investor interestin this new sector and an “open” FDIregime is likely to lead to considerableinvestments; 4. An open FDI will lead to promotionof ecommerce which in turn would leadto much social and economic good.There is a clear link between economicand social goals and FDI in ecommerce.


Government of India Ministry of Communications and Information Technology Department of Electronics & Information Technology

Date : 18.03.2013

Clarification on The Information Technology (Intermediary Guidelines) Rules, 2011 under section 79 of the Information Technology Act, 2000

The Department of Electronics and Information Technology had notified Information

Technology (Intermediary Guidelines) Rules, 2011 under section 79 of the

Information Technology Act, 2000 on 11.4.2011 vide notification no. G.S.R. 314(E).

These Rules provide a due diligence framework to be observed by intermediary

while discharging his duties. Sub-rule (4) of Rule 3 provides that the intermediary

upon obtaining knowledge by itself or been brought to actual knowledge by an

affected person in writing or through email signed with electronic signature about any

such information as mentioned in sub-rule (2), shall act within thirty six hours and

where applicable, work with user or owner of such information to disable such

information that is in contravention of sub-rule (2).

The Indian intermediaries have implemented these Rules. However some Industry

Associations have requested for a clarification on the words

thirty- -rule (4) of Rule 3. It is clarified that the

intended meaning of the said words is that the intermediary shall respond or

acknowledge to the complainant within thirty six hours of receiving the

complaint/grievances about any such information as mentioned in sub-rule (2) of

Rule 3 and initiate appropriate action as per law. Further, the Grievance Officer of

the intermediary shall redress such complaints promptly but in any case within one

month from the date of receipt of complaint in accordance with sub-rule (11) of Rule

3. The intermediary should have a publicly accessible and published grievance

redressal process by which complaints can be lodged.

****************

Annexure 2


Annexure 3: Issues Relating To The Growth Of Internet Ind Mobile Data Industry

As submitted to The Deputy Chairman,Planning Commission

executive summaryThe Deputy Chairman, Planning Com-mission, following his Inaugural Ad-dress at the India Digital Summit [theflagship annual summit of IAMAI, hadadvised the industry to provide himwith a considered feedback on whatwere the factors impeding the growthof this new industry.

IAMAI had convened a meeting ofmembers where the issues were deliber-ated and the following feedback given.

issues:• Open Internet and Universal access, • Non-Competitive barriers from in-

cumbents, • E-commerce and its potential to

transform the way business is trans-acted today,

• Promotion of Entrepreneurship inthe digital space to create employ-ment,

• and development of Internet servicesaround skills development, educa-tion, & healthcare.

This report outlines in some detail theabove areas of concern that impacts thegrowth or otherwise of internet anddigital data business. However, thegroup realised that these issues can notbe resolved immediately and that muchmore thought and deliberation wereneeded to firm up specific action itemsaround these broad issues. The group,therefore, put up two suggestions forthe consideration of the Deputy Chair-man Planning Commission:

Recommendations: The industry sub-mits two recommendations for thePlanning Commission’s consideration. • Creation of a “Think Tank” or “Ex-

perts’ Group” comprising policymakers, businesses and academia.This group can identify in a secularmanner the “push backs” to industryand an appropriate way forward inall the top 5 issues identified above.This group could also proactivelymake non-binding suggestions onany policy, regulation, business prac-tice that directly or indirectly impactsthe internet and mobile data indus-try.

• Creation of a fund of funds chan-nelled through SIDBI specifically forpromotion of entrepreneurshiparound consumer internet and mo-bile data services for Indian citizens.

1. introduction[this section highlights genesis of thissubmission including commonly un-derstood motivations for internet-based economy, which gives impetusto government initiatives like Rti,provides a viable medium for efficientbusinesses, encourages skill develop-ment & training, and, lastly, generatesemployment.]

In the last five years years, there hasbeen a consensus of sorts among gov-ernment, civil society and others thatInternet whether traditional PC basedor through wireless through mobile andtablets has a very deep impact on ourdevelopmental goals. It is expected toadd efficiency and transparency to gov-ernance and businesses; allow for amore broad based development and di-rectly and indirectly provide employ-ment and livelihood. The need to movetowards and internet and apps basedeconomy is felt by all.

The government on its own is makinglarge investments in one key aspect: ac-cess, through the national optic fibreoptic network. It is also moving to-wards delivery of governance throughthe medium of internet and mobile.There is also a connected network of ac-ademia. Plans are also afoot to providesolutions to critical issues like health-care, education and skills developmentthrough internet.

In parallel, internet and mobile databusinesses has been growing on theirown steam for the last 10 years andbrining in more and more users by pro-viding useful and commercially viableservices.

Since the industry has been small andalmost invisible so far, the challengeshave been manageable and often unar-ticulated.

However, at a recent address to theIAMAI, the Deputy Chairman of thePlanning Commission, articulated theproblems of the industry in the mostapt manner. He pointed out amongother things:a. New technology always faces push

back from various incumbents andgovernment

b. It may not be viable to align with oneDepartment in the government sinceinternet permeats many facets

c. Ecommerce needs to be facilitatedsince it is a whole new paradigm of

transacting

He also suggested that if there are non-fiscal and non-subsidy related larger is-sues that are impeding the progress ofthis industry, he would be ready to lookinto them.

Taking his directions as a starting point,IAMAI had convened a feedaback ses-sion with members. This group identi-fied five broad areas that could beaddressed going forward. The groupalso agreed that these areas needed con-tinuous and sustained attention andsuggested that a group of experts or athink tank under the aegis of the Plan-ning Commission may be the most ap-propriate structure to look into detailsof the five issues and make suggestions. The areas of concern and the sugges-tions of industry have been oulined inthe rest of this paper.

2. key issues[the section highlights key areas ofconcern for internet-based businessesin india, as gathered from industry in-teraction facilitated by iamai.]

The following are recognised as five (5)key issuesInternet - based businesses inIndia: 2.1. Open Internet and Universal ac-

cess2.2. Barriers by incumbents2.3. E-commerce and its potential to

transform the way business istransacted today (see annexure 1)

2.4. Promotion of Entrepreneurship inthe digital space to create employ-ment

2.5. Internet services around skills de-velopment, education, and health-care

Specific issues in each of these areas arearticulated below.2.1. open internet and universal ac-cess :The development of internet primarilydepends on universal access and open-ness. In the Indian context three mainissues pertaining to Open Internet andUniversal access can be highlighted:a. It is commonly agreed at least

amongst businesses that increasinglythere are more and more rules andlaws being made relating to internet.This is should be discouraged sinceInternet is already “governed” by ex-isting laws of the land. There is noneed for special laws for Internet.More importantly, most of these lawsand regulations and seemingly made


to “control” rather than “encourage”the use of Internet. A good case in thepoint is the evolution of the IT Actsince 1999. The Act was envinsonedto promote ecommerce, but is cur-rently used mainly to control inter-net.

b. In order to promote universal access,there is the need to promote locallanguage on the internet and thereshoud be a clear roadmap to do thiswhere all the stakeholders need toconverge on a single point. India isthe only coutry where Internet hasdeveloped on non-vernacular con-tent.

c. Secondly, given the levels of literacy,video and audio content are going tobe very important. From that per-spective bandwidth requirementsand consumer pricing needs to bekept in mind.

d. Finally, and this may prove to be im-portant, awareness of the usefulnessof the medium is one of the key cata-lyst to adoption, especially in ruralareas. There has not been any cam-paign to promote the benefits of in-ternet so far.

2.2. barriers by incumbents:As internet grows, it is going to impactmany exisiting businesses mainly asmore efficient distribution channel fortheir product and services. While inde-pendent businesses can be built onthese new channels as has been shownin cases such as Online Travel, there isusually a push back from the incum-bents. They either want to control orown this channel and come in the wayof development of independent busi-nesses being built around delivery anddistribution of their services. Onegeneric case is cited below. The indusrtyis apprehensive that this is ging to bethe case in many sectors [Telecom,Travel, Financial Serivces, Education,Healthcare, etc.].

1. incumbents usuallya. Are more adept at working with reg-

ulatorsb. Have existing relationshipsc. The regulators understand their busi-

ness models welld. Sometimes inadvertently become

supporters of incumbency

2. new players or disruptive technolo-giesa. Usually do not have, or have a very

nascent relationship with the regula-tors

b. Regulators find their business modelsalien

3. Regulations sometimes are broughta. Owing to insufficient knowledge of

either the disruptive technologies,

their impact, or their business modelsb. Feedback is usually taken from the

existing incumbents, who on onehand do not want the disruption totheir business, even if it benefits con-sumers, and mostly do not them-selves understand the new modelswell enough

4. hence there is a need fora. A recommendatory body supporting

the case of disruptive technologies

2.3. e-commerce and its potential totransform the way businesses aretransacted today (details in annexure 1)

2.4. Promotion of entrepreneurship inthe digital space to create employ-ment:This section pertains to three key issuesthat may be addressed in order to pro-mote internet and mobile data basedbusiness with the sole view to servicethe Indian local market. We are of theview that given the limited funding thatthis industry has, it is essential to have aseparate fund and linked incentives tohelp build these businesses. It may benoted that the differentiator here is notbetween a product and a service com-pany, but between what is being devel-oped for the Indian market and what isnot.

We have made noticed the followingimpediments to funding even whenfunds have existed:a) Lack of focus on this industry which

is essentially addressing the Indianmarket and Indian citizens

b) There is a problem with disbursal oflarge funds given the structure andmandate of the government. Mostsuch funds are given to “governmentrecognised” or “government sup-ported” institutions and very few ofthem are able to commercialise this.The current structures could be easilystreamlined to fund post start upcompanies which have proof of con-cept and would want to scale up. Afocused SIDBI fund would be usefulin this context.

c) The main issue sometimes for com-panies in our sectors is start upmoney which is really small amountsfor thousands of small entrepreneurs.This structure is currently missingfrom the eco system. This can be bestaddressed by one-off grants in theform of awards of 20-30 lakhs for ex-ample for “Best Apps”, “Best MobileGov. Solution” etc. every year. Thiswould require a small corpus andover the years, literally, hundreds ofstart ups could be funded directly.IAMAI would be very interested inassisting the government in manag-ing and administering this fund.

d) Finally, a clear road-map should becreated on how small entrepreneursand apps developers can build on theopportunities created by the NOFN.

2.5. internet services around skills de-velopment, education, and healthcareA matter of concern has been to developinternet services that have a direct bear-ing on the soci-economic developmentof the country. While many other im-portant internet services such as jobs,matrimony and others have developedby carving out a niche for themselvesfrom the existing offline services, in thecase of three critical services such ashealthcare, skills development and edu-cation, the issues are more complicated.Since these involve government, regula-tors, incumbent industry and the inter-net based serivce delivery companies.

The issues that we have noticed, espe-cially with reference to these three keyservices can be clubbed under threeheads:a) Regulatory/ Rules that are very anti-

quated and does not support free andfair development of new services.

b) Dependence and therefore push backfrom incumbents

c) Lack of digital content and not posi-tive business inventive for develop-ing such content

d) Lack of support for businesses thathave started on their own but needresources to scale up and make amark. One of the reasons for this isthat due to points 1 and 2 investorsare sometimes wary of making invst-ments in such services.

A case in the points are the regulatoryissues around skills development pro-gramme:

• Regulatory and legal frameworks inonline training & skill development,with ‘territorial jurisdiction’ govern-ing distance-education being a casein point.

• Harmonisation concerns around Na-tional Vocational Education Qualifi-cation Framework (NVEQF) byMinistry of Human Resource Devel-opment, and National Skills Qualifi-cation Framework by PrimeMinister’s Office.

3. RecommendationsWe are aware that the issues that wehave highlighted can not be resolved bya magic wand, we are also aware thatthere are many other issues that willhave to be solved by market forces overa period of time and with increasedadoption of Internet by people. How-ever, we strongly feel that there needsto be a non-partisan group that is for-mally formed and that deliberates and


makes top level recommendations onthe issues that we have raised. We alsofeel that funding of new businessesboth at the start up level through oneoff grants in form of awards and at thescaling up level through more formaland structured funds are necessary.

1. setting up of an advisory body: It is sub-mitted that a recommendatory body be in-stituted with the mandate to identifyproblems and to make recommendations.

It is further recommended that the body beconstituted of a group of experts with suf-ficient appreciation of the potential of dis-ruptive technologies thattelecommunication networks furnish andshould operate under the aegis of the Plan-ning Commission. This group can be sup-ported and funded partly or wholly by theindustry.

2. setting up a ‘Fund of Funds’: It is pro-posed that the cause of entrepreneurshipbe furthered by setting up a fund on the

lines of SME Fund. It is further recom-mended that innovative alternatives tolarge funds distribution models, that ad-dress transactional costs of management offunds, be evaluated, and global trends onthe same be studied with Singapore’ ‘Start-up Fund’ being a case in point. Lastly, thePlanning Commission may also evaluatelocal successes in CII’s ‘Brand Equity Fund’and ICT Fund managed by MSME Fundmanagers for replication in the context ofinternet and telecommunications-driven

businesses.

a. customer acquisitionOur recommendations to make e-pay-ments more accessible through prepaidpayment instrument include: • Zero KYC for all prepaid payment in-

strument (max balance at INR 50,000)with restriction only on cash-with-drawal & Forex transactions

• On all prepaid payment instrumentallow e-KYC using the Aadhaar in-frastructure which eliminates theneed of collecting and verifyingpaper documents from consumers.This will enable the payments indus-try to work on a ubiquitous initiativeand authenticate identity of people

To further push for a less-cash India, itwill be critical that the prepaid paymentinstrument issuance be brought underthe financial inclusion targets of thebanks and incentivize the banks and ac-celerate financial inclusion in the coun-try.

availability our recommendation:• BC activities for basic services like

cash-in and cash-out to be enabled atthe everyday use merchant categories– Post-office, LIC Branches/agents,Petrol stations and domestic Gasdealerships, outlets of Utility compa-nies like BSNL/MTNL, Mobile sim /top-up retailers, as they continue totransact very large volumes of cash.They must be categorised as“Deemed BCs” making it much eas-ier for banks to expand their servicenetwork. These Deemed BCs neednot be exclusive to any bank makingit a truly interoperable channel. Fur-ther, this will drive a behaviouralchange in consumers who wouldconvert their cash into electronicvalue more easily and frequently.Many of these Deemed BCs are alsomerchants. Hence, this is the firststep towards driving consumers to

use this electronic value to make pay-ments instead of converting it back tocash.

• To gain exponential increase in adop-tion of cashless payments, the highlyproliferated mobile phone channel ismost suitable. Among telecom tech-nologies, USSD is the most prevalent,pervasive and widely used option.Additionally it also takes away theinherent insecurities of SMS. It is pos-sible to get USSD code from all tele-com operators making it truly aninteroperable option.

b. dis-incentivise cash; accelerate ac-ceptance; standardise mdR normsour recommendation:• The RBI should levy a charge on all

cash-withdrawals and cash depositsmade by any mode (ATM, Cheque,withdrawal slip, cash at POS) aboveINR 2000. RBI could collect INR 10for every such transaction from theBank and use the pool to drive con-sumer awareness program on thebenefits of e-payment. RBI shouldallow the banks latitude to pass thischarge on to their consumers as a feefor cash handling over a certainamount. If the source of cash ischarged, there will be less propensityfrom consumers to use it and will beencouraged to use the more efficientsystem of e-payments

• Below are a few examples of how ei-ther the customeror merchant or bothcan be incentivised to convert a cashtransaction into a cashless one.

o Tax breaks (Income Tax, ServiceTax etc.) to merchants on transac-tions paid for through e-pay-ments to increase e-paymentacceptance and to drive wholehearted acceptance of POS infra-structure and the MDR concept.

o Discounts to be offered to con-sumers on certain types of pay-ments in case they use an

e-payment option• No surcharge should be allowed by

any merchant to customers for anytype of electronic payments. MDR isnow lowered to an extent that is wellat or below cash management costlevels and this should be subject toall Merchants compulsorily paying atthe standard MDR fixed by regula-tors be it government serviceprovider or any other.

• Income tax payments are now man-dated to be an e-payment. Paymentsfor goods and services of certain mer-chant types in towns and cities with acertain population and above shouldbe mandated to be electronic in casethe amount is INR 2000 or above.

c. awareness and education to con-sumers and all stakeholders aboutePayment options.A massive campaign at the countrylevel by all players Government, Regu-lators and Industry needs to be under-taken for at least 3-5years oncontinuous basis to:• Highlighting the options available for

epayments for all consumers andbenefits over cash

• We can draw example from 'DoBoond' campaign to eradicate 'Poliodisease' in the country, a similar exer-cise at massive scale needs to be un-dertaken to eradicate 'disease of cashusage' in our country.

Appendix 4: Recommendation For Cash To less-Cash India


Appendix 5: Some Of The Key notifications Issued By RBI And

Government Of India During The Year Were:

1. Financial inclusion – use of busi-ness correspondents:o With a view to promote financial in-

clusion, a roadmap to provide bank-ing services in every villagepopulation above 2000, the Hon’bleFinance Minister in his speech onUnion Budget 2012-13 had stated thatUltra Small Branches are being set upat these habitations where BusinessCorrespondents (BCs) would dealwith cash transactions.

2. Policy guidelines for issuance andoperation of Prepaid Payment instru-ments in india-amendments: On a re-view of the development of the issuanceand acceptance market for prepaid pay-ment instruments, the Reserve Bank hasconsidered it necessary to carry out thefollowing amendments -o The limit of Rs 1000/- for semi-closed

prepaid payment instrument hasbeen raised to Rs 2000/-. Semi-closedsystem payment instruments up toRs 2000/- may be issued against anyidentity document furnished by thecustomer subject to reporting of an-nual turnover/suspicious transac-tions. It shall be ensured that underno circumstances, more than one ac-tive instrument is issued to the sameholder by the same issuer.

o Semi-closed system payment instru-ments which permit only payment ofutility bills/ essential services / airand train travel tickets; and recurringpayment of college fees, school fees,government taxes up to a limit of Rs10,000/- can be issued without sepa-rate KYC being undertaken by the is-suer. The persons issuing suchinstruments may ensure that theseinstruments are made acceptableonly at institutions which mantianthe full identity of the customers. Theutility bills/ essential services shallinclude only electricity bills, tele-phone/mobile phone bills, insurancepremium, cooking gas payments,rental for Internet/broadband con-nections, cable/DTH subsriptions andcitizen services by Government orGovernment bodies.

3. Policy guidelines for issuance andoperations of Prepaid Payment instru-ments in india – Further amendments:o Rationalisation in the categorisation

and value limits of PPIs: The five cat-egories of semi-closed PPIs as indi-cated in our previous guidelines havebeen replaced with three broad cate-gories as under:• Semi-closed system prepaid pay-

ment instruments can be issuedupto Rs.10,000/- by accepting min-

imum details of the customer pro-vided the amount outstanding atany point of time does not exceedRs 10,000/- and the total value ofreloads during any given monthalso does not exceed Rs 10,000/-.These can be issued only in elec-tronic form;

• Semi-closed system prepaid pay-ment instruments can be issuedfrom Rs.10,001/- to Rs.50,000/- byaccepting any ‘officially valid doc-ument’ defined under Rule 2(d) ofthe Prevention of Money Launder-ing Act. Such PPIs can be issuedonly in an electronic form andshould be non-reloadable in na-ture;

• Semi-closed system prepaid pay-ment instruments can be issuedupto Rs.50,000/- with full KYCand can be reloadable in nature.

o Strengthening Escrow management• The non-bank entities issuing pre-

paid payment instruments are re-quired to maintain theoutstanding balance in an escrowaccount with any scheduled com-mercial bank subject to the condi-tions stipulated in the guidelinesdated April 27, 2009 and Novem-ber 24, 2010.

• It is advised that the escrow ac-count should be credited immedi-ately as and when theissuer/agent/distributor sells a PPIto the end-user. Further, the bal-ances in the escrow accountshould be adequate to cover theoutstanding balances on the PPIswith end-users and the obligationsto merchants arising out of theusage of the PPIs by the end-usersat any given point of time.

o Domestic Money Transfer relax-ations: In terms of the guidelinesdated October 05, 2011,domesticfund transfer is permissible: (i) froma prepaid payment instrument to an-other prepaid payment instrument is-sued by the same issuer; and (ii) froma prepaid payment instrument issuedwith full KYC to a bank account upto Rs 5000/- with a monthly ceiling ofRs 25,000/- per remitter. In view ofthe amendments indicated at Para 3Aabove, it has been decided that all thethree categories of prepaid paymentinstruments mentioned therein willnow qualify for domestic moneytransfer. The other conditions as indi-cated in the guidelines dated October05, 2011 will continue to prevail.

4. Financial inclusion – opening ofaadhaar enabled bank accounts(aeba):o In view of the timelines attached to

the implementation of EBT for rout-ing MGNREGA wages and social se-curity benefits including proposedcash transfer in respect of subsidieson Kerosene, LPG, and Fertilisers, allRegional Rural Banks are requestedto ensure opening of Aadhaar En-abled Bank Accounts (AEBA) of allthe beneficiaries including those re-siding in villages with less than 2000population.

5. merchant discount Rates (mdR)structure for debit card transactions:o The Merchant Discount Rate (MDR)

for debit and credit cards has hith-erto been similar in India. The debitcard is a secured product with thecard usage being linked to the avail-ability of funds in the accounts of thecustomers. Credit cards, on the otherhand, are a part of the unsecuredcredit product portfolio of the is-suers. The credit card usage is linkedto the credit limit sanctioned by theissuer and carries with it an elementof credit risk. Thus given the differ-ent nature of the two products, thereis no rationale for having a similarMDR for debit and credit cards. Fur-ther, it is observed that debit cardsare mostly being used for withdrawalof cash at ATMs.

o Given this scenario, it is necessary toencourage the use of debit cards, es-pecially at smaller merchants/serviceproviders and location by way oflower MDR. This move would en-courage all categories and types ofmerchants to deploy the card accept-ance infrastructure and also facilitateacceptance of small value transac-tions. Further, in the case of the ac-quiring banks, a certain element ofguarantee on the Return on Invest-ment (ROI) is required for deepeningthe card acceptance infrastructure. Alower MDR with the expected in-crease in transaction volume on ac-count of network effects would resultin a reasonable ROI for acquiringbanks.

o Accordingly, in consultation with thestakeholders, it has been decided tocap the MDR for transactions under-taken with debit cards as under:

o not exceeding 0.75% of the transac-tion amount for value upto Rs 2000/-;

o not exceeding 1% for transactionamount for value above Rs 2000/-.


6. security and Risk mitigation meas-ures for electronic Payment transac-tions:Payments effected through alternatepayment products/channels are becom-ing popular among the customers withmore and more banks providing suchfacilities to their customers. While thismove of the banks indeed promotes andencourages the usage of electronic pay-ments, it is imperative that the banksensure that transactions effectedthrough such channels are safe and se-cure and not easily amenable to fraudu-lent usage. One such initiative by RBI,was mandating additional factor of au-thentication for all card not present(CNP) transactions. Security of cardpresent transactions has also been initi-ated by RBI through the implementa-tion of recommendations of theWorking Group on Securing Card Pres-ent transactions. Banks have also put inplace mechanisms and validationchecks for facilitating on-line fundstransfer, such as: (i) enrolling customerfor internet/mobile banking; (ii) addi-tion of beneficiary by the customer; (iii)velocity checks on transactions, etc.

With cyber-attacks becoming more un-predictable and electronic payment sys-tems becoming vulnerable to new typesof misuse, it is imperative that banks in-troduce certain minimum checks andbalances to minimise the impact of suchattacks and to arrest/minimise the dam-age. Accordingly, banks are required toput in place security and risk controlmeasures as detailed here under:

a. securing card Payment transac-tions:o All new debit and credit cards to

be issued only for domestic usageunless international use is specifi-cally sought by the customer. Suchcards enabling international usagewill have to be essentially EMVChip and Pin enabled. (By June 30,2013)

o Issuing banks should convert allexisting MagStripe cards to EMVChip card for all customers whohave used their cards internation-ally at least once (for/through e-commerce/ATM/POS) (By June 30,2013)

o All the active Magstripe interna-tional cards issued by banksshould have threshold limit for in-ternational usage. The thresholdshould be determined by thebanks based on the risk profile of

the customer and accepted by thecustomer (By June 30, 2013). Tillsuch time this process is com-pleted an omnibus threshold limit(say, not exceeding USD 500) asdetermined by each bank may beput in place for all debit cards andall credit cards that have not beenused for international transactionsin the past.

o Banks should ensure that the ter-minals installed at the merchantsfor capturing card payments (in-cluding the double swipe termi-nals used) should be certified forPCI-DSS (Payment Card Industry-Data Security Standards) and PA-DSS (Payment Applications -DataSecurity Standards) (By June 30,2013).

o Bank should frame rules based onthe transaction pattern of theusage of cards by the customers incoordination with the authorizedcard payment networks for arrest-ing fraud. This would act as afraud prevention measure (ByJune 30, 2013).

o Banks should ensure that all ac-quiring infrastructure that is cur-rently operational on IP (InternetProtocol) based solutions aremandatorily made to go throughPCI-DSS and PA-DSS certification.This should include acquirers,processors / aggregators and largemerchants (By June 30, 2013).

o Banks should move towards realtime fraud monitoring system atthe earliest.

o Banks should provide easiermethods (like SMS) for the cus-tomer to block his card and get aconfirmation to that effect afterblocking the card.

o Banks should move towards a sys-tem that facilitates implementa-tion of additional factor ofauthentication for cards issued inIndia and used internationally(transactions acquired by bankslocated abroad).

o Banks should build in a system ofcall referral1 in co-ordination withthe card payment networks basedon the rules framed at (v) above.

b. securing electronic Payment trans-actions

The electronic modes of payment likeRTGS, NEFT and IMPS have emergedas channel agnostic modes of fundstransfer. These have picked up to alarge extent through the internet bank-

ing channel and hence it is imperativethat such delivery channels are also safeand secure. Some of the additionalmeasures that need to be introduced bythe banks could be as follows:

o Customer induced options may beprovided for fixing a cap on thevalue / mode of transactions/bene-ficiaries. In the event of customerwanting to exceed the cap, an ad-ditional authorization may be in-sisted upon.

o Limit on the number of benefici-aries that may be added in a dayper account could be considered.

o A system of alert may be intro-duced when a beneficiary isadded.

o Banks may put in place mecha-nism for velocity check on thenumber of transactions effectedper day/ per beneficiary and anysuspicious operations should besubjected to alert within the bankand to the customer.

o Introduction of additional factorof authentication (preferably dy-namic in nature) for such paymenttransactions should be considered.

o The banks may consider imple-mentation of digital signature forlarge value payments for all cus-tomers, to start with for RTGStransactions.

o Capturing of Internet Protocol (IP)address as an additional valida-tion check should be considered.

o Sub-membership of banks to thecentralised payment systems hasmade it possible for the customersof such sub-members to reap thebenefits of the same. Banks accept-ing sub-members should ensurethat the security measures put inplace by the sub members are onpar with the standards followedby them so as to ensure the safetyand mitigate the reputation risk.

o Banks may explore the feasibilityof implementing new technologieslike adaptive authentication, etc.for fraud detection.

The above security measures under B (i)to (ix) are expected to be put in place bybanks by June 30, 2013.

7. Payment system vision document:The Reserve Bank of India released itsPayment System Vision Document2012-15 with a specific Mission and Vi-sion to promote and enhance less-cashsociety in India.

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C-36 (Basement), East of KailashNew Delhi – 110065Tel: +91-11-40547606

AnnuAlREPORT 2012-13

About IAMAIThe Internet and Mobile Association

of India [IAMAI] is a young and vi-

brant industry association with am-

bitions of representing the entire

gamut of digital businesses in India.

It was established in 2004 by the

leading online publishers, but in the

last eight years has come to effec-

tively address the challenges facing

the digital and online industry includ-

ing mobile content and services, on-

line publishing, mobile advertising,

online advertising, ecommerce and

mobile and digital payments among

others.

Eight years after its establishment,

the association is still the only profes-

sional industry body representing the

online and mobile VAS industry in

India.

The association is registered under

the Societies Act 1896 and is regu-

lated by the Charity Commissioner of

Maharashtra. With a membership of

120 plus Indian and MnC companies,

offices in Delhi and Mumbai and a

permanent and professional staff,

the association is well placed to work

towards charting a growth path for

the digital industry in India.

Annual Report201314Low Res

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