Ronnie05's Blog

India and Internet’s next billion

Posted in Internet and Search by Manas Ganguly on November 14, 2013

A recent report released by IAMAI and IMRB estimates 243 million internet users in India by June 2014 there by overtaking US(200 million users) and putting India at no.2 Internet population globally, behind China at 300 million. This study also states that the internet population in India would cross 200 million by October 2013 (exact number 205 million). The caveat served is that while all the 205 million may not be active internet users currently, but they would become “active” soon.

Internet demographics
Internet in India took more than a decade to move from 10 million to 100 million and only 3 years from 100 to 200 million. From here on, we can hope to develop a robust Internet ecosystem with a multitude of local and global players and a thriving Internet economy. Internet is now, clearly, mainstream in India. the number of Computer Literates in rural India by June 2013 has risen nearly two-fold to 125 Million. The number of internet users in urban India is 137 Million in October 2013 and is estimated to touch 141 Million by December 2013. In Rural India, there are 68 Million Internet users in October 2013 and will reach 72 Million by December 2013. Mobile Internet, too, has garnered a huge base among the Active Internet Users. This is a 18%+ jump over the June 2013 numbers, when there were 59.6 Million users in Rural India who have accessed internet at least once in their lives. Although this number is witnessing a steady growth, the penetration of 6.7% among the total rural population is still very low considering the huge rural population of 889 Million.


Mobility driving Internet
The number of mobile internet users has also witnessed a steady rise, with 110 million mobile internet users in October, and is estimated to reach 130 million by the end of December. In June, there were 91 Million users accessing the Internet on mobile devices, with 70.2 million users in urban India. This number rose to 85 million in October and is estimated grow by 47% and reach 103 Million by December 2013. Rural India is not that far behind in this regard with a base of 21 Million Mobile Internet Users in June 2013. It reached 25 Million in October 2013 and will touch 27 Million by December 2013. Mobile usage and hence, mobile internet usage has seen huge jump from the 2012 penetration levels. Compared to the 0.4% mobile internet users in 2012, the penetration has grown to 2.4%, indicating a substantial growth in the mobile internet user penetration levels.

While Indians primarily use the internet for communication, largely in the form of email, social media is also an important driver of internet use in India. This facet of the IMAI report can be corroborated with data from other sources such as Facebook, according to which India had 82 million monthly active users by June 30, 2013, the second largest geographical region for Facebook after the US and Canada. Facebook does not operate in China.

Internet penetration in India is driven largely by mobile phones, with some of the cheapest and most basic hand-sets today offering access to the internet. India has 110 million mobile internet users of which 25 million are in rural India. The growth of internet penetration in rural India is driven largely by the mobile phone; 70% of rural India’s active internet population access the web via mobile phones. This may have to do with the difficulty in accessing PCs.

While the IMAI report paints an optimistic picture of internet use in the country, another report by the Broadband Commission for Digital Development, ranked India 145 of around 200 countries for the percentage of individuals using the internet.

What this means for service providers, handset OEMs and the VAS eco-system?

1. 42% of rural India’s internet users prefer using the internet in local languages. The high prevalence of content in English is a hurdle for much of rural India. Hence Vernacular medium is now key to greter penetration2. Given the poor connectivity and the lack of 3G accessibility in India – one would need to design experiences on mobile and web differently making sure that content is served first and pages are kept light. One must plan for delivery of internet on EDGE/2.75G networks
3. With projects such as UIDAI taking wings – a lot of economic activity i.e banking, payments, money transfer would also migrate online – thereby concerns on security is key
4. WiMAX could have been a great local area internet enabler – but then this technology is done and dusted. Something like the Google Balloon could be a good solution – but it may be a few years away yet.

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