globalindianewswire.com

Net users will more than double to 237 million by 2015 from 100 million now.

(This article was first posted on the International Business Times website)

By Balachander S.

BANGALORE: With an improving level of awareness among the people, penetration of snazzy mobile phones and the phenomenon called social networking, Internet usage in India — one of the new engines of global growth — is set to climb in five years, though speed is still an area of concern.

Even though Internet usage is relatively low in India compared with similarly sized countries, the rates are expected to rise as penetration increases and broadband becomes more readily available.

The BRICI countries — Brazil, Russia, India, China, and Indonesia — represent about 15 percent of global GDP and 45 percent of its population. Over 610 million residents of these countries use the Internet regularly.

That number will jump to 1.2 billion by 2015, well over three times the number of Internet users in Japan and United States combined, according to a report from BCG.

In India, Internet users will more than double to 237 million by 2015 from the current figure of around 100 million, which is hardly 10 percent of the total 1.21 billion Indian population. Nonetheless it still puts India at number three spot in the list of world’s largest Internet users.

Describing India as a "low-maturity and high growth market for years to come," BCG, a global consulting firm, says Internet penetration rate in India is expected to touch 19 percent by 2015, up from the present 7 percent.

India’s Internet use is concentrated chiefly in bigger cities, where many users are migrants from smaller towns who tend to have had limited exposure to the Internet. So the group has a narrower range of online needs than more experienced users.

Interestingly, Internet usage in India is driven by young people who browse for entertainment and educational purposes. A report from comScore, which specializes in digital market intelligence, shows that three-quarters of the web audience fall under the age group of 35, and that 15-24 year olds of both genders are the heaviest Internet users.

“The digital world is expanding, driven by growth in several key categories across the board. Social networking is a key driver of PC and mobile activity,” says Kedar Gavane, director of comScore India. “The younger consumers in India are leading the revolution, with more engagement coming from 15-34 age groups.”

There has been a clear divide in India’s digital consumption marketplace along urban-rural, rich-poor, and old-young lines. But low prices in mobile services have bridged the rich-poor gap in India’s telecom market, with the bulk of the population irrespective of income — having access to mobile services.

The total number of active Internet users in rural area is projected to double to 24 million by the end of 2011, according to a recent research jointly conducted by Internet and Mobile Association of India (IAMAI) and IMRB, which conducts market research and offers business consultancy.

The research attributed the increase of web audience in rural areas to growing awareness level about Internet and easier access for entertainment, communication and instant messaging purposes. Most companies are presently trying to bridge the biggest gap in rural areas — network coverage and distribution channels.

Meanwhile, there remains large appetite for online entertainment in India. A consistent majority of Indian online population use entertainment — or communication-oriented functions such as instant messaging, online music, news and video. The entertainment category is expected to continue to grow as broadband penetration increases.

Social networking sites reach 84 percent of the Internet usage in India, and take up 21 percent of all time spent online, comScore data showed. The BCG data revealed that a relatively impressive 23 percent use social networking sites.

Facebook, which has more than 25 million users in India, has overtaken Google’s Orkut to be leading social networking platform in the country. Orkut was the breakout social-networking platform in India, although its popularity is gradually giving way to Facebook and Twitter.

India’s mobile-phone activity, which is limited almost exclusively to phone calls and short messaging services, is changing with the availability of 3G and other forms of wireless broadband services as well as the arrival of snazzy handsets such as smartphones.

Market for the smartphones — which can be used for browsing the Internet, checking mails, social networking and downloading third-party applications — is expected grow to over 10 million units this year in India from 6 million units in 2010, according to the research and consulting firm CyberMedia Research.

Search, social networking and entertainment form a big chunk of smartphone usage.

The usage of mobile Internet has changed to such an extent that in some cases, particularly in the emerging markets, the first experience of the web is through a mobile phone rather than a PC.

“At present many smartphone users in India do not use the data services that these phones offer,” says Priti Verma, a research analyst at the strategy consulting firm AMI-Partners in Bangalore. “Insufficient data bandwidth is hindering usage of these services.”

Following the advent of 3G spectrum there has been a rise in the coverage that phone companies are able to offer and in turn smartphone penetration levels and data plan usage are going upwards, Verma adds.

Naveen Mishra, lead analyst, telecoms practice at CyberMedia Research, says these devices will become as powerful as present day laptops.

The challenge now would be for smartphone vendors to offer more and varied plan options, in addition to cutting prices amid fierce competition in the industry.

By now, mobile-online behaviours are emerging across majority of the BRICI countries, implying the tremendous potential for user growth as costs fall and networks expand.

As India’s mobile market expands, attention will turn to the Internet and a rapid decline in prices and a rise in availability will crop up rapidly. As sophisticated handsets become available, more and more digital customers are turning to mobile Internet to meet their online requirements, though the availability is still fairly limited in most of the BRICI countries.

Meanwhile, data from Akamai, which provides services for optimizing web and mobile content and applications, showed that average connection speed in India was 0.8 megabits per second (Mbps) last year, performing poorly among other countries in the world, with only Egypt and Sudan faring worse than India. The country suffered a 9.1 percent fall year-on-year in average Internet connection speed.

According to Akamai, the average Internet speed in India was 1.9 Mbps, making it 143rd in the world, contrary to South Korea that topped the list with average speed of over 13 Mbps last year. The Akamai report also showed that over 35 percent Internet connections in India had a speed of 256 Kbps or less.

With broadband gaining popularity and crucial to the growth of Internet traffic in India, it remains to be seen what measures the regulatory authorities take to improve the speed and poor quality of connections that could otherwise potentially slow down businesses that rely on high speed Internet.

Networking giant CISCO projected a positive picture with regards to the broadband speed. In its Visual Networking Index: Forecast and Methodology whitepaper, the networking and communications technology provider says the average broadband speed will grow 4.1-fold from 0.9 Mbps last year to 4 Mbps in2015. (Global India Newswire)