Over Half A Billion Indians Will Be Online In The Next Four Years

Internet use in India will be boosted by falling prices of smartphones and more importantly cheaper data rates from telecom operators.


More Indians already access the Internet through mobile devices rather than traditional PCs, and wireless Internet usage is expected to grow exponentially in the coming years. Now, a report by Morgan Stanley suggests that India will have 519 million Internet users by the fiscal year 2018.

The research firm believes that the number of data subscribers in India will grow by 25 percent every year. By fiscal year 2016, internet users will be up from 210 million to 330 million, eventually passing the half a billion users mark by financial year 2018.

"By FY2018, we expect data subscribers to grow at a 25 per cent CAGR (compound average growth rate), from 210 million to 519 million and see a 35 per cent CAGR in data usage to750 MB per subscriber, near the Asian average," said the report.

According to telecom regulator TRAI, there were 210 million internet users in India at the end of September 2013, 188 million of whom had access to it on mobile. The rest was made of 7 million narrowband subscribers (with speed less than 256kpbs) and 15 million broadband subscribers (with speed of over 256kbps).

While the falling rates of smartphones in the country are giving more people an opportunity to go online, telecom operators will have to rely on a strategy of lowering the average revenue per mega byte (ARMB) to really boost growth.

"A 3G, 2GB pack in January 2013 cost Rs 750 or 38 paisa ARMB. Today a 2GB pack costs Rs 450 or 23-paisa ARMB," the report added.

Interestingly, Morgan Stanley found that voice and data rates for Indian telecom operators are the lowest in comparison to their Asian counterparts. Moreover the difference between voice rates per minute and data rates per MB isn't that vast, which is probably why Internet calling hasn't really kicked off in India as opposed to other countries.

TAGS: Internet, Mobile Phones, India, mobile operators