The number of mobile internet users in India is expected to rise to 314 million by 2017, nearly double the 159 million it had at the end of 2014, according to a joint report by industry body The Internet and Mobile Association of India (IAMAI) and consultancy KPMG.
"With more than 300 million internet users, India has the second largest internet user base in the world. But the internet penetration at 19 per cent (approx) is poor and limits the potential. The next wave of growth in penetration of internet will be driven by adoption of mobile internet," said Ashvin Vellody, partner management c consulting, KPMG India.
The report, "India On The Go – Mobile Internet Vision Report 2015", and co-authored by Vellody and Akhilesh Tuteja, partner and head technology, estimates that the number of Internet users in India will touch 503 million by 2017, from the nearly 278 million users it had in October 2014.
However, compared with key developed markets, which are almost nearing saturation, or other comparable developing markets such as Brazil and China, India has a long way to go with a sizeable portion of the population still devoid of Internet access.
The next wave of growth in the Indian internet will come from the non-metro and rural areas. "While the urban market has not reached its saturation point, it will be non – metros and rural India that will be driving internet growth in India. And this is where mobile internet will be playing a pivotal role. The advent of low cost smartphones coupled with low mobile tariffs has empowered consumers in the hinterland to use data connectivity and we will seeing more usage of internet from these areas in the months to come," said Subho Ray, president IAMAI.
Urban areas in India have wireless tele-density—or number of telephone connections for every hundred individuals living within an area—of 142.39% , while rural wireless tele-density was only 44.32 percent, as of September 2014. The penetration of mobile devices in remote rural markets has to increase in order to be able to facilitate a rise in rural density, the report said.
Users accessing the Internet through their mobile devices has become a key driver for increasing the overall Internet subscriber base in the country. 3G users base constitutes about 36 percent of the overall mobile Internet user base, while 4G is only beginning to set its foot in the market with a 2 percent share as of June 2014, said the report.
However, the 2G user base is expected to decline in the coming years, and growth will be led by 3G and 4G networks and more and more users migrate to these higher speed networks.