internet trends

Falling data costs, massive mobile usage makes India a fascinating market for internet, says report

The annual Mary Meeker ‘Internet Trends’ report says internet penetration is still low but things are changing rapidly.

In 2016, the United Nations Human Rights Council passed a resolution that said that internet access is a basic human right. Indeed, in the developed word, internet access is near ubiquitous, in line with other utilities such as clean water and power. But what about India?

On Wednesday, Mary Meeker, a researcher at the American venture capital firm Kleiner Perkins Caufield & Byers released her much-awaited annual Internet Trends report with a significant focus on India, calling it one of the “most fascinating markets for the internet on the planet”. Here are the most important highlights from the report.

India has low internet penetration – but it is growing fast. Very fast.

Only 27% of Indians have access to the internet – a figure that is nearly half of China’s (51%) and almost the same as Sri Lanka (28%) and Sudan (26%). Yet, India’s large population means that even with this low penetration, it reached the #2 spot on total internet users. Moreover, the number of Indians with access to internet is growing fast. It jumped by 28% in 2016 as compared to the previous year and has grown by nearly seven times since 2009.

Major factor driving this growth – falling mobile data rates

While India always had very low calling rates, till last year its annual average data rates were actually quite expensive being well above the 2% of annual GDP/capita threshold for affordability prescribed by the Alliance for Affordable Internet.

One player changed it all: Reliance Jio. By offering free data, Jio forced other telecom companies to cut rates drastically. As a result, annual average data rates now stand at 1.3% of annual GDP/capita – well below the recommended 2% ceiling.

As mobile data rates fall, mobile data volumes shoot up

Most developed countries first hopped onto the fixed line internet bandwagon and then moved onto mobile data. India never had the infrastructure for mass fixed line internet in the first place – so it is trying to leapfrog directly to mass mobile internet. And the plan seems to be working.

Eighty per cent of India’s internet usage is on mobiles, second only to Nigeria.

This means India’s wireless internet data has exploded – consumption has grown nine times since last year.

Exploding data consumption means exploding mobile media. People spend seven times more time on their phones than on watching television.

If your friends, family or you yourself are always on the phone – and it is a terrible habit – at least you know now that you are not alone.

The other factor helping India’s internet penetration – China

The Indian and Chinese government might not always see eye to eye but when it comes to smartphones, matters are far more sanguine. Low cost Chinese smartphone handsets are helping more and more Indians log onto the worldwide web. Till 2015, India preferred Indian manufactures such as Micromax, Lava and Karbonn. But Chinese manufacturers such as Lenovo, Xiaomi and Oppo upped their game to woo Indian smartphone users. As a result, Chinese manufacturers control more than 50% of the Indian handset market today.

While Indians are used to American, European and even Korean multinational corporations dominating the market, Chinese firms are still a novelty. To overcome this, Chinese handset manufacturer OnePlus has signed on actors Amitabh Bachchan and Sushant Singh Rajput, and tennis player Sania Mirza to advertise its phones in India.

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