IAMAI-IMRB report says Urban India has close to 60% Internet penetration, reflecting a level of saturation, but there are a potential 750 million users in Rural India
New Delhi: The number of Internet users in India is expected to reach 450-465 million by June, up 4-8% from 432 million in December 2016, a report from the Internet and Mobile Association of India and market research firm IMRB International said.
The report added its forecast does not factor in the impact of demonetisation, which gave a boost to digital and mobile transactions.
The report said overall Internet penetration in India is currently around 31%.
“Urban India with an estimated population of 444 million already has 269 million (60%) using the Internet. Rural India, with an estimated population of 906 million as per 2011 census, has only 163 million (17%) Internet users. Thus, there are potential approximately 750 million users still in rural India who are yet to become Internet users; if only they can be reached out properly."
The report points out that 77% of urban users and 92% of rural users consider mobile as the primary device for accessing the Internet, largely driven by availability and affordability of smartphones.
“Different mobile handset manufacturers have focused on introducing low priced handsets and tablets compatible to access the Internet. More and more companies are getting into this segment and this has resulted in competition primarily basis the retail price and features of the device. Fall in the rates for Internet access due to cut throat competition among mobile service providers has also contributed to significant increase in mobile phone as preferred device for Internet access," the report said.
The pattern of usage, however, starkly differs across rural and urban populations. While services such as e-mails, social networking and online shopping are prevalent in urban India, it is entertainment in the form of video and audio content driving Internet consumption in the rural counterpart of the country. Rural India is claimed to have leapfrogged to mobile technology with lower penetration of computers as a medium to access Internet.
In urban India, the Internet user base grew by 7% to 263 million for year-on-year period ended October 2016, which is expected to be 275-285 million by June 2017. For the same annual period ending October 2016, rural India’s Internet user base grew by 22% between to 157 million and is forecast to reach 170-180 million by June 2017.
Another report published by market research firm Counterpoint in January estimated that India’s smartphone user base grew to over 300 million in December 2016 as the smartphone market grew by 18% for year ended December 2016 as compared to the global smartphone market which grew at 3%. The same firm had published a report last year, claiming that India had surpassed the US to become the second largest smartphone market in the world.