India Will Have 500 Million Internet Users By 2017, Says New Report

Next Story

KFit, Asia’s Answer To ClassPass, Lands $3.25 Million Led By Sequoia

Inexpensive smartphones and 2G subscriptions are expected to help boost Internet usage rates in India over the next two years, according to a new study by the Internet and Mobile Association of India (IAMAI) and KPMG. While city dwellers are quickly upgrading to 3G and 4G, slower but more affordable data plans will enable more people to get online.

IAMAI-KPMG estimates that there will be a total of 500 million Internet users (out of a total population of 1.25 billion) in India by 2017, up from a current number of about 350 million. According to the report, the number of mobile Internet users in two years will be 314 million.

Though India has the second-highest number of Internet users in the world after China, its online penetration rate is still just 19 percent.

In a statement, IAMAI president Dr. Subho Ray said Internet growth will be driven by users in rural areas: “The advent of low-cost smartphones coupled with low mobile tariffs has empowered consumers in the hinterland to use data connectivity, and we will be seeing more usage from those areas in months to come.”

According to the report, 905 million Indians live in rural areas and 6.7 percent, or 61 million, currently use the Internet on a regular basis. About 4.4 percent go online using a smartphone, a significant increase from 0.4 percent in 2012. People without smartphones or PCs use community centers or cyber cafes instead, but that will probably change quickly as more makers of inexpensive Android devices — such as Xiaomi, Micromax and OnePlus — focus on India as a key growth market.

While many rural subscribers will select 2G plans, their counterparts in rural areas are likely to sign up for speedier connections. At the end of last year, there were 82 million 3G subscribers in India, but that number is expected to almost triple to 284 million by the end of 2017.

Featured Image: NOBUHIRO ASADA/Shutterstock