Internet users and subscribers in India

India is probably the first country where Internet adoption and growth rates have been slower than mobile phones. IAMAI and comScore data deviated widely for the user numbers in India. However, lets go with IAMAI figures, i.e 37 Million internet users at the end of Sept-2006.

Here are some interesting numbers from a recent equity research report released by Kaufman Bros. [PDF].

• Internet users in India are expected to grow at CAGR of 39% to 146 Million between 2005 and 2010. Internet subscribers are expected to grow at the rate of 48% to 40 Million between the same period, while broadband subscribers are expected to grow at the rate of 156%, but the number will be mere 20 Million at the end of 2010. I am skeptical about growth beyond these numbers.
• The report says that the online advertisement industry is likely to grow at CAGR of 50% between 2005 and 2010. It estimates a very modest growth rate between 2007 and 2010.(47%, 33% 22%) I would like to differ from the authors opinion because I think it will continue to grow at atleast 40% YoY between 2007 and 2010 in Rupee terms.
• E-commerce revenues are expected to grow at CAGR of 72% between 2005 and 2010 to $1.8 Billion. The lack of credible online brands was a bottleneck. With the emergence of malls and retail shopping experience, the Indian consumer is unlikely to opt for e-commerce. However, certain areas like Banking & Finance, Jobs, Classifieds, Matrimony etc will continue to thrive online.

Indians were slow to go online. India Infoline’s 5 paisa.com is a live example. It started as an Online Trading and Investment paltform but eventually opened for retail franchisee operations to grow. So did Shaadi.Com with its Shaadi Points. Online reservation of Indian Railway tickets is a big hit, not only in the Metros but also in tier-2 and tier-3 cities. The adoption of online gaming has been slower compared to its Asian peers. IPTV is likely to be a dream with pathetic broadband infrastructure. India is still looking for that killer Internet application that will make more Indians go online.

Internet India , India e-commerce , Broadband India , India Advertising