The Indian internet revolution waiting to happen..
On a recent visit to India, my 15 year old cousin showed me his birthday gift: one of the latest Micromax smartphones that had been purchased for £50. He was clutching it with excitement as he explained how he could watch YouTube videos and message all his friends on Facebook and WhatsApp.
He is one of the 5 million new internet users that India get every month. India as it currently stands has around 250 million internet users, that’s more than the U.S and 2nd only to China, yet it still has an internet penetration of less than 20%. By 2018, Google India predicts that almost half the country will be connected through the internet-that’s a cool 500 million which is twice the number of internet users in the U.S.
This growth has been accelerated by cheaper smartphones, fueled by domestic producers and a ballooning telecoms industry with price competition in internet tariffs. Micromax, one of the domestic phone manufacturers have captured nearly 18% of the market by selling Android-based handsets in villages so remote that even necessities like access to safe drinking water is a challenge. Initiatives like Google’s AndroidOne have also helped maintain the quality of these cheap smartphones.
So who are these new internet users? They’re not just the wealthy, they’re the mobile-first generation that go on Facebook and live all over the country. The average Indian spends most of his internet time on social media and more than half of them are using their devices to make an online purchase while more than 90% use their mobile devices to research about a product before buying it.
This boom in internet usage has given rise to a vast range of opportunities and according to a McKinsey study, India’s internet contribution to GDP has increased from 1.6% in 2012 to 3.3% this year. This growth has been fuelled by the return of Indian-born engineers who have played a key role in the success of Silicon Valley: Satya Nadella, CEO of Microsoft & Sundar Pichai SVP of Google as prime examples.
The Internet has already revolutionised travel, education, retail and agriculture shown by how it has helped Indian farmers who can use their phones to find real-time info on commodity prices and then dispatch their produce to an appropriate market.
The Indian e-commerce market has been a prime example of astounding growth. It is expected to grow 37% to reach $20 billion by next year on the back of a growing internet population and increased online shoppers. Local companies like Flipkart and Snapdeal are going up against the mighty Amazon. Flipkart has raised more than $1.2 billion this year, while Snapdeal has received about $850 million and Amazon India got a commitment of $2 billion from its parent in July.
However, India still has a ton of growing pains. The current telecoms infrastructure cannot cope with this increase in traffic. Some problems include: network overload (when you have full signal but can’t call), dropped calls and patchy internet. The main cause of these problems being a lack of spectrum. For example: Delhi’s top operator has about the same number of 3G users as its peers in Singapore or Shanghai but has about 1/10th of their spectrum. Bearing in mind these infrastructure issues, the possibilities for mobile internet India seem endless.
