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Saturday, March 15, 2008

Internet penetration: A milestone achieved or a drop in the ocean?

They say that the world is god’s playground. If that is so, then the internet can definitely be referred to as the playground of the human mind. Conceptualized in 1989, this stupendous achievement of English scientist Tim Berners-Lee, was promoted publicly by 1991. Gradually, it began to expand in its usage and accessibility, and reached the Indian population in the late 1990’s.

According to a report by IAMAI- the Internet And Mobile Association of India, there are approximately 46 million claimed users and 32 million active users of the internet (those who access the internet at least once a month) as of September 2007 in India. This shows an exponential growth of claimed internet users since 2000 when the number was 4.9 million, showing an average annual growth rate of almost 50%. On the other hand, active internet users have also had an annual growth rate of approximately 70% since 2000. This goes very much against popular belief regarding India’s population which is not considered to be tech-savvy by any means. Today, even the remotest of corners in the country have access to the internet. Initiatives like ITC’s e-chaupal have allowed the rural section of the society to come of age and be acquainted with the latest technologies.

Figure 1: Internet Users in India (2000- 2007)
Source: IAMAI Data

Be it education, entertainment, finance, shopping, or anything under the sun, the internet has become the ultimate resource of knowing whatever is to be known and doing whatever could possibly be done. With the advent of technology and awareness, internet accessibility is prevalent even in the second and third tier cities of the country. According to one of the IAMAI surveys conducted in September 2007, out of the 46 million claimed internet users, 17.48 million are from the top 8 metros, 9.66 million are from other metros, 5.52 million are from cities having a population between 5 to 10 lakh, and 13.34 million are from cities having a population between 2 to 5 lakh. This clearly shows the extent of penetration of the internet industry into the Indian market. No longer is internet usage restricted to the elite few who used to be the privileged ones to use it. The estimated user-base which accesses the internet was expected to be 100 million by 2007-08, as per IAMAI, which results in an astounding growth of 163% and the Indian internet users now account for 4.9% of internet users worldwide. While this might not be close enough to the USA, with 19.7% (according to, it is definitely a good start over a span of just seven years.

With broadband connectivity having such a huge impact on the industry since its inception, the provision of faster internet speed acted as a magnet to attract more and more users who were skeptical about the dial-up internet regarding its comparatively slower speed. Broadband provider guarantee high-speed connection. The current broadband to dial-up user ratio stands at 23:77 (as of Sep, 2006, according to IMRB) which clearly indicates that broadband could be the chief reason for this unprecedented growth.

Figure 2: Mode of Internet Connectivity in India (2006)
Source: IMRB Data

All these numbers are a clear indication of how much penetration has been achieved in the internet industry. This is truly an achievement and something to be proud of for each and every Indian. However, this is not the end. While we can choose to bask in the glory of our past and feel elated by such high percentages of growth rates, quite a long road lies ahead of us when we think of the entire population as a whole. We are quite a few steps ahead from the start line, but still far from the end. The great Indian dream, if you will, would be accomplished when each and every citizen of India would be empowered with the internet to lead his life in a better way.

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