India's Internet: Ready for Explosive Growth

India's NASSCOM predicts 23 million Internet users in India by 2003, a twenty-three fold increase in three years.

by Puneet Gupta

With a population of about 1 billion and Internet penetration at about one million users, the unexploited potential of India's Internet market seems huge.

NASSCOM (National Association of Software and Service Companies) of India recently released the findings of its survey about the India Internet scenario at e-biz India 2000. The Internet survey was conducted in 68 cities and towns in June-July, 2000. These cities and towns constitute 92 per cent of the total Internet users in India.

The government of India favors development of this sector. According to Mr. Dewang Mehta, President of NASSCOM, "Over the last few months, the Government of India, especially the Prime Minister and his office as well as the Ministry of Information Technology have made several landmark decisions that have helped grow Internet penetration in India from a mere base of 170,000 subscribers in November 1998 to more than 1 million subscribers as on June 30, 2000

"The increase of over 8 lakh (0.8 million) subscribers in India in the last 20 months can be directly attributed to the private ISP policy announced by the Government of India."

Let’s start with the numbers and the growth projections. Then we’ll discuss some of the finer findings in the survey.

Table 1. Internet Growth in India (History)

Table 2. Internet Growth in India (Projected)

Other key ideas in the survey are:

Demographics

• There will be about 1.6 million Internet connections (or 5 million users) by March 2001. This figure is expected to increase to 4 million Internet subscribers (10 million users) by March 2002, and 8 million Internet subscribers (18 million users) by March 2003.
• As of 31 March 2000, there was a PC base of 4.3 million PCs. Of these, more than 3 million machines had Pentium chips and above (i.e. could be connected to the Internet).
• 91% of India's corporate Web sites are located overseas.
• Internet access continues to be most widespread amongst the 18-24 year age group. However, all age groups have seen vast increases in Internet use over the last 18 months. A significant development is that almost 11% of people over the age of 40 now access the Internet.
• Males continue to outnumber females on the Internet, at 77% compared to 23%. Women's share of Internet access has, however, increased from 18% in June 1999.
• Professional/corporate users account for around 43% of Internet usage, followed closely by the student community which contributes accounts for about 38% of Internet surfers.

Internet jobs

• The Internet and e-commerce industry employs approximately 82,000 people. These include Web developers, Web designers, system analysts, ISP infrastructure providers, marketing staff, e-software professionals, etc. It is projected that by March 2003, the Internet and e-commerce industry will employ over 300,000 people.

Internet use

• The emergence of competitively-priced Internet-capable mobile phone technology is an evolutionary development. India currently has a mobile population of 2.3 million (at March 2000).
• Internet users, on average, are estimated to be accessing the Internet for 6 hours a week.
• Over half (59.2%) use the Internet as an information resource, 11.3% use it as an educational tool and just under 8.2% use it for entertainment.
• When asked what are the most frequently used service online was, 73.4% answered email, 77% answered search engines, and 23% said they use it for downloading / uploading software.
• Among Internet users, around 20 per cent own credit cards and around 14 per cent own mobile phones.

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