~IAMAL

and Mobile Association of India

About Internet and Mobile Association of India (IAMAI)

The Internet & Mobile Association of India (IAMAI) is a not-for-profit industry body registered under the Societies Act, 1896. Its mandate is to expand and enhance the online and mobile value added services sectors. It is dedicated to presenting a unified voice of the businesses it represents to the government, investors, consumers and other stakeholders. The association addresses the issues, concerns and challenges of the Internet and Mobile economy and takes a leading role in its development. The association's activities include promoting the inherent strengths of the digital economy, evaluating and recommending standards and practices to the industry, conducting research, creating platforms for its members, communicating on behalf of the industry and creating a favorable business environment for the industry. Founded in January 2004 by leading portals in India, IAMAI in the only specialized industry body in India representing the interests of online and mobile value added services industry.

Contact Details:

Dr. Subho Ray, President, IAMAI

406, Ready Money Terrace, 167, Dr Annie Besant Road, Mumbai - 400018 Tel: +91-22-249545741 Fax: : +91-22-249359451 http://www.iamaLin

About eTech Group IIMRB

eTech Group IIMRB (a specialist unit oflMRB International) is a research based consultancy offering insights into IT, Internet, Telecom & emerging technology space.

Our continuous link with industry and a constant eye on the pulse of the consumer ensures that we can decode the movements of technology markets & consumers. To our clients we offer an understanding of the present market environment and a roadmap for the future.

Contact Details:

Research team forthis report:

eTech Group IIMRB IMRB International

'A'Wing, Mhatre Pen Building Senapati Bapat Marg, Mumbai

Balendu Shrivastava, Group Business Director

TarunAbhichandani, Insights Director

Rohit Gangwal, Research Manager

Tel(91 )-22-24233902 Fax: (91 )-22-24323900

Varsha Gupta, Associate Research Manager Contact us:

www.imrbint.com

TABLE OF CONTENT

Details

Page number

Objectives of the report Introduction

Glossary of terms used Internet growth in India

1A. Urban Internet users: Year 2009 lB. Growing urban Internet population

1C. Internet services reaching far and wide 10. Pervasive Internet penetration

1E. Youth driving Internet usage

2 2 3 5 5 6 7 7 8

9

10 10

10 11 11 12 12 12 13 13

2. Internet Users Exploring Different Access Points

3. Important Internet Applications

3A. Various purposes of accessing Internet

3B. Preference of online services across demographic segments

3C. Internet is gradually becoming a routine for users

3D. Internet gaining acceptance in daily lives

Annexure: Study Methodology & Sampling procedure

i). Target segment and city selection

ii). Sampling procedure

iii). Face-to-Face interview procedure

iv). Sample size of households & individuals covered for profiling

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Inhlmel and MobiI.Aaociation of India

OBJECTIVES OF THE REPORT

"'- This report is a part of a syndicated study conducted annually by eTech Group I IMRB International in association with Internet and Mobile Association of India (IAMAI)

.'rI The report aims to map the growth and the characteristics of Internet usage in India

.'rI It surveys the details of Internet use in India among different demographics and geographic segments over a period oftime

.'rI It captures data on various applications and services used overthe Internet through various points of access

"'- Internet in India [I-Cube] reports are based on a primary survey conducted

"'_ Across 31 cities

.'rI Among 19,000 Households and 68,000 individuals

.'rI 1000SMEsand

.'rI 500 Cyber Cafes

"'_ This extensive exercise makes the study one ofthe largest primary research in the Internet domain in India.

INTRODUCTION

.'rI There has been a steady growth of Internet use in India. The penetration rates, however, continue to be relatively low at 24% ofthetotal urban individuals .

• 'rI The Internet has reached the remote urban pockets (small metros and towns) and is being actively used by lower socio-economic groups (SEC C, D &E). This development has been more striking this year as the combined usage of these geographies and classes have overtaken top cities and higher socio-economic classes in numbers .

• 'rI Youth continues to drive the surge in Internet use and form major portion of the total users. Among youths, the Internet is primarily being used for searching general information and for entertainment.

o'rl While the traditional avenue (Cyber Cafe) of accessing Internet continue to remain strong, a definite pattern of using online services through mobile phones and kiosks is emerging.

o'rl Internet is increasingly being used for entertainment - including downloading music or videos, socializing through social networking sites (Facebook, Orkut) and expressing one's own opinions and views through microblogging (Twitter) and user-generated content (Wikipedia, Video and photo sharing sites).

o'rl With more such kinds of services on offer such as the recently launched Google Buzz, interesting pattern of usage could occur in the coming yea rs.

Given the limited options for speed and bandwidth, the industry is eagerly awaiting 3G auctions by the regulators. With improved options, Internet usage is expected to register accelerated growth.

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Inhlmel and MobiI.Aaociation of India

GLOSSARY OF TERMS USED

Active User: An individual who has used the Internet at least once in the last 1 month.

Claimed Internet User/Internet Ever User: An individual who has used the Internet at any point in time in the past. This gives us a clear indication as to how many Indians have experienced Internet at least once in their lifetime.

Internet Non -Owner: An individual who belongs to a household which does not own an Internet connection.

Internet Non - User: An individual who has not accessed Internet at any point in time.

PC Literate: An individual who knows how to use a Pc. While this term does not signify the extent of PC usage, it means that a computer literate is able to work on a PC without assistance.

Socio-Economic Classification (SEC)

A Classification that indicates the affluence level of a household to which an individual belongs. SEC is defined by the education and occupation of the chief wage earner (CWE) of a household. SEC is divided into 8 categories - A1, A2, B1, B2, C, D, E1, and E2 (in decreasing order of affluence).

~IAMAL

Inhlmel and MobiI.Aaociation of India

GLOSSARY OF TERMS USED

Top 4 Metros:

The top 4 cities in India in terms of population. i.e.

Delhi, Mumbai, Kolkata and Chennai

Small Towns Towns with population of less than 0.5 million.

,

,

"h~><;.i", ~ .. ~ Kids studying in school and above 8 years of age. They are in the

age group of 8- 17, although, a small proportion could be over 18 years.

Non Metros Towns with population between 0.5 million to 1 Million.

Young Men

Men in the age group of 21-35 years who are not school or college-going students. This segment includes all those who are

employed as well as unemployed.

Non Working Women

Women in the age group of 25-58 years of age and are not working. This segment includes housewives as well as non-working young women who are not school or college-going students

~IAMAL

Inhlmel and MobiI.Aaociation of India

, , r ,

:' Working Women

/ Women in the age group

/ of 21-58 years and

:' employed outside home

, ,

Other 4 Metros:

The next top 4 cities in India in terms of population. i.e.

Bangalore, Hyderabad, Pune and Ahmedabad

Small Metros:

Cities which are not a part of top 8 metros but have more than 1

Million population.

, , , , ,

/ College-Going Students

r

/ Youths studying in college

, (graduate, post-graduate and doctoral). Most students are in the

age group of 18-25, although, a small proportion will be below 18 and over 25 years.

Older Men

Men in the age group of 36-58 years employed or otherwise.

I. INTERNET GROWTH IN INDIA

lA. URBAN INTERNET USES: YEAR 2009

Total Population'" 818 Mn* Urban Population'" 266 Mn*

Urban Literate Population'" 217 Mn* Total English Knowing'" 91 Mn*

Total Computer Literate'" 87 Mn

March 2009

Urban

Claimed Internet users ",63 Mn Active Internet Users ",46 Mn

Se~te,m~berr 2009

1!!11~~Jj1l

©:ai,Ij1\l,~d tlj1,t@I)l,~~ W~EM% r,v.,Q:!lrlll:l)ll ~!£~116~ tl)l,t~m"~1£ I!!~~$; %!2:~r)II:l)ll

"-""'-""'-""'-""'-""'-""'-""'-,

: ·Source: NRS 2006 :

i (Population with 12 years i i of age and above) i

1 ••••• _ ••••• _ ••••• _ •••••• _ •••••• _ •••••• _ ••••• _ •••• 1

Nearly 25% of Indian population stay in cities. Out of which, 32% of them are PC Literate. Of the PC Literate population, 72% claim to have used Internet. Of these claimed users, 73% are actively using Internet (have used Internet in past 1 month). The penetration of Internet usage is low at 24% (Claimed Internet Users/Urban Population) among urban individuals.

~IAMAL ------ m ------

Inhlmel and MobiI.Aaociation of India

lB. GROWING URBAN INTERNET POPULATION

PC Users have increased from 72 Mn in 2008 to 87 Mn in 2009. The reason can be attributed to penetration of PCs in smaller towns and lower SEC classes.

With increasing affluence and literacy levels, people are gradually getting acquainted to the third screen.

42

31

53

• PC Literate

59

62

65 72

85

87

95

• Claimed Internet Users

63 71 57

42 46 50

32

5

9 12 16

PC Users have increased from 72 Mn in 2008 to 87 Mn in 2009. The reason can be attributed to penetration of PCs in smaller towns and lower SEC classes.

With increasing affluence and literacy levels, people are gradually getting acquainted to the third screen.

Claimed Internet users increased by 20% from September 2008. This growth is higher than what has been witnessed in the past years.

Today, every telecommunication provider is providing internet service packaged with other services at affordable rates. With sprawling cyber cafes and easy availability of broadband connection, Internet is now in reach of common individuals.

• Active Internet Users

52 42 46

29 32 36

21

2

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~IAMAL ------ [!] r,"'-~~ • e-

Inhlmel and MobiI.Aaociation of India

lC. INTERNET SERVICES REACHING FAR AND WIDE

From 5% in 2000 to 36% in 2009, Internet has surely made an impact in lives of small town.

Given the continuous growth of Internet users overthe years, the smaller towns have overtaken Top 8 Metros in Internet Usage. This clearly indicates that the Internet has reached to remote masses in urban India.

Increasing number of Cyber Cafes and government initiatives of e-kiosks has created interest among small town people.

The presence of the Internet is widespread, however, given the limited numbers it falls shortofbeingan all-pervasive medium.

Base: All India Internet Ever Users (Urban) (All figures in Million)

_ Top 8 Metros _ Other Metros _ 5-10 lakh towns _ less than 5 lakh towns

5 Mn 9 Mn 12 Mn 16 Mn 32 Mn 46 Mn 50 Mn 63 Mn

2000 2001 2003 2004 2006 2007 2008 2009

• SEC D&E

2007

2008

2009

10. PERVASIVE INTERNET PENETRATION

Base: All India Internet Ever Users (Urban) (All figures in Million)

2000

2001

2003

2004

2006

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Inhlmel and MobiI.Aaociation of India

Internet is gradually penetrating among lower SEC groups. SEC C, D and E combined together account for 35% of the Internet user population which is more than SEC Aan encouraging sign towards wider adoption of this medium. The share of SEC B has remained constant overthe years .

Such increases can be attributed to higher literacy rates, easy availability and affordability of Internet access.

Though lower SEC grou ps form considerable part of the Internet users, penetration among them is still low given that there is a high population base in these classes compared to higher SECs. Internet surely has long way to go to make an impact to their lives.

lE. YOUTH DRIVING THE INTERNET USAGE

School and college students contribute 44% of the internet usage. Along with young men, they account for 72% of Internet usage.

Although Internet growth has seeped into lower SEC classes and smaller towns, youth still continue to drive the Internet usage as traditionally they are the early adopters of any new technology.

Students mostly use Internet services for educational information search and entertainment.

To sustain this growth, more projects like Hole-in-the-wall, Sarva Siksha Abhiyan (SSA) and One Laptop Per Child (OLPC) that aim at disseminating computer education among youth should be developed.

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Inhlmel and MobiI.Aaociation of India

• School Going Kids .VoungMen

• Working Women

• College Going Students .OlderMen

• Non Working Women

Base: ActIve Internet User{Urban) 2009:31 Cities

2008:30 Cities

2006: 26 Cities

2004 :22 CRies

2000-2003 :16 Cities

2001

2003

2004

2006

2007

2008

2009

2. INTERNET USERS EXPLORING DIFFERENT ACCESS POINTS

A large proportion of users access Internet from office and cyber cafe. Cyber cafes continue to dominate the share (37%) among various sources. However, accessing Internet through homes has steadily declined overthe years.

This also indicates that although the number of cyber cafes have shrunk in Metros, users in small towns still access Internet mainly through this public avenue. As more businesses adopt Internet as their key infrastructure, accessing Internet through offices continue to rise.

This year an interesting pattern has emerged with 4% of users accessing this medium through alternative sources such as Mobiles and Kiosks. In future such access is largely dependent upon the telecom regulation and environment in the country.

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Inhlmel and MobiI.Aaociation of India

Bas.: Active Internet User(Urban)

2009: 31 Cltl.s, 2008: 30 Cltl.s, 2006: 26 Cities, 2004: 22 Cities, 2000-2003 :16 Cities

_ Cyber cafe _ Home _ Office _ School/College _ Others

2000

2001

2003

2004

2006

2007

2008

2009

IMPORTANT INTERNET APPLICATIONS

3A. VARIOUS PURPOSES OF ACCESSING INTERNET

2008 Purpose of Internet access 2009
;
E-mail
.... -
76 General information search 8
" ......
49 Educational information search 6S
"4;-.'"
32 Music/Video on the Internet
.......... ill ",,'
46 Text Chat 40

37 Online Jobsites 33
,."" ........
41 Online Gaming • 33 I '
21~ , '
...... ,. .-
Financial information search 24
21~
Book railway tickets on the Internet [==::J 18

13~ Base: Active Internet Us
Online News [::::::J 16 2009:31 Cities
13~ 2008:30 Cities
Internet Telephony/Video Chat/Voice Chat [:=::J 14
20~ ........
Online banking I:::¢ 12 I .. ~
................ 91

1 t

er(Urban)

Internet as a medium for socializing and leisure activities like downloading music and videos are gaining space compared with other services. Searching education-related information has increased substantially compared to the previous year. This could be due to the availability of academic materials from education boards such as CBSE eBooks and also the recent introduction of online examinations for centralized tests such as CAT.

38. PREFERENCE OF ONLINE SERVICES ACROSS
DEMOGRAPHIC SEGMENTS
Base: Active Internet User(Urban)
Overall, there has been a gradual shift in 2009:31 Cities
2008:30 Cities
preference of online services across 2006: 26 Cities
demographic segments. Email service has gone • Email • Chat • Information 2004 :22 Cities
• Entertainment • E- Commerce • Others 2000·2003 :16 Cities down In all the segments.

As working professional access is mainly through office, they tend to utilize Internet for communication and searching various types of information. To a limited extent, they also indulge in E-Commerce services.

Expectedly, school and college students use Internet for searching information and for entertainment purposes.

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Inhlmel and MobiI.Aaociation of India

All 31 Cities School Going College Young Men Older Men Working Non Working

Kids Going Women Women

3C. INTERNET IS GRADUALLY BECOMING A ROUTINE FOR USERS

Almost half of the Internet

users are online at least 4-6 • Daily times/week.

.Once a week

Base: Active Internet User(Urban) 2009:31 Cities

2008:30 Cities

.4-6 times/week • 2-3 times/week 2006: 26 Cities

.2-3 times/month • <once a month 2004 :22 Cities

Internet plays an integral role in daily life. Ranging from communication to shopping, a huge gamut of activities are just a click away. This has led to increased frequency of Internet usage among Internet users.

With more businesses adopting Internet, working population accesses Internet at least 4-6 times/week. However, students usually access this medium at least once a week.

2000-2003 :16 Cities

2000

2001

2003

2004

2006

2007

2008

2009

3D. INTERNET GAINING ACCEPTANCE IN DAILY LIVES

Internet usage has gone up from 9.3 hrs/week to 15.7 hrs/week i.e. a steep 70% rise.

Base: Active Internet User(Urban) 2009:31 Cities

2008:30 Cities

2006: 26 Cities

2004 :22 Cities

2000-2003 :16 Cities

...... Average hours/week

Internet is percolating into the daily lives of people. The reason can be attributed to innovative content delivery, better applications and their increased popularity.

Primarily, ease of communication and obtaining information

15.7 on wide-ranging aspects are compelling users to hook onto the Internet. Downloading music, videos and socializing through Internet have become popular among young generation.

With rising usage pattern, in the near future it will be interesting to see how Internet as a media emerges in comparison with Television and Radio.

2001

2004 2006

2008 2009

2003

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Inhlmel and MobiI.Aaociation of India

2007

ANNEXURE: STUDY METHODOLOGY & SMAPLING PROCEDURE

i). TARGET SEGMENT AND CITY SELECTION

.,y For sampling purposes, we extensively used the previous rounds of the I-Cube reports that have laid down the universe of the Claimed and Active Internet Users in the country

.,y Census of India 2001 indicates that there are 35 Cities with more than 1 Million population in India. In this round of survey, we have covered all the top 8 Metros as well as other 23 cities

.,y Below are the cities that have been covered in this research:

Cities by Strata
Top 4 Metros Delhi, Mumbai, Chennai & Kolkata
Other 4 Metros Bangalore, Hyderabad, Ahmedabad & Pune
Small Metro Patna, Cochin, Baroda, Lucknow, Ludhiana, Coimbatore,
(More than 1 Million Pop.) Jaipur, Indore, Surat, Nagpur, Bhopal, Vishakapatnam,
Faridabad
Non Metro Guwahati, Bhubaneshwar, Raipur, Chandigarh
(Between 0.5 to 1 Million Pop.)
Small Town Kolhapur, Bellary, Thrissur, Panipat, Gurgaon, Noida
(Less than 0.5 Million Pop.) ii). SAMPLING PROCEDURE

Iff- Quota sampling procedure was followed to cover households belonging to SECA, Band C category in each of the 31 cities short-listed and SECA, B, C, D & E in each ofthetop8 metros

.,y Selection of households was made based on random starting addresses identified from electoral rolls

.,y Care was taken to ensure even geographical spread in identifying the starting addresses across the cities selected

eY Based on this household survey, we managed to profile individuals in terms of age, gender, occupation, education, computer knowledge & Internet use

eY From all the individuals in household, we asked the question eY Whether they have used PC

III_ Whether they have used Internet ever

III_ Whether they have accessed Internet in last one month.

eY We identified those saying "Yes" to all the above as an Active Internet User. These Active Internet Users were administered the detailed interviews for Internet Usage

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Inhlmel and MobiI.Aaociation of India

1121 --------------------

iii). FACE-TO-FACE INTERVIEW PROCEDURE

LISTING QUESTIONNAIRE

__ ------------~)l---------------- __

( 1

iv). SAMPLE SIZE OF HOUSEHOLDS & INDIVIDUALS COVERED FOR PROFILING

Cities Households Individuals Cities Households Individuals

Mumbai 1090 4230 Surat 513 1886

Top 4 Delhi 1096 4031
Nagpur 519 1990 Small
Metros Kolkata 1212 4263
Bhopal 516 2033 Metro
Chennai 1078 3748

Bangalore 932 3241 Vishakapatnam 512 1712

Hyderabad 926 3462 Guwahati 500 1731
Other 4
Metros Ahmedabad 904 3171 Raipur 500 2023 Non
Bhubaneswar Metro
Pune 850 3135 499 1752
Patna 513 2187 Chandigarh 507 1712
Cochin 536 1874 Kolhapur 440 1512
Baroda 512 1656 Gurgaon 180 638
Lucknow 512 2075 Noida 182 469
Small Small
Metro Ludhiana 512 2046 Towns
Bellary 430 1512
Coimbatore 512 1763
Jaipur 515 2095 Thrissur 443 1510

Indore 514 1729 Panipat 443 1695
Faridabad 249 769 Total 18,647 67,650 ~IAMAL ------ [!!J ------

Inhlmel and MobiI.Aaociation of India

© IAMAI2010 Printined and published by

Published By:

Dr Subho Ray, President, on behalf of Internet and Mobile Association of India, 406 Ready Money Terrace, 167, Dr Annie Besant Road, Worli, Mumbai 400018

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