12 FE SPECIAL: India’s mobile & Internet landscape

w w w. f i n a n c i a l e x p re s s . c o m

Friday, August 13, 2010

The Internet has to spread its wings to encompass the masses in India and enhance availability, accessibility and affordability for a start, says a JuxtConsult study on the ‘Indian Online Landscape 2010’
Ivinder Gill

EEPER, NOT wider, that’s the story of the Inter net in India. Existing users are accessing the net more, but not enough new members are signing up. A study by online research firm JuxtConsult puts the Indian online landscape in perspective. A survey of over 2.5 lakh people in 100 cities and over 1,000 villages in April-May this year on ‘online Indians and their net usage behavior and preferences’ reflects that Internet has permeated only 10% Indian households and only 4.4% Indians, as two-third households have multiple users. The increase in number of users has been only 8% over the past year,


Yahoo Gmail

11% 9% 6% 4%
Orkut Rediff Facebook


but among the users, 97% are using the Internet regularly and 79% use the net daily In another . words, the pond is not growing, but getting ‘fishier’. Users have increased more in smaller urban areas (with a population of less than five lakh) and, in fact, account for half of all urban Internet users. The souther n part of the country has been found to be more net-savvy Also, home continues . to be the largest single place of access at 53%. However, for Internet to reach to the masses, factors such as availability, accessibility, affordability, relevance in day-today life, simpler/less technical operability and language comfortability need to be addressed. Also, for existing users, connectivity speed and content have , to be enhanced.

Popular online activities
% Internet users undertaking Emailing Download music Instant messaging / chat Job search PC to Mobile SMS Social Networking Info search Engine Watch Videos 94 72 56 56 55 54 52 50 Top website Gmail Songspk Gtalk/Gmail Naukri Way2sms Orkut Google YouTube

51 mn active Internet
users; 40 mn urban and 11 mn rural

97% regular users; 79% use daily 23% access it on
mobile phones Social interactivity platforms put together account for 81% of all regular internet users

Average number of online activities undertaken per person: 17
Source: JUXTconsult

For instance, ‘social interactivity’ has been found to be the mainline Internet activity, but it should not be confused with ‘social media’. What has gained importance is mainly personal and professional interaction and sharing (social networking, professional networking,

communities) and not necessarily discussion, debates or commenting (blogs, product reviews, forums, etc). Social interactivity platforms put together account for 81% of all regular Internet users, which is up 13% over last year. However, blogs still lag behind with just

53% access Internet
at home a 29% readership. Also, the net is increasingly being seen as a medium of entertainment, with

music downloading, PC to mobile sms, videos, movies and screensavers/wallpapers gaining noticeably. Ironically, despite the Internet’s unmatched possibilities as a marketing medium, it largely remains a window shop for Indians. The base of online buyers has been hovering around just one in five for the past two-three years. It is equally ironical that ownership of credit cards among online Indians is also around one in four for the past couple of years. As for access through mobiles, it is essentially an urban phenomenon and that, too, involves dual access to the Internet through PCs as well. So even if access on mobile phones has tripled in the past year, with 23% users, most of them use computers as well.

2.4% 1% 1%

Moneycontrol YouTube Blogspot

0.8 %

0.7 %
*Figures are % of Internet users accessing sites Source: JUXTconsult

Too good to ring true
Ivinder Gill HAT MOBILE use in India is on a high growth curve is given, but how ‘real’ is mobile growth in India? Not very, if one were to consider that despite an overall 61% household-level penetration, only 26% Indians are active users. These figures, thrown up in a survey undertaken by online research firm JuxtConsult in April and May this year, profiling ‘mobile phone users in India and their mobile usage behaviour and preferences’, tell the story of a high-stake game. ‘Overbuying’ by consumers or overselling by the mobile industry has resulted in “too many connections from too many operators chasing too few customers in too short a time period”. The survey covered over 2.5 lakh people in 100 cities and over 1,000 villages, Against an exponential growth in mobile subscription numbers every year (TRAI’s latest figures peg mobile users in India at over 600 million, almost 50% more that 400 million in May 2009), the question of at least one in three connections not in active use stares us in the face. With almost two-third mobile using households still being ‘single mobile user’ households, there is still a large play area available to increase the user base and penetration

Overselling is making the mobile space highly crowded in India, with the high tele-density hiding the real picture—that of millions of inactive connections, reveals a JuxtConsult survey, ‘India Mobile 2010’ Service providers
Airtel Vodafone Reliance IDEA BSNL Tata Teleservices Aircel 27.7 15.6 15.1 13.1 10.6 7.7 6.9


‘Active’ multiple connections
Subscribers Subscriptions (%) (%) 28.0 15.3 15.0 13.0 10.7 7.5 6.8

Handset brands
% of total active mobile handsets
All India (%) Nokia LG Samsung Sony Ericsson Micromax Motorola 62.2 10.2 9.2 3.6 1.6 1.6 Urban (%) 65.2 10.3 7.7 3.2 1.0 1.8 Rural (%) 59.1 10.0 10.7 4.0 2.3 1.3

Source: JUXTconsult

in use are between the price range of Rs 1,500-3,000. Clearly Indian mo, bile users are budget buyers and ‘need-driven’ upgraders at their core. While a mobile is a communication medium, it is also a device for entertainment, particularly music. However, the percentage of Internet users on the mobile is still 4%, despite 16% being Internet users. Even within this 4%, most of them use other means of accessing the Internet as well and only one in 25 mobile users surf the Internet on the mobile.

304 mn mobile subscribers, 355 mn active connections
Average mobile users per household: 2.05; average active mobile connections per user: 1.17 Household-level penetration of mobiles: 61%; individuallevel penetration: 26%

50:50 split of mobile use in
urban and rural areas
of mobile phones than to focus on multiple connections and increasing tele-density. For this to happen, the spotlight must shift on the user

and not on the connection. Interestingly, the study found that more than half of all multiple active connection mobile users come from rural areas. It was also found that the urban-rural split of mobile use at both the subscriber level and the active connection level comes close to 50:50, against TRAI data that indicates a 75:25 split at the overall mobile connections level. Thus, given the mass appeal of mobiles, the study indicates an eventual shift toward the hinterland. When it comes to mobile handsets, the mass acceptance of mobile phones is reflected in the fact that almost half of all handsets

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