Growth Of Wired And Mobile Internet Access Markets In India: To Hit INR 149 Billion And INR 358 Billion In 2016 Respectively

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India is the world’s second largest country in terms of mobile subscription, despite internet penetration in the country is not up-to-the-mark. In March 2012, India had around 23 million wired Internet subscribers and among all, 14 million had broadband connections. However, wired internet subscribers increased by 3 million in March 2012 compare to a year ago, whereas broadband connections mounted up by 2 million from 12 million in March 2011. Besides, the size of mobile market also increased from about INR 45 billion in 2010 to INR 55 billion in the last year.

In addition to these, overall internet subscribers increased to 121 million in December 2011 compare to 100 million in December 2010. In July 2012, India had 944.81 million telecom subscribers (wireline and wireless), dropped from 965.52 million. By the end of July this year, there were 31.33 million wireline subscribers in the country, dropped 0.10 million compared to the previous month. Ironically, wireline subscriber base is declining month-over-month in the country. But this time, we are discussing about wired internet access in the country. In India, the main hurdle for wired internet adoption is huge investments on PCs and modems (plus installation charges) apart from monthly rentals, costing INR 500 to INR 1,000 even for moderate usage plan.

Mobile Internet Access In India:

In India, significant number of internet-enabled mobile handsets are available at the very affordable price tag, even lower than INR 5,000. The low price of handsets and budget-packed internet planning (provided by telecom vendors) are two main driving forces for mobile internet adoption in the country. Interestingly, almost half of web traffic in the country is being generated from web-enabled mobile handsets.


In most developed market including the U.S., U.K., Australia and Germany, adoption of fixed internet is quite high; these markets are approaching to saturation level of 70-80% household penetration. Internet penetration is expected to surge in India due to high adoption of 3G networks; India showed off 78% growth in 3G adoption in first half of this year due to drop in tariff rates.

Indian wired internet access market is expected to grow from INR 55 billion in 2011 to INR 149 billion in 2016, whereas mobile internet access market will hit the figure INR 358 billion in 2016 from about INR 61 billion in  2011, demonstrating a compound annual growth rate (CAGR) of over 40%.

Household Internet Penetration In India

However, the growth rate of Indian fixed internet market is slow, despite of this, number of household internet access will increase to around 43 million in 2016 from 20 million in 2011. On the other side, mobile internet access is expected to grow with dizzying pace from about 51 million in 2011 to approximately 400 million in 2016, a CAGR growth of over 50%.

Wired Internet Advertising Market:

Indian youth are spending more time on social networking sites and this is the main reason why internet advertisers are more focused on the platform (social networking) to entice specific customers segments. In June 2012, internet users in India spent 25.2% of their time on social networking sites, up from 24.4% in the same of the last year.

In India, wired internet basically comprises four types of advertisements: Search, Display, Classified and Video. Search advertising on the wired internet access dominated over other categories with about 47% market share (INR 4.7 billion) in 2011, showed off  30% year-over-year growth. On the other side, ‘Display’ and ‘Classified’ accounted for 26% and 25% market share in 2011 with revenue of INR 2.6 billion and INR 2.5 billion respectively in 2011.


In spite of these, wired internet advertising is still stuck with some sorts of limitation to reach wider audience. The main hurdle for wired internet advertising is language; In India, web contents are generally being provided in English language and there’s need to make content vernacular in order to reach wider audience. In addition to this, it has been noticed that wired internet users are not willing to click ads display (provided by publishers).

Increasing growth of smartphones and Tablets in the country are fueling mobile internet adoption. In India, there were about 27 million smartphone users in June 2012. More importantly, 11.2 million smartphones were shipped in the last year and 5.5 million units during six months period ended June 2012. Moreover, 1 million smartphones were shipped in just December 2011; It means 6.5 million smartphones were shipped in the country in the last seven months ended June 2012.

Image credit: PWC



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