The Growth In Internet And Telecom Users In India During Q2 2014 Disappoints

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The total number of internet users in India has reached to 259.14 million by the end of June 2014, an increase of just 7.55 million subscribers in three months (April – June). Besides, telephone subscribers in India has increased by 9.94 million during the same period, as per “Indian Telecom Services Performance Indicator Report Q2 2014” released by TRAI (Telephone Regulatory Authority of India), recently.

The report, which is compiled on the basis of information provided by service providers, gives an eagle’s eye view of the telecom services in India and charters their growth over the three month period mentioned above.

The number of telephone subscribers in India continues to register an increase as does the number of internet users and the amount of data used by them, though the figures look depressing when compared to the global average.

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The key findings of the report are:

  • As the number of telephone subscribers in India increased from 933.01 million at the end of March 2014 to 942.95 million at the end of June 2014, a growth of 1.07% was registered over Q1 and Y-O-Y growth rate of 4.41% was observed over figures for April- June 2013.
  • Overall tele-density in India increased marginally from 75.23 on March 31, 2014 to 75.80 on June 30, 2014. Telephone subscriber base and tele density in India trends
  • User base increased both in rural areas as well as urban areas. It went up from 555.28 million to 559.77 million during March- June 2014 period (an increase of 0.81%) in the urban areas while going up from 377.73 million to 383.18 million in rural areas during the same period (an increase of 0.32%). Composition of telephone subscribers in India Q2 2014
  • Urban and rural tele-density both improved from 145.78 to 146.24 and 43.96 to 44.50 respectively during this period.
  • The share of subscription in rural areas improved from 40.49% to 40.94% during the April- June period.
  • 10.41 million new mobile subscribers were added over Q2 2014, taking the total figure of wireless (GSM+ CDMA) subscribers in India from 904.51 million on March 31, 2104 to 914.92 million on June 30, 2014. That means a Q-O-Q growth rate of 1.15% and Y-O-Y growth rate of 4.76% for wireless subscribers in India.
  • Wireline subscribers in the country fell from 28.50 million at the beginning of the period to 28.03 million towards end of June, 2014- a fall of 1.66% over the previous quarter and a Y-O-Y decline rate of 5.72%.
  • While wireless tele-density rate for the period improved from 72.94 to 73.55, that of wireline subscribers fell from 2.30 to 2.25.
  • The number of internet subscribers in India went up from 251.59 million on March 31, 2014 to 259.14 million on June 30, 2014– a quarter over quarter growth of just 3%. Out of these subscribers, 18.55 million are wired internet subscribers while 240.60 million use wireless internet connections. Composition of internet subscribers in India Q2 2014
  • Broadband internet user base in the country has also increased from 60.87 million at the end of March 2014 to 68.83 million at the end of June 2014, a phenomenal Q-O-Q growth rate of 13.07%.
  • Narrowband internet user base in the country, however, has fallen from 190.72 million to 190.41 million. A fall of 0.31% over the previous quarter.
  • The Gross Revenue (GR) and Adjusted Gross Revenue (AGR) of telecom sector during Q2 2014 was 62919 crore and 43852 crore respectively, a Q-O-Q growth rate of 3.63% and 6.91% and a Y-O-Y growth rate of 9.88% and 13.49%.
  • At the end of June 2014, there were 797 private satellite TV channels and 243 private FM radio stations registered with the Ministry of I&B.
  • There were 67.57 million registered DTH subscribers and 38.24 million active DTH subscribers in the country on June 30, 2014.
  • Data usage per mobile subscriber per month has gone up to 62.16 MB for GSM and 192.99 MB for CDMA users, the total data usage being 70.10 MB.

Trends Observed

Seems anachronistic that TRAI is releasing its Q2 2014 figures at a time after most companies have released their Q3 results- a sad indicator how the government owned agencies function in India.

Though almost 70% of Indian population stays in villages, less than 21% of the total telephone connections are in rural areas. Urban areas, with less than 30% of the total population, account for more than 79% of the telephone subscriber base.

Tele-density has been improving consistently in both rural and urban areas but since the rate of penetration in rural areas is still very low compared to the urban areas, both private subscribers and PSUs need to focus on these markets.

While the wireless subscriber base is improving, wireless base is steadily declining. Similarly, as the number of broadband internet subscriber is shooting up, that of narrowband internet subscribers is taking a gradual dip.

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Internet penetration, which is one of the biggest parameters of growth these days, continues to be pathetically low in India.

India had only 259.14 million internet subscribers on June 30, 2014- the population of the country at the time was 1.26 billion which means an internet penetration rate of 20.44%. This seems more disappointing in light of facts that Internet penetration in United States, Germany, France, U.K., and Canada is as high as 80%.

Further, the total number of internet subscribers in the world by the end of June 2014 was put at 2.92 billion. That means India makes up for only 8.84% of the world’s internet subscriber base.

Internet users in the world

If we go by the statistics produced by InternetLiveStats, in 2014, nearly 75% (2.1 billion) of all internet users in the world (2.8 billion) live in the top 20 countries; The remaining 25% (0.7 billion) is distributed among the other 178 countries, each representing less than 1% of total users. China, the country with most users (642 million in 2014), represents nearly 22% of total, and has more users than the next three countries combined (United States, India, and Japan). Among the top 20 countries, India is the one with the lowest penetration: 19% and the highest yearly growth rate.

To put India at par with global superpowers, the internet connectivity in the country needs to be pushed up. A single digit quarterly growth rate of 3% can’t be justified when the country is bringing global recognition on eCommerce platform. Not only will a push in the rate of connectivity across the world wide web help improve India’s ratings and image at the global level but also give a huge fillip to the e-commerce sector which is completely dependent upon the internet reaching out to more and more people.

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