Why mobile Internet in India won’t boom anytime soon?

Haven’t we all been hearing that the Internet boom in India is waiting to happen. We will soon get past the tipping point. We just need to overcome a few barriers. So what are these barriers?  About 10 years ago, it was the lack of a broadband policy, expensive computing. Five years ago lack of availability of inexpensive broadband access.  Finally, the advent of smartphones, it is believed would help India cross both hurdles of access and affordability. I remain skeptical.

I believe all these arguments have focused on the availability of technology itself, not how or why it is expected to be used by the people. It is overtly simplistic to assume that just because more and more mobile users have Internet enabled phones, they would take to the mobile Internet. This may remain a fond hope.

First, lets talk about the cellphones. No one in India or worldwide had expected cellphones to become ubiquitous. Far from it, they were thought to fail. Yet they found their most enthusiastic customers (surprisingly for some) in emerging markets of Asia and Africa, and not the US or UK. To me this was quite unsurprising.

Let’s examine the case of India. There were less than 20 million phones  in the country at the time cellphones first arrived ( a teledensity of about 1  in 1995-96). This is 100 years after the first telephone exchange was setup in the country.  The low teledensity was not because people did not want or could not afford telephones. Most people wanted one, and that too badly.  With one state owned provider, you had to wait years ( often decades) to get a connection ( we got ours in 1994 after applying in 1985 because we were high priority customers, my parents being doctors).

Why did everyone want a phone?  Because everyone had seen it being used. A worker at a grocery store and a restaurant had seen it being used by his owner. A clerk had seen it being used in his office. Even housewives had more than once flocked to STD /PCO booths to convey important messages. The phenomenal success of STD/PCOs in the late 80s and early 90s made every Indian aware of what the telephone can do.

The entry and falling prices of mobile phones was then a sweetly timed co-incidence with the need for a telephone. What more, no waiting lists, no favors to be offered to linesmen, yet you could within days ( or hours) get a working telephone. Soon, everybody knew somebody who had a telephone or a cellphone. Hence 100 years after its first introduction in the country, people were able to get a device they longed for. A device that enabled even the illiterate to communicate! They indeed embraced it, that too in no insignificant measure.

That this burgeoning cellphone population would start accessing Internet on mobile phones is a fairly rational thought. Accessible, affordable and reliable services further the case. Yet, there is one catch.

Unlike  phones, most haven’t longed for the Web. Do they even know what the Internet is or what can it do for them? The computer for them is a device that banks maintain ledgers on or people in big offices use for some official work, or some students use in colleges. Everyone they talk to or want to talk to has a cellphone. By contrast 9 out of 10 people do not use the Internet, fewer use it more frequently than once a month.

Then what about the claim that companies such as Facebook claim that a large chunk of their users (even in India) use the service from mobile devices.  These claims may be perfectly valid. However, how many of these users began using the Internet on their phones? My understanding suggests that most mobile web users are people who are already introduced to the Internet on a regular device, and use the mobile Web in addition to surfing the Web on the computer.

Agreed, for many the phone may have become a primary device for Internet access. However this does not mean that those who remain unexposed to computers and consequently the Internet, will also start using web services on their phone. They have to have the need for that service in the first place. How we develop that need is a matter of another post.Till then, good luck to all those waiting for the Internet in India to boom!


Author: harshT

Assistant Professor

7 thoughts on “Why mobile Internet in India won’t boom anytime soon?”

  1. There are three parts to growth of mobile internet growth in any country
    1) Devices (Handsets/tablets)
    2) Telecom infrastructure & data speeds
    3) Content & Services

    India today is suffering from the lack of devices that can actually deliver quality mobile internet experience. For all the talk of 900 mn mobile users, there are hardly 40mn active mobile internet users in India on a monthly basis. The rural population of India is close to 833mn but has only 3.6 mn active mobile internet users.. even the urban India doesn’t fare too well. (reference: http://www.iamai.in/Upload/Research/9320123264601/ICube_2012_Rural_Internet_Final_62.pdf ). My one hypothesis is that we’ve had a decent desktop penetration of 40-45 million active internet users is because of IT and ITeS services alone employing 10 mn people in India – who use internet connected computers at work and then come back home and probably desire the same experience (http://www.ibef.org/industry/IT-ITeS.aspx ).. If we remove this entire organized workforce population, the desktop numbers too would fall drastically.

    Even in case of US, the mobile internet boom didn’t happen till iPhone was developed – though the 2nd and 3rd parts – telecom infrastructure and content (even if in form of VAS) were existing for quite some time. iOS and Android are amazingly brilliant platforms compared to earlier platforms that they instantly start showing their value to a user – and thus the reason for amazing mobile internet growth in US and elsewhere.

    Since I myself handle marketing for one of the leading mobile apps in India (One Browser – http://www.one-browser.com ) for which we’ve generated over 30mn downloads in India in last 9 months alone.. I have slightly better understanding of mobile in India. Around 80% of Indian mobile users are still on java phones – so even if they want to.. the experience of mobile internet along with 2G speeds would never be better and hence, not much usage beyond a point.

    Android is the shining star in Indian smartphone system but even there.. we don’t have over 10-12 mn Android phones in India as of today. Assuming only 60% of these would be having data active on their phone (this can look extremely stupid to people like us.. but that’s the truth – a lot of Indians just use these shiny gadgets as phones with nice touch screens and camera only). iOS is mostly dead because of price point issue and doesn’t have more than .5 million users. Rest all don’t even matter in mobile internet discussion because of negligible presence (Windows) or poor experience (Blackberry/Symbian).

    So, overall – we don’t have more than 7-8 million proper smartphone users in India. Even there.. the cheapest of the branded lot – the “Samsung Galaxy Y” phone at price Rs. 6500 has close to 35% of Indian Android market share. Wish all you want.. but a $120 phone can never deliver a fabulous experience to you.

    Okay.. enough of negative part. Here is the positive news – these 7mn smartphone users are hungry consumers of content similar to how they’re elsewhere.. and even on my browser platform.. I can tell you that an average Android user consumes thrice the amount of data and content compared to their counterpart java user.

    I agree that there isn’t enough killer content in Indian market that one can actually consume 2-3 GB of data on phone. Because of a price sensitive cultural bias, most of urban SEC A/A+ Indians tend to use their desktops and laptops at home/work to download heavy files and play videos. But as we have better apps/services developed along with lower pricing of 3G data, more and more users would start realizing the value.

    Also, the Telcos in India need to stop making fool of Indian users by charging them arbitrary VAS amounts for random clicks – which tend to create lot of mistrust in the minds of consumers.
    Facebook has 65mn users in India and 30% of them are exclusively on moblie – and this is because I know that on facebook, I can connect with my friends and also that I wouldn’t be charged any random amount if i click anywhere on page.
    http://techcrunch.com/2012/10/17/from-zero-to-talktime-hero-facebook-tests-a-new-way-to-sign-up-users-in-india-offering-1-mobile-voice-credits/ )
    This is not the case with most other content sites in India where a lot of ads that are running (targeting the java users) are for VAS services where you get charged Rs. 30-50 subscription service as soon as you click on the ad.

    At the end.. this whole question depends upon availability of good quality devices at affordable price points (say having a phone of the quality of Galaxy S2 at Rs. 5000-6000). There are indications of some good things happening since MTK, the chinese chipset manufacturer major, has recently created a dual core chipset for Android at $200, but I personally think that’s still beyond the reach of most Indians even though Karbonn and Micromaxx of the world would definitely try their best to push these to as many Indians.

    The day the device problem solves, the question of growth story would answer itself. Other answers on this forum about lack of content etc. are important but in my view, not the key impediment.

    1. Hi Himanshu
      You have spoken like what we in technology “studies” ( not sciences) call a determinist – let the device problem solve – rest will all resolve! It is true for devices when their need is socially embedded. The experiment by Facebook that you linked to is precisely the kind of infrastructure that will to borrow abhijit’s term “socialise” this need.

      Finaly, when you make that iphone argument the key point you forget is that all those Americans and others already knew, were using and needed the Internet. iphone just gave them a device that they could use to access it anywhere.
      This is unfortunately the difference between mobile Internet in the Western World and India. We need original strategies for first time web users to use it on mobiles

      1. Hi Harsh,

        We’re approaching it from different point of views. You’re saying “Why should a consumer use mobile internet when there are not interesting services/apps for fulfilling Indian consumer needs”. I used to agree with that notion.. but increasingly, I’ve started believing it’s the device problem.

        Let’s break the problem into two parts. The services that work the best in Indian mobile market till now such as Google search, Gmail, Facebook etc. are strong need based information/communication services which work across platforms and devices – and hence, have gained acceptance. Google India says that today it receives 45% of its search queries from mobile these days, Facebook says 30% of Indian users are accessing it exclusively on mobile only. So, essentially it’s the “Information and Communication” category of services which have worked well in Indian market. That’s the reason information/communication services such as Cricinfo, News sites – Yahoo, TOI etc., Naukri, Olx are doing okay on mobile – since these are not mostly limited by Devices capabilities and they’ve a strong information based lever to attract audiences.

        But the services built around “Entertainment and Commerce” category would have to wait a bit to properly utilize and benefit from smart devices penetration. So, services such as
        1. Music – Dhingana, Saavn, Gaana, etc.
        2. Movies and Video – Bigflix, Youtube, Vuclip etc.
        3. Ticketing & commerce – e-commerce players, Bookmyshow, mobile recharge players such as Paytm
        4. Gaming – Smart gaming apps (Angry Birds, Temple Run) and platforms – Zynga, etc.;
        would have to wait a bit before the market explodes (may 2-4 years). Till then, these services can keep focussing on building their brands and audiences.

        This is my overall argument: Information and Communication services are okay and they will continue to grow audiences. But by their very nature itself, you don’t need information services all around the day.. you use them sporadically. Communication is totally ruled by facebookcurrently – though lot of players (including us) would try hard to crack this market.

        The other category of Entertainment/Commerce services is what actually hooks audiences to a any particular medium (70-80% of the apps downloaded on Android/iOS are Games) – and mobile is not delivering on that as of today in India. Even advanced information/communication apps such as Maps, need smart devices for delivering best value.

        You might say that US and India are different markets but I don’t agree. The human nature and value that one derives from mobile services are essentially same… Yes, I agree with you that we need services that cater to local problems of India but, I’d say that enough amount of services already exist in the system – and still we only have 40 million monthly active users on mobile.

        If according to you, devices is not the problem – then why Android users – who are using more or less the same services as their java counterparts – are using 3-5 times data than them?

  2. I think what you intend to say is that web-based ‘interaction’ – commercial or otherwise – will remain miniscule and will not bring in new users but serve only those who already have accessed it before through other older devices. Agree.
    But we should here differentiate between internet and www. The mobile internet boom is waiting to happen – what has held it back till now is the technology. As we move to technologies promise faster internet connectivity, mobile phones become more interactive, and people more ‘aware’ (and not merely literate), internet boom will happen.
    But the boom will not happen in terms of online shopping or farmers looking up at market prices. It will be – as you correctly said – driven by what is needed today. I will use it for zomato-meets-google maps-meets-facebook kind of thing. Others for storing data on clouds. Still others for video conferencing. Companies for tracking their fleets and making their salesmen report market orders through cellphones. It neednt always be through the web.
    The only thing that can limit this boom is the government – its speed, investment in infra and ablity to take policy decisions.

  3. Harsh completely agree with your POV on the internet penetration not booming anytime soon in India. I sit through multiple presentations on why we should be increasing our spends on Digital as it is expected to be the next big thing. The next big medium in India where users will consumer content. However, every time I am out talking to consumers the learning is totally different. Lot of of them don’t know what to do on the internet apart from log in once in a while on their Facebook accounts that their daughter/son created. There is hardly any consumption of content happening among this section of people. Even SMS is hardly used by them.

    Ture, while digital agencies/media houses may want us to believe that internet is where advertisers should be moving their spends too I don’t think we are there yet. We won’t be for quite some time unless the need for usage is there.

  4. i think its a fair hypothesis and the logic is easily followed. but i do think that companies who have embroiled themselves with heavy investments into the future of mobile internet will now create programs to “socialise” this need. this is really no different from category building work (fmcg jargon for creating a need) in any area. so the potential that the simple availability of technology is indeed a fair representation of opportunity and a sufficient indicator of its future success (because failure is too costly and inimical to global corporate interests). the only question which is subjective is ‘how long it will take’. you and i both know it won’t be a 100 years.

  5. Wholeheartedly agree with the notion that mobile internet may not become big in India for a while. Affordability , tech literacy and utility remain the key barriers even today. Hence, SMS based services continue to reign supreme not just in India ,but in all emerging markets. Getting people to use mobile for e-comm in rural India requires deep behavioral change that takes years to effect. It took Lifebuoy decades of hygiene awareness campaigns before they cracked the rural market. Mobile internet’s time will come when the Samsungs of the world invest beyond smartphone tech in a sustained manner.

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