Broadband flows into Indian homes

Over 30 million Internet users live in India, though only 2.2 million of them actively shop online. Growth can be bigger if access is more affordable.

INDIA--Internet usage in the country is growing at a slow, but steady pace, and is poised for bigger growth if access services are more affordable.

According to a recent survey by online research firm JuxtConsult, the overall Internet population in urban India has grown a healthy 28 percent between April 2006 and April 2007. The country's online user population currently stands at 30.3 million, at a penetration rate of some 3 percent. Among urban Indians, the penetration rate increases to about 9 percent.

"Since the base is small, the growth rate of 28 percent is not spectacular," said Sanjay Tiwari, director and co-founder of JuxtConsult, in a phone interview with ZDNet Asia. The annual survey is the third conducted by the research house.

Of the total 30.3 million urban Internet users, 25.2 million (or 83 percent) are "regular" users who log on at least once a month, according to the study findings. The balance, 5.15 million (17 percent), are "occasional" users who log on infrequently. Some 20 million Internet users make daily visits to the Web, the survey showed.

It also found that at least three out of four regular Internet users, or 77 percent, who access the Web from home do so with a broadband or superior connection. At least 74 percent of work-related access is also based on broadband or superior connections.

Unlike previous findings which indicated that growth was fueled by cyber cafés, last year's growth was largely due to the increase in home-based Internet usage, which spiked to 59 percent from 19 percent.

In fact, the role of cyber cafés has almost stagnated in India. The number users who access the Web in a cyber café grew by only 1 percent, to 47 percent, between April 2006 and April 2007.

Affordability to boost growth
According to Tiwari, two of the biggest barriers hindering wider Internet adoption in India are affordability and language.

"Not much content is available on the Internet in local languages," he said, noting that only 12 percent of India's online population use local language.

He explained that India's Internet market is presently at the same point as the mobile telephony sector was between 2003 and 2004, before mobile phones really took off in the country.

"As the prices of mobile phones crashed, penetration increased. The same should happen to the Internet market," Tiwari said. "The only deterrent in this case is the fact that the proliferation of the Internet is hugely dependent on literacy."

To date, only 52 percent of Indians are literate or able to write their name in any language.

And despite the growing popularity of the Internet, very few regular users shop online. The number of consumers who buy online at least once a month has remained stagnant at 2.2 million. That figure is a mere 9 percent of "active" online users who surf the Web at least once a month.

In other survey findings, 29 percent of all Internet users in India preferred to use Google among all other Web sites, while Yahoo emerged as the most recalled online brand.

Swati Prasad is a freelance IT writer based in India.