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Facilitating
Citius,
Citius, Altius,
Altius, Fortius
(Faster, Higher, Stronger)
Internet In India
1
Table of Contents
1.0 Introduction 4
2.0 Glossary of Terms Used 5-7
2
Table of Contents
5.0 Important Internet Applications 19-22
5.1 Increasing Share of Pie for Online Entertainment 20
5.2 Preference of Applications Vary among Demographic Segments 21
5.3 The Growing Stickiness Index 22
6.0 Enablers of Internet in India 23-27
6.1 Barriers for Internet Usage 24
6.2 Essentials for Internet Penetration – Urban 25
6.3 Essentials for Internet Penetration – Rural 26
6.4 Likeliness of Usage of Different Applications 27
A1.0 Annexure: Study Methodology & Sampling Procedure - Urban 28-33
3
1.0 Introduction
India has witnessed continuous growth in the Internet adoption in certain sections of society -
predominant patterns exist mostly in urban areas. Internet users have started utilizing this
technology not merely for information search or communication but also for leisure activities.
Different online applications like entertainment – gaming, movies and music as well as user-
generated content on the web has made Internet a virtual world. Over the web, users are interacting,
learning and building relationships. Rural areas of the country, however, have just started to
recognize the importance of this medium.
Various technological developments are redefining options of accessing the Internet. These
technologies are expected to play a vital role in enabling improved adoption of the Internet across
different geographies. The emerging technologies such as WiMAX, 3G and WiBro promise to provide a
last mile connectivity and allow new access points such as PDAs and kiosks.
This report aims to map the growth of Internet in India. It is a part of a syndicated study conducted
annually by IMRB International in association with IAMAI.
Internet in India (I-Cube) reports are based on a primary survey conducted across 30 cities - among
20,000 Households, 90,000 individuals, 1000 SMEs and 500 Cyber Cafes. To extend the scope of this
study, we have carried out this research across 100 rural centers to understand Internet behaviour in
rural areas.
This extensive exercise makes this study one of the largest researches in the Internet domain in
India.
4
2.0 Glossary of Terms Used
PC Literate: Individuals who know how to use a PC. While this term does not signify the
extent of PC usage, it means that a computer literate is able to work on a PC without
assistance.
Claimed User: An individual who has used the Internet at any point in time in the past.
This gives us a clear indication as to how many Indians have experienced Internet at
least once in their lifetime. These may also be called as ‘Ever Users’.
Active User: An individual who has used the Internet at least once in the last 1 month.
Internet Non-User: An individual who has not accessed Internet at any point in time.
Internet Non-Owner: An individual who belongs to a household which does not own an
Internet connection.
Small Metros: Cities which are not a part of top 8 metros but have more than 1 Million
population.
5
2.0 Glossary of Terms Used
Non-Metros : Towns with population between 0.5 million to 1 Million.
School-Going Kids: Kids studying in school and above 8 years of age. They
are in the age group of 8-17, although, a small proportion could be over 18
years.
6
2.0 Glossary of Terms Used
Young Men: Men in the age group of 21-35 years who are not school or college-
going students. This segment includes all those who are employed as well as
unemployed.
Older Men: Men in the age group of 36-58 years employed or otherwise.
Working Women: Women in the age group of 21-58 years and employed outside
home.
Non Working Women: Women in the age group of 25-58 years of age and are not
working. This segment includes housewives as well as non-working young women
who are not school or college-going students.
7
3.0 Growth of the Internet in India
8
3.1 Internet User: Year 2008 (All India)
March 2008
Urban
Claimed Internet users~50 Mn
Active Internet Users~36 Mn
Rural
Claimed Internet users~5.5 Mn
Active Internet Users~3.3 Mn
*- Source-NRS 2006
(Population with 12 years of age and above)
9
3.2 Emerging Rural Internet Market
818 Mn*
Total Indian Population
Approximately 70% of Indian population reside in Rural areas of the
country. Literacy rate in the rural areas has been reported at 65%.
568 Mn*
Interestingly, English-speaking population in Rural India is only 63
Rural Population
Mn which is 17% of the total literate population. The I-Cube research
estimates that nearly 15.1 Mn Population in the rural areas are
computer literate. Of which, 5.5 Mn have used the Internet in the
past.
368 Mn*
Rural Literate Population
With nearly 0.6% of penetration in the total population, there are 3.3
Mn Active Internet users. Non-Government Organizations (NGOs),
GOI initiatives, community service centers and CSR activities by
private companies have played a significant role in ensuring this 63 Mn*
penetration. Rural English-Speaking Population
3.3 Mn
Rural Active Internet Users
*- Source-NRS 2006
10
3.3 Urban Internet Market
818 Mn*
Total Indian Population
With 250 Mn urban population in India, 82% of them are literate
and of these, only 31% are English-speaking.
250 Mn*
Urban Population
However, of 86 Mn (42% of 205 Mn), 84% are PC-literate. This
indicates that PC literacy and usage are highly associated with
English-speaking ability.
205 Mn*
Urban Literate Population
As urban Internet penetration reaches a saturated level there is a
need for innovative information delivery which could ensure
increase in the time spent on the Internet.
86 Mn*
Urban English-Speaking Population
User generated content such as blogs, TLC (Trying out, links and
communities) could help in increasing time spent over the Internet
(i.e. conversion of light users to heavy Internet users). 72 Mn – March 2008
85 Mn – September 2008 (Est.)
Urban Computer Literates
Other critical utility applications like E-commerce could help in
furthering Internet non-users towards adopting this medium.
50 Mn – March 2008
128 Mn of the Urban population has not adopted the medium due 57 Mn – September 2008 (Est.)
Urban Claimed Internet Users
to non-familiarity with English language, which forms the potential
target segment for usage of vernacular content on the web.
36 Mn – March 2008
42 Mn – September 2008 (Est.)
*- Source-NRS 2006 Urban Active Internet Users
11
3.4 Growth Rate of Urban Internet Population Base: All India (Urban)
(All figures in Million)
Sep-08 85
Computer Literate
2006 59
technology in the lives of people, in addition, to 53
2004
decrease in prices of PC and hardware. 2003 42
2001 31
2000 16
Sep-08
Claimed Internet User
57
70% of computer literates have used Internet in Mar-08 50
2001 9
5
2000
Sep-08 42
Mar-08 36
market. 2003 8
2001 4
2000 2
Such estimates were not possible for rural India as we have started studying rural Internet pattern from the current year
only. 12
3.5 Far-Reaching Internet Services Base: All India Claimed Internet Users (Urban)
(All figures in Million)
5 Mn 9 Mn 12 Mn 16 Mn 32 Mn 46 Mn 50 Mn
58%
This shows that people from non-metros 55% 55%
41% 38% 37%
and smaller towns are getting exposed to
this medium.
2000 2001 2003 2004 2006 2007 2008
Top 8 Metros Other Metros 5-10 lakh towns Less than 5 lakh towns
15% 21%
that Internet has started to reach the
17%
18% 18%
23%
23% bottom of the pyramid i.e. to the less
affluent classes of the society.
29%
32%
31% 29%
35%
33%
32%
This rise in the subscriber base could
be because of:
• Higher literacy levels, and
49%
41% 40% 41% 42% 39% 37%
• Decrease in the prices of PCs
Other sticky applications like user-generated content and social networking websites are
attracting the youth of the country and helping them to explore virtual world comprising
different experiences.
Online entertainment is evolving as the major driver for propelling growth of the Internet
among young generation. Specifically, online gaming is major growth area in this vertical
with huge investments by content providers and developers.
14
4.0 Internet Access Points
15
4.1 Continuous Growth of PC Owners and Internet Subscribers
Base: All India PC & Internet Owning HHs (Urban)
Figures in ‘000
Role played by CSR activities of private companies, Community service centers and NGOs
working in ICT (Information and communication technology) area helped in higher PC and
Internet penetration in rural areas.
However, there has been a decline in the proportion of PC owner with the Internet
subscription - 62% compared with the last year which was at 68%.
16
4.2 Rise in the Internet Access from Office
Base: Active Internet users (Urban )
30 cities in 2007-2008
26 cities in 2006
22 cities in 2004
Cyber cafe has been the main access 16 cities in 2000 - 2003
points of Internet over the years. There
1.4 Mn 3.1 Mn 4.9 Mn 7.5 Mn 13.2 Mn 15.4 Mn 17.9 Mn
is a marginal increase over the last 8%
3% 2%
3%
2% 2% 2% 1%
4% 5% 6% 7% 8%
year in the percentage of users who 6%
23%
30% 27%
Continued high share of cyber café in 31%
30% 26%
Internet use can be attributed to 22%
Office is becoming more popular point of access which is not necessarily a healthy sign for the
growth of Internet Industry in India as there are finite types of online applications that an
office user can access; due to restrictions levied by IT units.
Interestingly, there is an increase in the Internet access from School/Colleges. This could be
due to the introduction of computer education and permission to access the Internet from
academic laboratories.
17
4.3 Convenience, Cost & Content Sought Trade-Off
Base: Active Internet users in 30 cities
Surveyed (Urban)
27%
All 30 cities School going College going Young men Older men Working Non-working
kids students women women
Expectedly other demographics segments like young men access the Internet
mainly through office.
Except in case of non-working women, share of home as main access point does not
amount to a high percentage as it is convenient to them.
18
5.0 Important Internet Applications
19
5.1 Increasing Share of Pie for Online Entertainment
Base: 17.9 Mn Active Internet users in 30
cities Surveyed (Urban)
providers. 7%
39% 5%
9%
Over the years, Internet has been evolving as a platform not only for communication but also
for various other applications such as learning, shopping, gaming and self-expression in the
form of blogs/forums.
21
5.3 The Growing Stickiness Index
Base: Active Internet users in 30 cities
Surveyed (Urban)
30 cities in 2007-08
26 cities in 2006
22 cities in 2004
16 cities in 2000 - 2003
Internet is on its way of becoming a 1.4 Mn 3.1 Mn 4.9 Mn 13.2 Mn 15.4 Mn 17.9 Mn
7.5 Mn
mass media as the user base as 3% 3% 4% 3% 4% 3% 2%
well as time spent using this media 7% 11%
11% 10% 13% 12%
16% 9.3
has been increasing. 8.2
19%
21% 15% 18% 18%
23%
21% 6.9
Two-third of the active Internet 5.6
users are accessing the Internet at 6.2
26% 4.8 22% 23% 23%
least 2-3 times a week. 25% 21%
24%
18% 19% 20%
Average hours per week has 23% 14% 18%
increased over the last year with 15%
relatively higher margin, which is a
25% 23% 28% 25% 24%
very positive sign for the growth of 21% 17%
Internet industry in India.
2000 2001 2003 2004 2006 2007 2008
Stickiness Index is increasing over the last year with significant increase in average hours
spent per week as well as frequency of access.
22
6.0 Enablers of Internet in India
23
6.1 Barriers for Internet Usage
There is no need for Cyber café charges There are no good Dial up cost of I need guidance
it/Don’t know how it are high cyber café’s nearby internet access is
can be useful high from home
Innovative content delivery and provision of need-based applications like Online bill
payment, Online ticket booking etc. will help in creating awareness among Internet non-
users and will act as a driver for Internet usage.
Community service centers, private companies and NGOs are playing important role in
creating awareness of Internet in rural area.
24
6.2 Essentials for Internet Penetration - Urban
Internet as an interactive medium Accessible on Disparate Devices
• Urban markets have started using Internet as one of • Mobile subscriber base in India has crossed 300Mn in
the interactive media. As a result, advertising on digital September 2008. Value-added services in providing
medium has started to gain importance. Internet, is Internet connectivity and related content over mobile
slowly, becoming a part of the media plan. phones could ensure “on the go” access to the World
Wide Web.
• Consequently, there is a Internet - Accessible
need for measurement Interactive On Disparate
initiatives to evaluate the Medium Devices
media engagement among
the Internet users.
Evolved
Content Technology
Evolved Content
Technology
• To ensure continued usage of the Internet in urban
areas, advanced content/applications through rich
media needs to be delivered over the Internet: • Emerging technologies like WiMAX, WiBro and 3G will
– Televisions/Movies over the Internet
enable BWA (Broadband Wireless Access) at much
higher speed anywhere and anytime.
• Further, online entertainment, specifically gaming will
also ensure continued penetration and persistence in
• These technologies will act as a platform in
using the Internet.
introducing high-end applications such as IPTV.
• Not understanding the usefulness of this medium is • Higher cost of Internet access and PCs are major
acting as one of the main barriers for not using the hindrance in accessing the Internet. Kiosks installed by
Internet in rural areas. NGOs, CSCs, and some of the private companies with
their CSR initiatives are few of the alternatives
• Further, there is a available with them.
part of population that
is aware of the Internet
but need guidance in Awareness/
utilizing the potential of Access
Training
this medium.
Content Technology
Content Technology
• Online applications that help rural dwellers in • Higher cost of access and proximity of the point of
providing information related to their skilled/unskilled access are acting as barriers for Internet penetration in
occupation could help Internet penetration (Need-based rural India.
applications)
Access government
Buy products online 33% 3% 4%
services like Passport
17% 2% 4%
Enquiry, File Income Invest in shares and
26% 5% 8%
Tax Returns, etc stocks
Infrequent users are likely to use the Internet for communicating through Email and Instant Messaging,
utilising search engines for general information and news, play games as well as book railway tickets online.
Effective delivery of these sets of content will help them in converting to active Internet users.
27
A1.0 Annexure :
Further, a pan-India approached was adopted wherein cities that model Internet
behaviour in all parts of the country were considered
28
A1.1 Target Segment and City Selection
For sampling purposes, we extensively used the previous rounds of the I-Cube
reports that have laid down the universe of the Claimed and Active Internet
Users in the country
The previous rounds of the I-Cube reports have indicated that majority of the
market is still limited to the Metros
Census of India 2001 indicates that there are 35 Cities with more than 1 Million
population in India. In this round of survey, we have covered all the top 8 cities
as well as 22 other cities
Below are the cities that have been covered in this research:
Cities by Strata
Top 2 Metros Delhi & Mumbai
29
A1.1 Age & Demographics of Respondents
Claimed Internet
Users
College Going 18-25 years
Students
Internet Users
Young Men 21-35 years
30
A1.2 Household Listing Interview Sampling Procedure
31
A1.2 Household Listing Interview Sampling Procedure
33
A2.0 Annexure :
34
A2.1 Criteria for Selection of States
Firstly, states were divided in terms of their population levels
For appropriate representation, we selected states having high and medium
population
Then, literacy rates were examined for all the states and
compared against the population
The states were divided and selected as having high, medium or low literacy
levels
35
A2.2 Criteria for Selecting Districts in the States
Step 3 Rural respondents from 6 villages across every selected district were
Selection of interviewed. There was also a split on the basis of the strata of the
respondents respondents depending on their SEC classification
36
I-Cube 2008: Setting Record Straight!
37
I-Cube 2008: The Achievements !
Exclusive segmentation
Internet penetration and of Internet Users (I-Cube
usage In Rural India segments)
Online behaviour of SMEs Drill down available:
I-Cube Segments
Adoption of WiMax / 3G /
Town Class
Mobile Broadband / etc.
SEC
Proliferation of User Frequency of Use
Generated Content Maturity of Usage
Point of Access
Online transactions
Content Accessed
including online insurance,
loans, bill payment, etc. 2 level combinations
possible
38
Contact Us For Subscriptions
Balendu Shrivastava
Group Business Director,
eTechnology Group|IMRB
Tel : (91)-22-24233675
Fax: (91)-22-24323800
Email: balendu.shrivastava@imrbint.com
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