As many of you now know, InternetWorldStats reported that the total no. of Internet users in India crossed 50 Million in Dec '05. Just today, PwC released a research report which estimates Internet Advertising will grow at a CAGR of 50% to increase over 7 fold from the current $22 m/pa to $170/pa by 2010.
Yet, many still still doubt this. Infact, a fellow Indian blogger has recently posted that he estimates the regular Internet users in India at around 5M.
So whats going on?
I am afraid the doomsayers are wrong and the Indian Internet story is booming. Lets not talk about household connectivity, but lets talk instead of connectivity, most of which is happening in offices. In each and every office I have been to in India, and this includes small time property agents, sharebrokers, travel agents, car garages, etc., I have seen that the staff have access to the Internet. From checking cricket scores to chatting and surfing media sites, I always find it enlightening when I sneak a peak at the monitors I'm passing by.
And like most things in India, the Internet in India is being delivered through the unorganized sector: your unfriendly neighbourhood cablewalla (cable operator). These guys get a 1 or 2 MBPS line from an Exxat or Hathway and supply 30 - 40 people at Rs. 500/month, no guarantee for uptime. Thats good enough for surfing in a country where even the power is not guaranteed 24hrs a day in most places!
Further, I have always maintained that all statistics miss out the unorganized sector in India. Take the case of flowers. By classic statistical methodology, flowers are sold through florists as bouquets or arrangement. So according to APEDA, India is one of the lowest flower consuming countries in the world. Wrong. Indians use flowers everyday, from daily puja (prayer) to women wearing it in their hair everyday. The Indian style of using flowers as compared to the West is different: In India flowers are consumed without stem, and the heads are woven together to form a haar (leis) or gajra (wrist or hair band). These haars & gajras are sold through temple shops; or delivered by vendors to peoples homes every morning; or sold on traffic signals. Net result: India has amongst the highest hectares of flower cultivation per capita of population, worldwide !
InternetWorldSats obtains it's Internet usage data from Nielsens, which uses a comprehensive methdology, including accounting for all the hardware equipment sold in a country like routers, lan cards, monitors, mice (is that plural for a computer mouse?), cable wires, mother boards, etc. Again, with most computer hardware supply in the unorganized sector in India, this is great methodology.
For those of you who are interested, you can chew over reports released by the Internet & Mobile Association in India at http://www.iamai.in. Don't miss the report that shows 4.6 M Indians use online banking, and please, observe their methodology before you discount it.