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Internet users growth in India tapering off

Internet users growth in India tapering off

The slowdown was more prominent in urban areas where the growth stood at around 9 per cent compared to 14 per cent in rural areas in 2017. It's a sign of concern for telecom operators.

Despite the slugfest between telecom operators driving down the data tariffs, the new users hopping on to the internet bandwagon have slowed down, says 'Internet in India 2017' report published by IAMAI and Kantar IMRB. In 2017, the growth at which telecom operators (and internet service providers or ISPs) added new data users slipped to 12 per cent in 2017 as against about 17 per cent in 2016 and 30 per cent in 2015.

The slowdown was more prominent in urban areas where the growth stood at around 9 per cent compared to 14 per cent in rural areas in 2017. It's a sign of concern for telecom operators, especially because the internet penetration level still stands low at 35.03 per cent for the entire India - 64.84 per cent in urban and 20.26 per cent in rural areas.

According to Kantar IMRB, the decelerating growth can be attributed to infrastructure issues, which include not enough telecom towers and optical fibre network, in the rural areas. Beyond metros and smaller towns, the access to internet services is patchy and far from satisfactory. Many mobile users don't use internet because they don't find utility for it. The growth can slip further if telecom operators don't take heed and start investing to improve telecom infrastructure in rural areas for the next few years.

The survey shows that 86 per cent people accessed internet on their mobile phones in urban areas whereas the corresponding number was 87 per cent in the rural areas. The condition of telecom infrastructure in rural areas is suboptimal but that's where the next phase of growth is going to come from for the telecom operators. The agencies surveyed 75,000 individuals in 750 rural and 170 urban locations.

The telecom operators, on the other hand, say that they have been continuously investing in networks to expand reach and improve the quality of services. Market leader Bharti Airtel recently revised its investment targets for 2017/18 to Rs 25,000 crore (up from Rs 20,000 crore) to expand network and digital infrastructure. This investment is part of the Rs 60,000-crore Project Leap (a network transformation programme) launched by the operator in 2015. Reliance Jio is reportedly planning to invest some Rs 30,000 crore to expand coverage and increase network capacity taking its total investment to about 1.9 lakh crore till date.

The survey shows that the total internet users in India - including wireline and wireless users - stood at 471 million in October 2017. It's expected to touch 500 million in June this year, a growth of 6.15 per cent in seven months. Internet connectivity includes data usage across all technologies - 2G, 3G, 4G and fixed broadband.