8 Predictions on the Future of Internet in India

1)      India to remain the fastest growing internet destination

India’s internet user base has already surpassed the US, and today is second largest after China. Globally, the number of internet users is expected to touch 4,170 million by 2020, growing at a CAGR of ~6%, and adding ~960 million in the next five years. However, internet user growth in India is expected to be 3x the world average, growing at a CAGR of ~20%. India will add ~400 million users, which is over 40% of incremental internet users worldwide in the next five years.

2)      The type of internet users in India is set to change dramatically

Less than 10% of India’s population lives in Tier 1 cities. Internet penetration in these areas has already reached saturation, and we estimate that 75-80% of new user growth will come from rural areas in the next five years. Internet businesses will have newer set of customers who will:

  • Access content via mobile phones and not laptops and desktops
  • Want content in local (Indic) languages and not in English
  • Prefer to consume content via videos, rather than text

This poses a huge opportunity for companies developing local language apps and sites, search interfaces, video streaming and broadcasting, download managers, among many others. At the same time, it presents challenges to prevalent go-to-market models and will require significant retooling of approach for Internet-centric businesses.


3)      Last-mile connectivity to be enabled by government, telcos and technology providers

Multiple stakeholders will need to work in tandem to bring the next generation of Internet users (rural, mobile-centric, and local-language consumers) online in India.

While the Government’s Digital India initiative aims to deploy the National Optical Fibre Network (NOFN) providing broadband connectivity to cover 250,000 gram panchayats, the onus of bringing this Internet to end users falls on telcos and technology companies. The NOFN will have to be linked with telecom towers to deliver wireless broadband services to rural households, but setting up telecom infrastructure in remote areas remains a challenge.

So companies such as Google, Facebook, and Microsoft are coming up with unconventional methods. While Google wants to use a network of Helium balloons to relay signals to remote areas, Facebook plans to use drones as an alternative. Microsoft plans to use unused spectrum in frequencies used by TV channels to carry data. The pilot projects are expected to start this year. Telecom companies, state governments and the Union Government will need to partner with Internet-based technology giants to drive up adoption.

4)      Businesses and consumers to come online, creating an ecosystem of SMBs and micro-entrepreneurs

Today, there is an Internet business for almost everything – selling old furniture, shopping online, booking travel, networking with friends, making payments, consulting doctors…the list goes on. Even offline businesses are trying to get a part of their value chain online. Google plans to bring 20 million businesses online by 2017 and train over 2 million Indian developers in Android.

Where there are businesses, that’s where customers will flock. By 2020, the number of online shoppers are likely to cross 175 million, growing 3.5X over 2015. Technology will enable easy and efficient transactions. The launch of new devices such as Samsung Galaxy Tab Iris, featuring an iris scanner that is Aadhaar and STQC-certified, will enable cashless and paperless services for banking, passport, taxation and healthcare among others. We will continue to see adoption of payment solutions such as mobile wallets, cash cards, platforms, and POS (point-of-sale) services, dawning the age of well-connected digital economy. At the same time, the Internet is creating a network of SMBs, and micro-entrepreneurs/startups – an ecosystem, with the potential to create thousands of direct and indirect jobs.

5)      From an Internet Economy to the Internet of Things – marching ahead to connect India

Prime Minister Narendra Modi’s ‘Digital India’ envisages building 100 smart cities across the country. For creating smart cities, India needs a balanced focus in terms of modernizing city infrastructure and leveraging technology to improve the efficiency and capacity of city services. In terms of city infrastructure, investments are required to modernize city services like water, energy, public transportation, roads and sewage. Investments are also required to take up technology initiatives in core city subsystems like energy, water, transportation, public safety, citizen services, city governance, healthcare and education, and overall at the city level to improve collaboration amongst these subsystems, improve citizens’ participation and to wring out efficiencies from infrastructure assets. The essence of smartness in a city lies in integrating core city subsystems and carrying out a deep analysis of the resultant data in ways that are meaningful to all stakeholders. All of this can be facilitated by leveraging advances in Internet technologies as well as by synergizing with several investments already made in creating technology infrastructure.

6)      Dawn of an era of digital literacy

The Internet is redefining literacy in India. With so many tech startups enabling local language content, digital literacy across India is becoming both possible and significant. The goal is to create one ‘e-Literate’ person in every Indian household by 2020. The Government, NASSCOM, and the private sector have joined hands to form the National Digital Literacy Mission (NDLM) which is working towards making the goal a reality.

7)      Role of cyber security to become paramount

With digital connectivity, the risks of cyber-crimes increase. With multitudes of people using e-commerce and transacting online, there is a huge need for technologies that can prevent data theft. India features in the top 10 source countries for DDoS attacks. There has been a significant increase in Internet scams and hacks, with IoT devices being most vulnerable, as they are the major sources of data. The RBI is directing banks to deploy cyber security policies, and cyber crisis management plans. Going forward, these policies will get more stringent and prescriptive with broader issues in cyber security being covered under its ambit.

India is also collaborating with the US to develop a complete framework on the India-US cyber relationship. The spending on cloud-based security solutions will continue to increase across verticals, leaders here being the BFSI and online retail companies. The Government too has set in motion a number of initiatives that will take effect in the coming years. Among these the focus is on protecting national critical information and infrastructure. This would aim to protect key installations and systems across different verticals.

Corporates such as Microsoft and Akamai are also establishing specialized centers to develop machine-learning based detection technologies. Specialized teams trained in mitigation of a variety of attacks are also being actively deployed by these technology giants in India. We need more such initiatives to be able to tackle cyber threats in the country. What it boils down to is indigenous talent and resources with the right skill-sets to execute such projects. India is witnessing a huge demand for such security professionals (technologists and analysts, alike). In line with these growing demands, security has become one of the key focus areas for NASSCOM’s Sector Skills Council, which working towards creating the right cybersecurity skill sets among Indian IT professionals

8)      Specific policies and regulations need to be created to drive growth of Internet in India

The Government will need to continue to build momentum in creating new policies to drive Internet adoption and to support the growth of Internet businesses. Whether around broadband spectrum, Internet adoption/availability, data protection, or cyber security, what was applicable five years back is no more relevant in today’s context, and new policies will need to be futuristic. They will also need to be cognizant of India’s challenges and figure out ways to mitigate those challenges. The goal, then, is to create a sustainable environment of public-private partnerships where the ultimate beneficiaries are the citizens of India.

For more interesting insights on the internet in India, download the FREE NASSCOM-Yourstory study- The Future of the Internet in India


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