To begin with, with more than a billion users, India boasts the world’s second largest mobile phone market. However, Internet growth in this vast market appears to have stalled.
Besides, in October 2022, the country’s telecommunications regulator counted 790 million wireless broadband subscribers, i.e., people who have access to the Internet from mobile phones. That was barely a million more subscribers than it recorded in August 2021. Mobile internet subscriber growth has now slipped to single digits from scorching double digits between 2016 and 2020.
Growth is flattening.
Moreover, smartphones are the main gateway to internet connectivity – and this is where growth is flattening. India currently has around 650 million smartphone users, but the rate of growth has slowed. Mobile phone sales fell to 151 million units last year, down from a peak of 168 million in 2021, according to Counterpoint, a market research firm. Single-digit sales growth is expected this year.
Meanwhile, as recently as three years ago, users were buying a new smartphone every 14-16 months, according to IDC, another market research firm. However, they are now looking to upgrade every 22 months.
In addition, one reason is that smartphone prices have risen since the pandemic due to rising component costs, a weakening rupee and supply chain disruptions involving China, the world’s largest smartphone maker. Almost 90% of the more than 300 smartphone components manufactured in India are imported.
Moreover, at home, a slowing economy, job losses and subsequent pressure on incomes mean less money in the wallet for a more expensive new phone. “The slowdown in internet growth should be seen as an indicator of the state of the economy,” says Nikhil Pahwa, a campaigner for digital rights.
Rising prices of phones likely to be the cause
In addition, Mr. Pahwa believes that it is not just the rising prices of phones that are slowing the growth of the Internet. Most apps and services have to address language and literacy barriers in rural India. Much of the Internet remains in English and a few Indian languages, he says.
In conclusion, more innovative results are to be had, such as the PayTM Soundbox, a battery-generated device that extends merchants instant audio confirmation in 11 languages for every payment received through a payment app. “We need more innovation to develop the Internet in rural India,” says Mr. Pahwa. But even before that, smartphone sales have to pick uTo begin with, with more than a billion users, India boasts the world’s second largest mobile phone market. However, Internet growth in this vast market appears to have stalled.