According to a recent report titled ‘Digital India – Technology to Transform a Connection Nation’ generated by McKinsey Global Institute, India is expected to see a 40% rise in the number of internet users and 2 times increase in the number of smartphones by 2023. As per the report the increase in the number of internet users and smartphones is attributed to the falling data costs by 95% since 2013.
As far as the worth of core digital sectors is concerned, the report depicted it also to double to USD 355-435 billion by 2025.
The McKinsey report also found that with 560 million internet subscribers in 2018, India is the second largest market for digital consumers after China.
On an average the mobile data consumed by users in India at present is found to be 8.3 GB each month in comparison to that in China and South Korea where the mobile data use is found to be 5.5 GB and 8-8.5 GB respectively.
According to the report with 12.3 billion the number of Apps downloaded in the India is more than the number residents of any other country except China. As of now the number of mobile phone subscription in India is 1.2 billion.
“Our analysis of 17 mature and emerging economies finds India is digitising faster than any other country in the study, save Indonesia — and there is plenty of room to grow: just over 40 per cent of the populace has an internet subscription,” it said.
While on the one hand government drive for a digital India has digitized the economy to a great extent the mobile service providers on the other has helped bring down data costs by more than 95% since 2013. The report also noted a fall in the cost of 1 GB data from 9.8% of per capita monthly GDP in 2013 (roughly USD 12.45) to 0.37% in 2017 (the equivalent of a few cents).
“Private-sector innovation has helped bring internet-enabled services to millions of consumers and made online usage more accessible. For example, Reliance Jio’s strategy of bundling virtually free smartphones with subscriptions to its mobile service has spurred innovation and competitive pricing across the sector,” the report said.
Consequently, there is a 152% growth in the monthly mobile data consumption per user annually, which is more than twice as compared to that in the United States and China. Average fixed-line download speed exhibited a four times increase between 2014 and 2017.
“India will increase the number of internet users by about 40 per cent to between 750 million and 800 million and double the number of smartphones to between 650 million and 700 million by 2023,” it said, adding the potential for India’s internet subscriber base could reach 835 million by 2023.
As revealed by McKinsey the internet user base in India has grown considerably in recent years attributing this growth to decrease in data cost and increase in availability of smartphones & high-speed connectivity at the same time.
On an average, the time spent by social media users in India on the platforms is found to be 17 hours each week, which is more than that in China and the United States.
The number of adults in India with at least one digital financial account has increased by two times since 2011 and the entire credit goes to the government’s Jan-Dhan Yojana – a mass financial-inclusion programme that has resulted in over 332 million people to open mobile phone–based accounts.
“By many measures, India is on its way to becoming a digitally advanced nation,” McKinsey said. “Just over 40 per cent of the populace has an internet subscription, but India is already home to one of the world’s largest and most rapidly growing bases of digital consumers. It is digitising activities at a faster pace than many mature and emerging economies.”
The core digital sectors in India that comprise IT-BPM, digital communication services and electronics manufacturing accounted for 7% of GDP in 2017-18 that amounts to almost USD 170 billion .
“We estimate that these sectors could grow significantly faster than GDP, and their value-added contribution could range from USD 205 billion to USD 250 billion for IT-BPM, USD 100 billion to USD 130 billion for electronics manufacturing, and USD 50 billion to USD 55 billion for digital communication services, totalling between USD 355 billion and USD 435 billion and accounting for 8 to 10 per cent of India’s GDP in 2025,” it said.
The report also said that with the country on a fast track to adopt key digital attributes it is no surprise if the number of smartphones and internet subscriptions continue to increase rapidly in the next five years.
Source: The Economic Times