Growth of Internet. What Next?


While we have just celebrated 25 years of the Internet in India and been celebrating this milestone with memories, the authors of this article have collaborated to provide a crisp futuristic view of next decade. This article has been divided into 3 phases, Journey of 25 years, Factors that drove growth until now and factors which would drive growth in future.

During the Late 80’s and Early 90’s Personal Computing was at a very nascent stage with its presence in few pockets across the country. During the time of MS-DOS, Windows 3.1 and subsequently Windows-95, modems, teleprinters & fax devices started appearing on the networking landscape. Prior to the launch of the Internet, Bulletin Board Services (BBS) were quite famous which entailed a person creating a server with content hosted on it. Users would connect to the BBS through a dialup connection to access the content stored on the server. Dial up connections entailed 14.4 kbps to 32 kbps modems. A 128 kbps connection was considered high speed at that time and only used for commercial purposes.

However as the content was more text oriented compared to heavy reliance on graphics, media and video content the speed of connectivity seemed to suffice the needs of the day for communications.

Circa 1995, 15th August Internet was introduced in India by VSNL in the top metro cities with links through Satellite and subsequently through submarine cable systems plugging in India into the global connected ecosystem. Price of a 128 kbps leased line connection was 10 lakhs per annum with dial up connections costing between 5000/- to 15000/-. The Internet of those days primarily was used by corporations for running their email systems, hosting websites and running basic chat applications. In the late 90s content consumption was limited and E-Commerce was a newborn in this ecosystem. In this era, the computer network architecture was centralized and mostly with hub and spoke topology. With the rise of the Internet, a mesh global network emerged, fuelling the exponential growth with any to any communication.

Internet reach was initially limited to wired connectivity through dialup and leased lines which slowly graduated to mobile service providers offering mobile WAP services on 2G GPRS and EDGE networks.

The introduction of the mobiles (iPhone, Blackberry, Windows Mobile and Android) and smart computing devices were a renaissance period for the world at large causing Internet consumption to move from the limited and restricted usage on PCs and Computers to that on hand-held devices. With this, the accessibility of the Internet has increased exponentially with mobile devices users availing Internet services by default.

Fast forward to 2020, with more than 50% mobile penetration has made the Internet an essential commodity across geographies and social strata with higher adoption of smartphones as well as feature phones supporting Internet based applications. Additionally with the Covid 2019 pandemic forcing people to be indoors, Internet connectivity has become the lifeline for students, teachers, work from home employees, entrepreneurs with unified collaboration services, e-commerce, social media, medical consulting, digital payment solutions, public cloud services becoming mainstream.


Factors Driving Growth

Growing at the rate of more than 11 users per second, or 1 million new users each day, global internet users now make up 62% (4,833.521 million) of the global population (Jun 2020). Over three-fourth of the global population will have Internet access by 2023. There will be 5.9 billion total Internet users (74 percent of global population) by 2023, up from 4.8 billion (62 percent of global population) in 2020 considering 6% CAGR.

The number of internet users in India was 636.74 million in 2019 which has touched 700 million by mid-2020. India has the second highest internet users in the world after China. The number of internet users is around 50% of Indian population.

The Internet users are spending their time on various applications as below

  • 90% of users are using instant messaging applications
  • 74% use social media
  • 70% use it for watching online video
  • 69% users for shopping & other consumer services. Daily people are spending at least 6 hour 30 minutes per day on the internet as of mid-2020

Following are some of the drivers for increasing faster internet in India

  1. Growth from Rural Market:
    • Rural India has 264 million internet users and this is expected to reach 304 million in 2020.
    • Local language content and video drive the internet boom in rural India, with a 2.5 times rise in penetration in the last four years.
    • Online crop analysis & remedy for enhancing crop yield through mobile apps
    • Mobile is the device of choice for 100% of active users for internet surfing
    • The use of the Internet helps farmers manage their farms and market their products in a more efficient and timely manner. Being an agricultural country, this is going to be one of the prime growth drivers.

2. Increasing Spending power

    • Due to increasing disposable income, the average Indian household spends more on high-end mobiles & gadgets thereby fuelling the growth of the Internet bandwidth & the demand for faster internet. Adoption of smart & voice enabled speakers & health wearable’s are examples for the same.

3. Connected devices

    • Increasing connected devices like IOT, virtual assistants, autonomous & connected cars, consumer appliances & drones has fuelled demand for high-end internet bandwidth

4. Social Media, Online Payments, E-commerce & E-learning

    • Most Indians have started consuming e-learning, e-commerce shopping, online medical consultation, video chatting, view content on OTT etc has also significantly fuelled the internet bandwidth
    • There has been an exponential growth of digital transactions across all sections of the society due to
      • demonetization further accelerated by pandemic,
      • the ease of convenience and
      • innovative technologies (UPI, Gpay, PayTM etc.)
    • Other key drivers for Internet growth are social media platforms predominantly Facebook, Whatsapp, LinkedIn, Twitter, Instagram & others.

5. Localization

    • Due to the variety of languages spoken across India, there is a high demand for different localized content. The growth of search in Hindi has grown a whopping 155 percent in recent years. Growth in traffic in other languages, too, was impressive. This all started in 2014 and has been growing at a consistent pace.

Factors that would drive growth in next decade

  1. Rise of Digital India:
    • Adoption of Aadhaar, eKYC, eSign, UPI, Digital Locker, India Health ID, and others will build a uniform layer of technology-enabled citizen services. This next level of e-governance would be achieved by 4 layers namely – presence less layer, paperless layer, cashless layer & consent layer. More about the India Digital Adoption can be read here.

2. BharatNet:

    • BharatNet is an ambitious project to provide fiber optic connectivity to all gram panchayats of India. Entire project is divided into 3 phases, the first phase is already about to be completed where 1.5 lac gram panchayats have been connected. The second phase would cover 1 lac gram panchayats and phase 3 would upgrade the infrastructure already deployed.

3. Building Greenfield Urban Infrastructure:

    • Around 40% of the Indian population will reside in urban cities by 2030 and will contribute as high as 75% of the GDP
    • 12 new smart cities coming up in next decade

4. Content-driven growth

    • Leapfrog in digital advertising – 1.2 billion to 2.6 billion by 2023
    • Exponential usage of online streaming music (13.8 CAGR to 0.7 billion), podcasts, and video on the demand
    • Increased social media network users by 42%
    • Increased Surveillance

5. IOT driven growth

6. Smart Wearables

7. Lowered entry barrier for the bottom mass of the pyramid

8. Pan India rollout of 5G

Technologies to fuel growth of the Internet

Following are few emerging technologies which we think will drive wider adoption of cloud, digitization and in turn drive the growth of the Internet.

Smart Operations

Industrial operations like Smart Factory, logistics, healthware etc. have been gathering a lot of traction as people start monitoring factories remotely. With this move, the manufacturing plant network is getting extended to cloud, IT and OT are getting integrated, sensors are being installed in factories, obviously all these are linked to cloud through edge computing which would lead to data and internet growth over the time.

Smart Operations is a gradual combination of traditional manufacturing and industrial practices with digital technologies, The companies need to invest in technologies like cloud computing, Business Intelligence (BI), Internet of Things (IoT), advanced sensor technologies, 3D printing, industrial robotics, data analytics, artificial intelligence (AI), machine learning (ML), enhanced machine-to-machine (M2M) communication along with building the capability of the workforce.


India could benefit hugely by increasing yield for food grains from 4 tons per hectare in 2012-17 to 5.4 tons per hectare by 2024 and 7.4 tons per hectare by 2034. Reaching these goals will require improvements in irrigation, farmer education, and access to inputs such as fertilizers and good-quality seeds.

Different & advanced techniques are helping agriculture industry as follows:

  • GIS mapping using drones
  • Pesticide spray using drones  
  • Use of AI and LIDAR in soil analysis for better yield; Aggregation of analytics at regional level for a larger benefit
  • Advanced manufacturing techniques to use the micronutrients
  • Near real-time weather forecasts for the Pre-harvest to customize fertilizers as per the soil quality
  • Allows governments to align resources and insurance agencies to customize the crop insurance premiums.
  • IoT sensors, smart supply chains, e-commerce platforms, data analytics and blockchain aids to “track food supply chain from farm to form” during Post-harvest phase.
  • Align drip irrigation by sensing soil moisture using IoT
  • Use of RFID and deploying drones for monitoring cattle’s health and field movement


Robotic in Healthcare

This is another dark horse and much talked about technology although in use since quite some time. Now there are new use cases and people have started using Robotic for health care and going forward this is going to grow multi-fold.

  • There are multiple cases of world-renowned cardiologist Tejas Pate who has carried out five remote coronary procedures with an Internet-connected robotic system.
  • Remote consulting, supervised surgeries along with Robotics will further give a boost to internet growth in the health sector.

OTT: Over The Top platform

OTT is riding high on consumers and will be driving Internet expansion exponentially.

  • According to a report published by KPMG, there are interesting statistics which reflect when it comes to OTT/Online video viewing, Age has no bar, City or income group has no dramatic differentiation.
  • Income group of less than Rs 3 lakh to above Rs 10 lakh, or Age group of 15-25 to 50+, all spends an average of 8-10 hours per week for online viewing. This is only going to go up exponentially.

What needs to be fixed with growth

No doubt, all of us are very bullish about the growth of the Internet in India. However along with just number growth, we feel a lot more to be done to take the Internet to the next level.

While all are talking about rapid growth, 5G, 6G and so on, do you feel the current Internet is good enough? Obviously, there are few inherent issues or problems which need to be fixed

  1. All of us are aware about the Project management triangle of Scope, Schedule, Cost & Quality, similarly for the Internet we need Good quality Internet with consistent speed rather than making bad quality unlimited internet.
  2. Probably in the race to penetrate and have growth of the Internet, service providers are forgetting the quality of services. It is about who provides more data at lower cost rather than who provides the same offering at much better and consistent quality.
  3. We lack infrastructure for universal access, today even while travelling on Expressways or National highways, we don’t get consistent 3G/4G connectivity & even call drops are frequent. In such a scenario, how will connected, autonomous cars work?
  4. Same are the issues in areas of well-connected Metros and Tier-2 & 3 cities where one finds it difficult to get consistent connectivity in Lifts, part of buildings, basements and so on.

We have certainly come a long way in our journey of building the Internet for India in the last 25 years; however service providers must focus on providing consistent, quality Internet access irrespective of the place. 

Parting thoughts…

Earlier we had said “Roti Kapda aur Makaan” (Food, Cloth & Shelter), Now it can be reworded as “Roti, Kapda, Makaan aur Internet” (Food, Cloth, Shelter and Internet). We believe the Internet is now part of everyone’s life, in fact in this connected world everything human as well as non-human objects all are somewhere part of the Internet ecosystem. 

The following are major factors to watch to make the Internet more accessible, affordable

  • Lower the Entry point barrier of technology
  • Make technology more accessible to all
  • How it would lead to more jobs
  • Lead the path for connected and the Gig economy



Biren Parekh