Internet economy expected to double by 2020: BCG-TiE report

?Priyanka Pani Mumbai | Updated on January 15, 2018

India has become the the second largest country in the world in terms of mobile Internet users at over 391 ​million, according to a report by Boston Consulting Group (BCG). However, the growth is all set to double at 650 ​million by 2020​, the report added.

Titled 'The $250 Billion Digital Volcano: Dormant No More'​, the report was conducted jointly by BCG and The Indus Entrepreneurs (TiE), which further added that in the next three years, the data consumption could potentially increase 10-14 times.

​Some of the interesting findings of the report were that the high speed mobile internet adoption is set to reach ​over ​550 ​million users by 2020, almost 85% of the total mobile internet users​. Average data consumption is projected to reach ​over ​7-10 GB per user per month by 2020.

The report reveals that while so far mobile internet users have proliferated and Smartphone users have gone up by 4 times, high speed internet users have still been limited only to ~56%. Thus, average data consumption per user continues to be low, standing at less than 1 GB data per month vis-a-vis developing economies like Indonesia and Brazil at 2–3 GB/month and developed economies like Japan and US at 9–11 GB/month.

"It is essential to understand the three forces that are now synergizing to unlock internet consumption in India," said Nimisha Jain, a BCG partner and report co-author. "Firstly, by 2020, 4G enabled devices are expected to grow 6 times to 550 Mn devices, constituting 70% devices in use. Secondly, reliable high speed data is becoming both ubiquitous as well as mass affordable (data rates have reduced to less than one-third in just 4–5 months). Lastly, digital content is proliferating as well as improving in quality, thus driving consumption​,​ "​ the report stated. ​

Increased high speed internet adoption, the report says, is expected to increase time spent online by 2020 to almost 3-4 times. Moreover, the amount of video consumed online is on the rise especially driven by online media and entertainment. As internet access ceases to be a constraint, consumers will become more quality conscious, resulting in an increase in the average video resolution. Driven by these changes in online consumption, average data consumption per user is set to increase by 10-14 times by 2020.

Published on April 07, 2017

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