3G usage and smartphone penetration will drive mobile internet growth; automation, cloud, and the internet of things will take off in the next two years.
Four disruptive technologies – mobile internet, cloud, the internet of things and automation of knowledge work – will drive India in coming years, according to a McKinsey Global Institute report.
With the world’s third-largest user base of 120 million, internet already contributes 1.6% or $30 billion to India’s GDP.
This is set to touch $100 billion by 2016, while the user base grows to 350-500 million.
And 75% of these users will access the internet primarily on mobile.
Mobile internet, hitherto an urban phenomenon, is expected to be the most impacting technology driving internet usage in India in the next couple of years. This, when the latest (December 2012 data) broadband penetration figure stands at a paltry 14.98 million connections, with average bandwidth speed of 1 Mbps — around 25% of the global average of 4-5 Mbps.
But 3G has almost single-handedly spawned phenomenal growth in mobile internet usage.
Nokia Siemens Network’s recent MBIT Index shows that while mobile data doubled to 92% on-year growth in 2012, 3G grew threefold, clocking a 196% on-year growth. 3G consumption per user grew 28% on-year, implying that a 3G user consumes 3.7 times more data than a 2G user.
3G clicked because the price differential with 2G improved drastically during 2012.
3G-enabled smartphones were seven times more expensive than 2G phones at the start of 2012, but by the year-end, they were only twice as expensive.
Anu Madgavkar, senior fellow at McKinsey Global Institute, said, “While traditional internet usage is low, mobile internet usage has been on the rise in India, including among the semi-urban and rural users who also use internet on smartphones or low-cost tablets.”
Going forward, rural usage will be driven by factors like how fast the Bharat Broadband Network is rolled out at the last mile, she said.
Also, the speed with which 4G reaches semi-urban areas, and the development of apps relating to agriculture, government information, regional languages, and innovative voice- and graphic-based apps for the less tech-savvy hold the key to India’s transformation, she said.
Cloud apps are also expected to grow exponentially in India, costing nothing – and this is how the cloud will rise in India, she said. Hybrid (public and private) cloud will take longer to make a difference to entities other than small and medium enterprises.
Besides, cloud presents a huge revenue opportunity for India’s software companies to develop new software, as well as partner with telecom companies and other industries like education and healthcare for new revenue-sharing models and pay-as-you-go models, said Madgavkar.
The internet of things or devices connected to each other – this technology is slowly taking root with automation slowly replacing manual, monotonous work, not only in factories but increasingly in software firms. Given the prospect of dependence on manual labour or human intervention becoming redundant soon, employees will feel the need to become tech-savvy, she said.
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