New Delhi [India], Apr. 7 : The Boston Consulting Group (BCG), along with the Indus Entrepreneurs (TiE) on Friday released a report titled 'The USD 250 Billion Digital Volcano: Dormant No More', which highlights the rapid expansion India's internet economy is undergoing.
With 391 Million users, India has already become the second highest country in terms of mobile internet users.
This is expected to grow rapidly to 650 Million mobile internet users by 2020. At the same time, data consumption by 2020 could potentially increase 10-14 times. The report further states that high speed mobile internet adoption is set to reach 550 million users by 2020 and average data consumption is projected to reach 7-10 GB per user per month by 2020.
"The report comes at a time, when the conversation has moved from 'Internet of Things' to 'Internet of Everything', and digitisation presents a great opportunity for multiple stakeholders.
Innovation is what leads to sustainability, and sustainable growth in the current entrepreneurship ecosystem will enable India to chart its own success story," said Geetika Dayal, Executive Director, TiE Delhi-NCR.
The report also revealed that although mobile internet users have proliferated and Smartphone users have gone up by four times, high speed internet users have still been limited only to 56 percent.
Thus, average data consumption per user continues to be low, standing at less than one GB data per month in comparison to developing economies like Indonesia and Brazil, where the average consumption stands at two to three GB per month and developed economies like Japan and US at nine to eleven GB per month.
"It is essential to understand the three forces that are now synergizing to unlock internet consumption in India.
Firstly, by 2020, 4G enabled devices are expected to grow 6 times to 550 Mn devices, constituting 70 percent 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 under five months).
Lastly, digital content is proliferating as well as improving in quality, thus driving consumption," said Nimisha Jain, a BCG partner and report co-author.
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.
India's internet economy is expected to double to become USD 250 Bn by 2020. E-commerce and financial services are projected to lead this growth. For instance, share of digital payment transactions could more than double to go up to 30 to 40 percent by 2020.
Digital economy will have a much broader influence beyond the direct economic impact. Digital adoption will deliver several citizen-centric social benefits like enhancing ease of doing business, improving access to services and products and transforming governance.
As the new digital paradigm emerges, adapting to change will become critical. For instance the impact on jobs is expected to be transformational. Increased automation will minimise manual and repetitive roles while roles in upcoming spaces become coveted.
Existing roles will also undergo transformation as low-value adding tasks get automated. New ways of working are expected to emerge with an increasingly flexible workforce optimising for efficiency.
At the same time, genesis of new technology-led business models will give impetus to entrepreneurial activity and create new opportunities.