The Internet user base in the country is likely to reach 503 million by 2017, a report said. India will have over 500 million internet users by 2017 as compared with over 350 million as of June 2015, 'India On The Go - Mobile Internet Vision Report 2015' pointed out. Internet and Mobile Association of India (IAMAI) and KPMG report said that 2G user base in India is projected to decline in the coming years as more and more customers are expected to migrate from 2G to 3G. The 3G user base in India is rapidly growing and is projected to grow at a compound annual growth rate (CAGR) of 61.3% from 2013-17.

“The number of mobile Internet users in India was approximately 159 million in 2014. This number is expected to continue to grow rapidly and reach 503 million by end of year 2017 registering a CAGR of 27.8 percent for the period 2013-2017,” the report said.

The report states that rural India is steadily moving towards a more Internet friendly and exploratory mind-set. The active Internet user (AIU) base till 2014 in rural India was 6.7 percent of the overall rural population of 905 million and accounts for 61 million users. “4.4 percent of the total rural population used a mobile device to access the Internet, a figure that stood at a meagre 0.4 percent in the year 2012,” the report said.

"It is imperative to connect Indians through the internet, of which the mobile internet will play a key role since reliable accessibility will be the killer app that will bind the internet ecosystem together, increase adoption and enable innovation in business models around voice and data services," Ashvin Vellody, partner, management consulting, KPMG, India, said.

"While the urban market has not reached its saturation point, it will be non-metros and rural India that will be driving the internet growth in India. And this is where mobile internet will play a pivotal role," Subho Ray, president, IAMAI, said. "The advent of low-cost smartphones, coupled with low mobile tariffs, has empowered consumers in the hinterland to use data connectivity and we will seeing more usage of internet from these areas in the months to come," he added.

IAMAI president Dr. Subho Ray said that the Internet growth will be driven by users in rural areas, “The advent of low-cost smartphones coupled with low mobile tariffs has empowered consumers in the hinterland to use data connectivity and we will be seeing more usage from those areas in months to come.”

India has the second highest number of Internet users in the world after China, but its online penetration rate is still just 19 percent.

By Premji