Not just mobile telephony, rural subscribers are emerging as the fastest growing consumers of internet as well in the country.
According to the Internet and mobile Association of India (IAMAI), the number of rural internet users increased from 29 million as of December 2011 to 38 million at the end of June and is expected to touch 45 million by the end of December this year.
The penetration of internet users in rural India has grown from 2.6% in 2010 to 4.6% in 2012, a compounded annual growth rate of 73%, the industry body said in a report released on Thursday.
Internet growth in the urban areas is expected to print lower — the data is due in a week, IAMAI officials said.
At the end of December 2011, the total internet subscriber base in India stood at 121 million.
More interestingly, mobile internet is seen driving rural internet penetration.
“This is just the tip of the iceberg, in the next two years, a combination of affordable smart phones, optic fibre backbone and local language content is likely to change the beat all projections of internet growth in rural areas,” said Subho Ray, president of IAMAI.
The industry appears to be in agreement on that.
“The demand for mobile internet via smartphones is rapidly catching up in rural areas. Whereas earlier people in B and C towns would take a year to adapt to a new technology, today, because of the abundance of low-cost data packs, local language content and informative apps like Mandi Bhav, etc, rural people are having their first internet experience on the mobile, as handsets are more accessible than cyber cafes in smaller towns,” said Praveen Rajpal, CEO, Handygo Technologies, a mobile value added service (VAS) provider.
“So, while it may have taken five years to reach the 100 million internet mark, it will hardly take one year to reach the 100 million mobile-internet usage mark. A further drop in handset prices will aid internet penetration in rural areas further. Handygo’s IVR apps and tablet distribution in rural areas has shown an 85% growth in WAP (wireless application protocol) this year from rural areas,” said Rajpal.
As per Trai data, wireless subscription in urban areas barely increased (0.51%) from 596.98 million in May to 597.59 million at the end of June.
Wireless subscription in rural areas increased 1.24% over the same period, from 332.38 million to 336.51 million.
A CAG report also showed that the growth rate of mobile subscribers in rural areas during the last five years was higher at 485% compared with 233% in urban areas.
As per IAMAI, at the end of June , there were 3.6 million rural mobile internet users.
That’s up 7.2 times in the last two years.
Mobile operators are seen fuelling this growth.
“Most mobile operators today offer small data packs priced competitively at below `50 for unlimited data usage and downloads. Further content in regional languages and rural-specific apps help. This has resulted in a huge uptake in rural internet usage in the last 2-3 years. This growth is expected to continue, as the rural market is yet to be fully penetrated, while the urban market has almost reached saturation point,” said Somil Gupta, chairman, Planet 41 Mobi Ventures, another mobile VAS provider.
And what is getting the aam-aadmi hooked to the Net?
Entertainment, said IAMAI.
Going by its report, 75%of rural users use internet for entertainment like games, music, photos and video downloads, while 56% use it for communication. Devotional apps are yet another major source of internet downloads.
According to the government’s national broadband rollout plan, 2.5 lakh villages are to be Wi-Fi-enabled by November 2013. This will boost rural internet usage further.

It’s been a tricky few months for Facebook, very tricky indeed. Burned investors, a share price that has halved since its IPO and an over-priced acquisition still to make Facebook a mobile player, the future looks a lot bleaker than it did earlier this year.
At the end of 2011, the company had 845 million active users, and while advertising was responsible for 85% of its revenues, such a huge installed base meant that it would only took one leap of innovation for the company to carry on growing.
This quest for innovation hasn’t been easy. There is nothing more distracting for a company than when it is raising money or going to IPO. Creativity is pushed aside in favour of due diligence and scrutiny; it takes time to get back on track.
Whatever has happened since the Facebook share price tumbled, one thing is very clear. Facebook went to IPO to raise money and they were successful; recent announcement of Subscriptions and migrating Facebook Credits to local currency pricing proves that the company is still thinking.
The one thing that Facebook has always got right is how it has integrated itself into the web and it may be one of the internet’s staples, e-commerce, that may be the way the company evolves.
Facebook’s 900 million users contrasts very favourably to the 160 million claimed by Amazon and Ebay’s 100 million. Across in Silicon Valley seasoned investors are putting their money into e-commerce start-ups that are producing shopping apps for Facebook.
In the UK other more experienced companies are also optimistic about the opportunities for Facebook and e-commerce. Venda is a privately held and profitable UK company that was founded more than ten years as a cloud-based SaaS commerce pioneer and now increasingly works through Facebook and across mobile.
The company’s clients include global retailers such as Tesco, Superdrug, JVC, Urban Outfitters, Condé Nast and Jimmy Choo as well as institutions such as The Metropolitan Museum of Art. Its CEO, Eric Abensur believes that while consumers don’t view Facebook as a source of information about products, it is the social conversation that interests his customers.
“With the draw of such large audiences and the wealth of opinion exchanged about products, Facebook presents a highly tempting channel for retailers. Therefore, we believe Facebook can become a formidable recommendation engine driving consumers to buy products. We do not believe that operating just a Facebook store will deliver growth or address the needs of the consumer. We’ve begun to work with a number of brands on our platform to explore the possibilities of social commerce and how to best approach selling via a channel where people haven’t arrived with the explicit intention to buy,” he said.
According to the Gartner Group, by 2015, companies will generate 50% of web sales via their social presence and mobile applications. A recent report from eConsultancy said 90% of consumers trust recommendations from people they know, and Internet Retailer recently announced that 67% of consumers spend more online after getting advice from their online community of friends... all good news for Facebook.
PageHub is a Brighton-based start-up and one of the few global companies to be awarded Preferred Marketing Developer for Apps status by Facebook. Its cloud platform powers Facebook Apps for leading brands and manages consequent campaigns.
Its founder and CEO James Devonport Wood and believes Facebook will challenge companies such as Amazon by the ability to use credit cards on their Facebook accounts.
“Facebook recently announced the closure of their Credits product, which will be replaced with a new Subscription service similar to those available from Apple and Amazon. This new service allows users to add a credit card to their account and pay for transactions in their local currency using Facebook.