Indian Internet Users Up 54%, VoIP Strong (REDF, SIFY)

Includes: REDF, SIFY
by: David Jackson

The Internet and Mobile Association of India (OTC:IMAI) reported that the number of Internet users in India grew by 54% in 2005, and currently stands at 38.5 million.

The press release makes fascinating reading. First, given that 2005 isn't over yet (the press release is dated December 6th), it's not clear how the IMAI knew how the user base grew by 54% in 2005-6 over 2004-5. There's a woeful lack of definitions.

Second, the text gives you a strong sense of the degree of government involvement in the Indian economy. There's lots of talk about government promotion of Internet access and voice-over-IP (VoiP), and no mention whatsoever of private enterprise.

Having said that, the stats are indeed impressive, and the trends clear. On VoIP:

"India is already witnessing a huge jump in VoIP traffic. This has been possible due to the liberalization of Telecom license fees and the legalizing of VoIP within networks. Going forward, VoIP will play a crucial role in increasing internet user base and as competition grows, the VoIP will witness further lowering of rates, enabling more consumers to use the internet for their benefit."

Most Internet access in India is from cybercafes, an issue I've mentioned on the Internet Stock Blog in discussion of the two Indian Internet stocks that trade in the US, Satyam Infoway (ticker: SIFY), which owns and operates cybercafes and provides enterprise networking services, and (ticker: REDF) which is a content portal. The IMAI released a free report November 24th called Cybercafé Users' Ecommerce Activities (PDF here), which includes the following table:

Other interesting stats from the report:

  • 84% of online shoppers in cybercafes are 18-35 years old; 87% are male; and 55% are unmarried.
  • 81% of online shoppers in cybercafes have ATM cards, 60% credit cards and and 72% debit cards.
  • Online shoppers in cybercafes bought books (37%), electronic gadgets (41%), railway tickers (37%) and
    apparel (38%).

Like the date issue in the press release, the report contains gems for those willing to dig. According to the report, 87% of shoppers in cybercafes are male and 12% are female. That leaves 1%. Your guess is as good as mine; just don't use the comments on this post to speculate...