Something unusual is being reported in the Indian news media over the past few weeks. According to Rediff:

For the first time the number of Internet connections via the PC declined, from 9.27 million in the first quarter to 9.22 million in the second quarter, according to TRAI. In the same period, state-run telecom-service providers Bharat Sanchar Nigam and Mahanagar Telephone Nigam [Get Quote], which account for about 54% of the country’s total Internet customers, lost almost 3% of their subscribers.

This, when the number of users connecting to the internet using their mobile devices more than doubled from 16 million to 38 million users – according to the same article.

What is amazing and utterly counter-intuitive is that most cellular data services in India are based on GPRS based data access – leading to a rather slow and frustrating customer experience.

So what is causing this phenomenon – given that current mobile internet experience is largely constricted by low speeds, unreliable connections, lack of mobile optimized web pages and device limitations. One could be the low quality experience of Indian broadband service providers as also the cost.

Maybe the mobile internet experience demanded by Indian subscribers is again uniquely Indian – that there are certain channels that Indian subscribers are most interested in browsing – leading to an acceptable level of experience for mobile users – for e.g. cricket scores, news, bollywood, ringtones etc.

Another reason for the fixed broadband numbers could be just that they are misleading in the Indian context. In the urban Indian context (that is currently fueling most of the growth) – it could be again a uniquely Indian situation where two or more households subscribe to one broadband line – and then wirelessly share the bandwidth.

Whatever it is, it is counter intuitive. In every other society, where wireless internet usage has high penetration or is high growth – there is also a commensurate growth in fixed line broadband usage. Also, markets of high growth wireless have highly developed 3G and increasingly 4G deployments. Mobile providers in India are still largely using the 2.5G GPRS technology for its data access.

I would predict that as fixed line internet access in India becomes better -there will a sudden spike in subscriptions – ready markets for ATT and Verizon just poised to enter the Indian market.

Keep an eye on this forum for further updates.

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