India is one of the largest mobile phone markets in the world. Given the dense population of the Asian country, almost everyone has access to a smartphone. This means that every smartphone user has access to the internet. In December 2022, India’s telecommunication regulatory company noted that the country has over 800 million smartphone users.
Assuming that each smartphone has access to a wireless network – mobile data or WiFi – the country’s internet subscribers were expected to rise as well. But unlike the expectations of the telecom regularity of India, the number of internet subscribers has fallen exponentially. A record decrease in Indian internet subscribers was recorded between 2017 and 2022. This makes industry leaders wonder. What could be the reason, they ask?
According to the latest updates of December 2022, the yearly sales of mobile phones in the country lowered by 25%. While 168 million mobile phones were sold in 2021, the number lowered to a mere 150 million in 2022. Thus, the slip in mobile phone sales in India is apparent. As a result, this is impacting the internet growth in the country.
Why Internat Growth Has Become ‘Stagnant’ in India?
As mentioned earlier, most Indians have access to smartphones that have access to the internet. This means that every mobile phone user should have access to a wireless network – either WiFi or mobile data. If that were true, internet growth would have been phenomenal in India. But it turns out that the number of smartphone users in the country is falling. In turn, this is making internet growth “stalled” in India.
However, it is essential to note here that India is no different from the United States when it comes to the rising inflation rates and the looming recession. Even worse, the national poverty rate of India is higher than the U.S.
Rising Inflation, Poverty & Imports
So, a country that is enclaved by poverty and rising inflation can not afford to pay extravagant bills to internet providers. Plus, the rates of cell phones were also beyond the reach of average Indians throughout the outgoing year.
Another national research firm notes that Indians were accustomed to buying a new smartphone after a year. And this remained a trend till 2016. But now, the trend has shifted.
Now, average Indians barely purchase a new smartphone in at least 3 to 4 years’ time. Why? Simply because the prices of cell phones have gone up. Probing into the reasons for cell price hikes, a research firm finds a few things. Importing is the fundamental reason for high cell phone hikes, the research reveals. At least 90% of cell phones are imported to India from China. And given the geopolitical skirmishes, the maintenance costs are adding to rising cell phone prices.
As Indians refrain from buying new smartphones, the internet growth in the country has become stagnant.