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1 | Creating viable

1 | Creating viable business models for inclusive growth through the National Optical Fiber Network The Current State of Internet Usage in India India has witnessed significant growth in telephone connectivity over the last six years, with tele-density increasing from 17.2 percent in December 2006 2 to 73.3 percent in December 2012 3 . The Internet penetration level, however, remains a challenge at 10.1 Internet users per 100 people 4 . The penetration levels of broadband are significantly lower and need to be addressed, given the established economic linkages between broadband penetration and GDP. As per World Bank estimates, a 10 percent increase in broadband penetration would yield a 1.38 percent increase in GDP growth on average for low/middle-income countries 5 – higher than the impact of mobile penetration on GDP growth 5 . Table 2: India’s ranking on key broadband indicators Indicator India’s Rank Value (2011) Fixed Broadband Penetration (Subs per 100 inhabitants) 112 1.0 Active Mobile Broadband Penetration (Subs per 100 inhabitants) 106 1.9 Percentage of households with Internet 80 6.0 Percentage of individuals using Internet 136 10.1 Source: ITU, The State Of Broadband 2012: Achieving Digital Inclusion For All, Sept 2012 2 TRAI, The Indian Telecom Services Performance Indicators, published 7 April 2007 3 TRAI, The Indian Telecom Services Performance Indicators, published 6 May 2013 4 World Bank database 5 Broadband Commission for Digital Development

Creating viable business models for inclusive growth through the National Optical Fiber Network | 2 Even within the economically comparable BRICSM grouping, India lags on key broadband indicators. Chart 1: Technology Consumption Metrics - BRICSM Source: The World Economic Forum and INSEAD, The Global Information Technology Report 2012 While the National Broadband Policy 2010 targeted 446 lakh fixed broadband subscribers and 265 lakh wireless broadband subscribers by 2012, data from the Telecom Regulatory Authority of India (TRAI) indicates that there were only about 150 lakh broadband subscribers in India as on January 2013 6 . Further, there is significant gap in Internet penetration between urban and rural India. As per a study conducted by the IAMAI and IMRB in 2012, active Internet users represented only 5 percent of the rural population as against 25 percent population in urban India 7 . Chart 2: Gap in rural-urban Internet usage Source: i-Cube/IMRB/ IAMAI, Internet in Rural India, 2012 6 ‘Highlights of Telecom Subscription Data as of 31 January 2013’, TRAI, dated 15th March 2013 7 IAMAI, IMRB, eTech, “Report on Internet in India (I-Cube)’, 2012

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