Just 85 lakh internet subscribers?

A TRAI report (17 April, 2007) contains statistics on Internet “subscribers”: 85.47 lakh in number.

Of this, the total number of broadband subscribers are 20.54 lakh as of 31 December 2006. That would probably comprise cyber cafes, home users and some SMEs. Alarmingly low, I think, though the quarterly growth rate of 13% might be a saving grace. (Extrapolation: 90 lakh connections by 2010)

I assume subscribers = number of connections rather than number of users. But even with an extrapolation of 5 users per connection, we’re talking about 10 million (1 crore) broadband users, and about 40 million (4 crore) users overall. That’s just about around IAMAI’s estimates of 42 million users by March 2007. Even there, the number of “active users” (access the net at least once a month) is about 30% lower than the reported figure.

Assuming most SNS and other web sites want a million users at least, and most sport content that serves broadband users the most, are we then way too early for the mushrooming internetworking portals? With an addressable (“broadband”) market of about 10 million users, growing to about 40 million in three years it may just mean a “not-just-the-web” strategy is quite as important for many portals – like the travel and job portals have done, selling through travel agents and offline recruiters/job fairs instead. Or, it means consolidation or desperate sales of funded companies once they realise that the market isn’t large enough for exits in the investors’ return horizon.

It’s time, perhaps, for the upcoming ventures to start thinking about making their valuations sound good with sub 500,000 users as well. What do you think?

Startup Dunia has an interesting post on this. (Which is where I got the links)