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January 30, 2006

When will the Indian Internet market really take off?

Anand Sridharan of Bessemer Venture Partners has triggered off an interesting debate on his blog on when the Indian Internet market will really take off.

At $25-30 million ad revenues and $150-200 million e-commerce revenues (gross), the India internet market is clearly a small market today. There is also no doubt on the direction and that this would eventually become significant. The main question is ‘how soon’? I don’t have the answer, but here are my views on some of the relevant factors and on what needs to change for us to get there.

Let me start with my definition for ‘significant scale’. My medium-term target would be 30 million households having high quality (over 256 kbps), affordable ( under Rs. 500/month for PC-EMI + net access without download limitations), reliable internet access at home. I deliberately pick 30 million, as that is the number of households who’ll earn over Rs. 0.2 million/year in the 2010 timeframe.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of Venture Intelligence India newsletters and reports.