Mobile internet user growth slowed down drastically in 2021, shows data

News: On March 8, the RBI launched a renewed payments service for feature phones. The service called UPI123Pay was a successor to BHIM USSD 2.0 service, which allows feature phones to make payments using interactive voice response (IVR), app functionality, missed calls, and proximity sound-based payments.

Why has the RBI launched the payment service for featured phones?

The Unified Payments Interface (UPI) has been successful among smartphone users in the country. So, this new service will be helpful in onboarding more users who are using feature phone for digital payments in India.

In India, there are nearly 400 million feature phone users. As per data by the end of December 2021, around 389 million mobile users did not have access to mobile internet, and around 765.8 million had access to mobile Internet

What are the challenges to promotion of digital payment in India?

The addition of new internet users has been declining for the last five years and dipped to single digits in 2021. Data indicates that it is well below the expected values from different estimates of the number of smartphone users.

Decline in growth of smartphone users in India: For instance, data from Statista shows that India was estimated to have over 931 million smartphone users in 2022. But The Indian Cellular and Electronics Association had said that India is expected to get 829 million smartphone users by 2022.

Given the proliferation of smartphones, the pace of replacement of feature phones would decline in rural and urban areas.

Way Ahead

The digital payment forecasts can be upended in India with the launch of smartphones at an affordable price band.

Source: The post is based on an article “Mobile Internet user growth slowed down drastically in 2021, shows data” published in the business standard on 12^th March 2022.