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Originally published Sunday, September 5, 2010 at 10:01 PM

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Emerging economies will quickly add heft to global Internet

Brazil, Russia, India, China and Indonesia will double their Internet users to 1.2 billion by 2015, fueling growth at media companies and phone carriers, according to Boston Consulting Group.

Bloomberg News

Brazil, Russia, India, China and Indonesia will double their Internet users to 1.2 billion by 2015, fueling growth at media companies and phone carriers, according to Boston Consulting Group.

By then, the countries will have three times the Internet users of the United States and Japan combined, up from about two times at the end of 2009, the consulting firm said in a report released last week. Personal computers will double in the five countries to more than 920 million, and mobile phones with Internet access will aid growth, according to the report.

As consumers gain more access to the Net, they'll spend more time online, providing a boon to entertainment providers, the report said.

"The fastest-growing Internet markets are those with low penetration rates and strong economies, and the BRIC countries all fall into these categories," said Jake Li, an Internet analyst at Guotai Junan Securities in Shenzhen, China. "The opportunities for online advertising and e-commerce in these markets are huge."

The acronym BRIC refers to Brazil, Russia, India and China.

The changing demographics of online users will create new sources of innovation beyond the developed world, said Paul Saffo, a managing director at Discern, a San Francisco-based investment-research firm.

Just as South Koreans embraced social gaming years before Zynga Game Network's "FarmVille" caught on in the U.S., a developing country may be the first to popularize concepts such as "microcash," or small virtual payments, Saffo said.

"You have the perfect combination — local populations with intense local interest, and local entrepreneurs with tech savvy," Saffo said. "What you're doing here is not just creating more users and consumers, you're creating more creators."

Boston Consulting added Indonesia to the group because of its 240 million population and its proportion of mobile-phone users, which at 66 percent is higher than China and India, said David Michael, the report's lead author.

"Of the three markets, China, India and Indonesia, we believe that Indonesia has the best prospects for organic growth in telecommunications revenue," said Tucker Grinnan, head of Asian telecommunications research at HSBC Holdings in Hong Kong. "There is still a big rural opportunity."

Indonesia's wireless subscriptions will top 100 percent of the population by 2015, meaning some users will have multiple devices, according to Boston Consulting.

"On China, we remain very bullish," Grinnan said. "The China Internet space is my favorite subsector in the whole Asia-Pacific region."


Twenty percent of China's population owns a personal computer, and tens of millions get online at Internet cafes, giving China 384 million Internet users at the end of last year, almost triple the total in 2006, the report said.

In India, only 7 percent of the population was using the Internet at the end of 2009, the lowest of the five countries in the report. Indian users spend half an hour online a day, and productivity functions such as e-mail and job-hunting are their most popular activities. That will change as media companies take advantage of the growth in users, which will reach 19 percent by 2015, Michael said.

Internet users in Brazil and Russia will surge by 2015 to 74 percent and 55 percent of the population from about one-third last year, according to the report.

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