India had about 471.7 million mobile users at the end of September, but only 2 million, or 0.42 percent, use the Internet at least once a month, according to a survey by Internet & Mobile Association of India (IAMAI) and research firm IMRB International.
IAMAI is an industry body focused on promoting online and mobile value-added services in the country.
About 127 million of these subscribers have mobile phones that are Internet ready, but only 12 million have used the Internet on their mobile phones at least once in the last year, according to the survey results released Tuesday.
India's mobile subscribers had crossed the 500 million mark by the end of November, according to the Telecom Regulatory Authority of India (TRAI).
A large number of the new additions are coming from rural markets, as well as people attracted by the rock-bottom tariffs for voice in the market, analysts said.
Fierce competition among operators has pushed down tariffs to below 0.01 Indian rupees (US$0.0002) per second. Subscribers were previously usually charged by the minute.
To boost revenue, operators are focusing on value-added services, including Internet services. Some of them are planning to set up application stores. Aircel, a large operator, said on Tuesday that it had tied with Indian IT services company, Infosys Technologies, to set up a mobile application store around Infosys' Flypp application platform.
To address the problem of the high cost of Internet connectivity on mobile phones, some operators are also cutting rates and even throwing in free services.
Sistema Shyam TeleServices, a new entrant, for example, offered free access to a number of sites including Wikipedia, Yahoo, and some educational sites, besides throwing in free download limits as part of its inaugural package.