More users go digital as pricing war heats up amidst telcos

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The entry of Jio in the Indian telecom space has rained offers on consumers but it has also had a huge impact on digital consumption.
The disruption caused by the new entrant initiated a price war, which led to prices for data plans – including for 4G -- falling in a big way. This led to a shift in the way people consumed data.

According to a report by KPMG-FICCI, 4G connections in India are expected to grow five-fold from 2016 to 2021 at a compound annual growth rate (CAGR) of 38 percent. About 80 percent of mobile broadband connections are expected to be either 3G or 4G, which the former expected to surpass 2G by 2019.

Less to pay, more to watch

Before the 4G revolution got underway in India, watching video online seemed to be a not-so-affordable option but as data rates came down due to competition, video streaming gained the most from it.

According to the report, video streaming apps saw a 336 percent increase in their usage after Jio launch.

The battle between telcos is not just about prices: they are also competing with each other over which offers the fastest speeds. In a recent commercial, Bharti Airtel claimed to be the fastest internet provider, offering global broadband tester Ookla’s speed certificate as “proof”.
Cheap access to high speed data is also increasing the quantum of data each user consumes: the report sees a 5.5 times rise in data consumption per mobile user by 2021.

Video consumption shifting from TV?

Digital video viewing is growing 50 percent year-on-year and video as a segment is expected to grow at a CAGR of 40 percent by 2021.
Over the top (OTT) players, such as Amazon Prime, Voot and Jio apps, have introduced viewers to an alternate way to consume video.

These players are leveraging cheaper data rates offered by telcos to make viewers shift from traditional television to smartphones.