“In less than 170 days, more than 100 million customers signed up for Jio's services. On an average, Jio added seven customers per second every single day. This was the fastest adoption of any technology service, anywhere in the world. Faster than even Facebook, WhatsApp, and Skype.”
“Today, we have 421 million mobile broadband subscribers on our 4G network. And they consume, on an average, nearly 20 GB of broadband data every month.”
It might seem that the above two assessments by Mukesh Ambani at the RIL AGMs of 2017 and 2022, respectively, talk about milestones achieved by the oil-to-telecom conglomerate. But many would say that more than anything else, they characterise the journey of India’s digital economy.
In the pre-Jio era of Indian telecom, data was a costly proposition. The average cost of one gigabyte (GB) of mobile data was Rs 226 in 2015, a year before the launch of Jio. Those were the days when people would visit the neighbourhood store every few weeks to replenish their phone’s storage with new music and films.
All that changed with Jio’s launch in late 2016. The company’s move to jumpstart the new telecom network by offering free voice calls across 18,000 cities and 2 lakh villages shook up the industry and thrilled potential customers. But the bigger thing was that mobile broadband data was also offered free of cost.
While this triggered a bloody pricing war over the next couple of years, the cost of data reduced drastically for the user. In a 2019 report, the Telecom Regulatory Authority of India (TRAI) said that prices of mobile data had fallen by about 95 per cent (to Rs 11.78 per GB) in three years.
“The acceleration from 3G to 4G was driven by Jio, bringing more value to consumers of high-speed data at a highly affordable price point, the cheapest in the world at the time. This forced the competition to offer data at affordable rates,” said Neil Shah, VP, Research, Counterpoint, an analytics and research firm.
It also had a tremendous knock-on effect on the entire digital economy and helped the upcoming tech startup ecosystem take root and flourish, say industry watchers.
“As a result, the first internet experience for a majority of Indians was on their smartphone. Building internet services for them was, therefore, smartphone led. Startups had a much larger addressable market, and the cost of reaching and retaining their customers came down exponentially,” said Pranav Pai, Managing Partner of venture capital (VC) firm 3One4 Capital.
“Over $400 billion of market cap has already been built on top of this foundation, and we can see it going to $1 trillion within this decade,” he added.
Coupled with the digital architecture of the India Stack that comprises pillars like Aadhaar, United Payments Interface (UPI), etc., cheap data has unleashed a massive uptake of online content, digital payments, and e-commerce. According to government data, the number of digital transactions have risen from 72 crore in October 2016 (the month before demonetisation and a month after Jio’s launch) to 989 crore in October 2022 — a 14X jump in six years.
“At first, Jio led to a mass adoption of the internet in the country, then came the consumption of social media (SM) and content, and thereafter, digital transactions. Before Jio, the question that used to be asked was how to reach the consumer or how will a farmer know about the latest government scheme. Today, that’s not a question anymore,” said Sreedhar Prasad, an internet sector expert.
As a result of the increasing digital transactions, India has become one of the focal points of the global tech startup investment landscape. While many VC firms had already set up shop in India around 2010, there were very few startups which saw large funding rounds.
This was because low internet penetration meant a very small addressable market in India — only 7.5 percent of the population was hooked up to the internet in 2010. That year, 415 startups raised a total of $513 million in the country, according to Tracxn data.
As the internet penetration grew to around 15 percent in 2015, startup funding peaked at $8.2 billion across 1,662 deals — an average cheque size of about $5 million. But, the growth in internet adoption brought about by Jio’s entry — 30 percent penetration by 2020 — worked wonders for startups.
When the pandemic came in 2020, it was all about contactless commerce, and the tech sector was ready to capitalise on it. Barring the disruption created by the lockdown in the first few months, digital payments and e-commerce rose multi-fold.
Edtech startups offering online courses, like Byju’s and Unacademy, hyperlocal commerce companies like Zomato and Swiggy, e-commerce marketplaces like Udaan and Meesho, fintech unicorns like Paytm, BharatPe, and Razorpay, among others, have raised billions of dollars in big-ticket investments in the last couple of years.
Despite a global slowdown in tech investment, around 2,000 Indian startups have raised a total of $26 billion this year — at an average cheque size of $13 million, a 160 percent growth compared to the pre-Jio year of 2015.
“All these companies rode the wave of data consumption that Jio brought on. Any unicorn — whether B2B or B2C — which serves the mass market of consumers or merchants has benefitted,” said Prasad.
(Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.)
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