Dhirendra Tripathi Moneycontrol News
It’s Teacher’s Day, as it was last year when Reliance Jio Infocomm launched its mobile services. Since then, voice has had a silent revolution (it’s gone almost free) and data a noisy one (not free but bet it’s never been cheaper). In no market in the world do the incumbents change the rule of the game but nor does a challenger set the rules in a manner Reliance did. Ever heard a 30-year-old established company accusing a Johnny-cum-lately of unfair trade?
In this passage of 365 days, the history of the country’s mobile services industry has undergone some rewriting. The enormity of the numbers takes time to get one’s head around. Even putting comparisons aside – most of them lose relevance -- their absolute size and scale are noteworthy.
A customer can talk endlessly today and use 1GB of data every day for a monthly spend of less than Rs 135. Successive reports by the telecom regulator have put Jio’s data speeds ahead of its rivals’.
One points out that data used to cost Rs 250 per GB before the Reliance Jio launch and comes for less than Rs 50 today. But the story doesn’t end there. Data prices have not only crashed but the entire economics of data pricing has been disturbed for good. Call up a service centre of any incumbent and one can virtually bargain for any amount of data at rock-bottom tariffs. Tariff plans be damned: Now it’s as if they can be totally customised.
At the customer end, two key steps went right for Jio. To begin with, customers appreciated the smooth experience they had at the time of taking a Jio connection – no documents, no photos but an Aadhaar ID was all that was needed. Post-connection verification was thus rendered irrelevant. Online recharging and various apps made it all the more pleasant. A foundation for a string of records that would be set in the coming months was thus laid.
The Reliance Industries subsidiary notched up 100 million subscribers within 170 days of its launch – translating into nearly 7 customers joining the company’s platform every single second -- a feat achieved nowhere in the world. As on date, the company has over 130 million subscribers.
While Reliance Jio remains the most competitive in terms of quality of network and pricing, its entry has helped its rivals to buck up. Data speeds on every platform have improved and most are now talking of moving to a 4G network in a year or so. As a result, all industry metrics have undergone a change, the consumer being the ultimate beneficiary. Average post-paid monthly mobile bills are down by Rs 80-100. Industry average revenue per user fell Rs 10 quarter-on-quarter to Rs 131 in January-March.
Records in an industry, like in sports, are meant to be broken but some are difficult to break and some are just impossible. Take this one. Before the Jio launch, India was number 155 in terms of mobile data consumption by its citizens. A year later, India consumes more data than any other country in the world. In August 2016, data consumed in India was 20 crore GB per month. That number stands revised to 150 crore GB, a seven-and-a-half-fold jump. Talk of Indians’ appetite for data.
The company last month also launched JioPhone, a 4G feature phone, but had to stop taking further bookings within 5 days of their August 24 opening. In an industry first, the company will after three years refund the entire Rs 1,500 it is taking for the sale of phones. Voice calling on the JioPhone will always be free, according to the company. The delivery of phones for the initial set of bookings is expected to start this month.
The impact of Reliance Jio has gone beyond the consumer, pricing and consumption side of the industry. It has forced its rivals -- still much bigger – to rethink and revise their plans. It led to the UK-based giant Vodafone watering down its commitment to India. It is currently in the throes of merging its Indian unit with Idea Cellular where the multinational company will initially hold 45 percent stake against Idea’s 35 percent with both the partners eventually holding equal stake in the combined entity.
A planned merger between Reliance Communications and Aircel is also underway. There is speculation of Bharti Airtel acquiring Tata Teleservices though doubts linger on that deal fructifying.
Number 2 and 3 combine to become number 1 and the old number 1 also goes shopping because the number 4 is just too much. An infant did teach the daddies a thing or two. Happy Teacher’s Day.
(Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.)
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