Can Reliance Jio Alter The Future of Indian Telecom?
Reliance Jio may look to disrupt some of the prominent geographies of existing operators, leading to a redistribution of the market share which is dominated by Airtel, Vodafone and Idea
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Reliance Jio's launch has definitely disrupted the telecom business with it's the amazing data plans, communication technology and software businesses through ownership, aggregation and delivery. But can India's largest start-up manage hundreds of millions of customer accounts and navigate the emerging business models of software and content? That's the Rs 1.5 trillion question.
A heavy-rush of people lining up in front retail stores to grab the internet freebies are being met with a waiting period of ten or more days for the SIM. The first challenge is to accept the application and meet the demand timely. If the availability factor is under stress, it can leave many disappointed. A lot of cases where people in the urban metros like Mumbai and Delhi have been turned down to file an application. The company seems to be noting this down, and they have planned to take e-KYC onboard soon to catch up and not lose customers.
Since the SIM only runs on 4G network, the consumers should have a 4G compatible handset too. Though the calling and internet is free, the phone connection will still come at other costs. It's no use for someone who doesn't have a 4G compatible phone. How will a middle-class man afford a new phone, when he has a completely functional one already?
Those who have been lucky to get an R-Jio connection are also facing network issues, most due to lack of adequate inter-connections with other operators. Subscribers complained of calls not going through, especially those made to users of other mobile operators.
Though R-Jio has been asking for more points of interconnections with Airtel, Vodafone and other operators, there have been no new inter-operator deals. For seamless connections, regulators must step in before it seriously impacts customers. Some other complaints were also registered about issues in porting their existing numbers.
"Despite these challenges, users are still excited and thrilled to experience a fast internet connection on their phones. With the kind of data tariff structures introduced following the launch of services by Reliance Jio Infocomm Limited (RJio), the data volumes and subscriber growth is expected to accelerate manifold" said an Industry expert from Reliance Communications.
While the data-centric strategy is all set to intensify competition and might also squeeze the market share, large telecom companies (Bharti Airtel Limited, Vodafone India Limited and Idea Cellular Limited) have already undertaken pre-emptive price cuts by offering higher data volumes for the same price to retain customers.
RJio may look to disrupt some of the prominent geographies of existing operators, leading to a redistribution of the market share which is concentrated among the top three operators (Airtel, Vodafone and Idea). They plan to reach out to the 90% of the mobile audience by 2017. The incumbents' debt profile will deteriorate in FY17 as the agency expects them to incur high capital expenditure on network expansion and acquisition of additional spectrum to compete with RJio.
It is and it will stay ahead in the race that for sure with the kind of services it is offering centered around data pricing, Rs.50 per GB which is the lowest in the world & access to its premium apps like JioCinema, JioBeats, JioChat, JioWallet etc for free but the real test will happen in the coming months when tariffs will be introduced post December 2016. Also, with Jio having access to Reliance's fiber network (largest private OFC network) and tie-up with several companies to share their fiber for transmitting the 4G tariff off the towers, Jio will have the strongest fiber backbone in the country.
Reliance is also planning to roll-out its own fiber optic network for covering more than 1,00,000 kilometers across India. Apart from intra circle OFC network, Jio is part of two international submarine cable network - Bay of Bengal and AAE-I. Sooner or later this year Mukesh Ambani is also planning to launch the open-network monitoring service, yes just like the way Airtel choose to be transparent! Then people would be able to track the 4-G network spots & signal towers to parallel compete with other operators. Seems like they don't want to leave any stone overturned.
The next big thing that R-Jio is in process of rolling out is a million Wi-Fi hotspots across India. By the middle of 2017, it plans to have 1 million Wi-Fi hotspots across the country at schools, colleges and other public places.
These announcements seem amazing at the moment but with a few setbacks that can hold back the amazing experience using 4G network seamlessly; such as to have a for a smooth HD calls both parties need to talking over 4G network enabled mobiles & using a Wi-Fi is preferable. Together all this and steps taken by other telecom companies would certainly change the present state-of-affairs of the soft infrastructure in India at least to a certain extent.