Jio one year on: How telecom industry was shook up
From data to voice, and even carving out a new 'smartfeature' phone segment, Mukesh Ambani's company has had a profound impact in the past 12 months.
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Reliance Jio, which officially began its journey on September 5, 2016, celebrates a year of being in the business today. Why is that a milestone? Because in the past 12 months, the telecom operator has not only managed to capture a customer base of more than 100 million but also the imagination of the millions of Indians — with every one of its ambitious ventures.
Bankrolled by Mukesh Ambani's, Reliance Jio broke into the closely guarded group of telecom operators, and to its credit, within a short period of time, found itself becoming the biggest player in the pack.
This rise, however, has not come at a cost. After investing over 1.9 lakh crore on setting up the infrastructure for the services, this newest entrant is still bleeding itself and the telecom industry dry to bring in more and more users. Jio's predatory business model, typified by its use of "Summer Surprise" and "Dhan Dhana Dhan" offers, saw it disrupt the market by working around and not within TRAI-framed guidelines.
The telecom operator has also been accused of flouting net neutrality laws in its pursuit of bringing a never-before-seen disruption to the market.
However, Jio's impact has been far greater than just industry-wide disruption and free voice calls. Here's looking at the five ways in which Reliance Jio has managed to shake up things for the telecom industry the world over.
Jio has been bad news for the industry but has turned out to be great news for consumers. After the operator jumped into the ring with its predatory pricing, all the big players (Airtel, Idea, Vodafone) were dragged into a price-war that they had avoided for long.
Post Jio's entry, not just tariff rates dropped, but the price of data and voice calls also dropped across the board. To keep pace with Jio, established telecom operators that had previously charged exorbitant amounts for data and calls, offered the latter for free, while the cost of data at an average came down to Rs 50 for a GB.
The data revolution
India, which ranked 155th in terms of data consumption before the entry of Jio, saw itself become the biggest consumer of data by volume in the world within a matter of months. This Jio-led revolution in the country has translated into data consumption going up from 20 crore GB per month to over 150 crore GB per month – 125 crore GB of it Jio claimed is by its users alone.
4G VoLTE voice call revolution
At a time when other telecom operators charged users hundreds of rupees every month for making calls over their networks, Mukesh Ambani-owned Reliance Jio entered the telecom sector with a bang, promising unlimited voice calls using its state-of-the-art VoLTE network.
Analysts suggest it was this promise of free voice calls and not cheap data that eventually helped the operator poach millions of users from its competitors. However, a little-known fact is that Jio was able to offer free calling with little damage to its operating costs.
Using the state of the art VoLTE framework, Jio provided superior call quality at a cost, which was a mere fraction of what its competitors were incurring on traditional voice calls. This prompted the competition to upgrade their networks to the latest standards, with Airtel and Vodafone announcing the launch of VoLTE networks in the coming days.
After wooing users with 4G data at throwaway prices and free calling, Jio set its sights on disrupting the prevailing status quo in the wired broadband sector of the telecom industry.
Using the preview of JioFiber – a fibre optic-based high-speed broadband service – Jio is currently testing the waters in six cities: Mumbai, Delhi-NCR, Ahmedabad, Jamnagar, Surat, and Vadodara.
The company is running a Jio-style three-month introductory offer under which JioFiber will offer free high-speed internet – up to 100mbps – for the first 90 days. Users just need to pay a one-time refundable sum of Rs 4,500 for the high-speed Wi-Fi router.
In anticipation of JioFiber's commercial operations across more than 100 cities in the country, existing players have already tweaked plans by doubling speeds and data allowance to ensure they can take on Jio when it finally commences commercial operations.
Creation of a new 4G 'smartfeature' phone segment
Another blockbuster from its first year of commercial business has been the announcement of the JioPhone. Mukesh Ambani at Reliance Industries' Annual General Meeting (AGM) on July 21, 2017, upped the stakes when he announced a 4G-enabled feature phone, essentially for "free".
Christened the JioPhone, the device which was launched with the aim of migrating 50 crore 2G/3G users in the country to the 4G based Jio platform, is doing much more than just that. Though it has still not made its way to the stores – the first batch is expected to hit the market on September 21, 2017.
The device has brought the low-cost smartphone market into action, with device makers such as Intex and Lava launching 4G low-cost smart feature phones at attractive prices. Vodafone and Airtel have also jumped into the fray and announced smartphones that would cost less than Rs 2,500.