THE WIDER ANGLE. War of the airwaves

It’s only 13 months since Reliance Jio made its explosive entry into the market and already the Indian telecom industry is looking like a very different place. Reliance had, at last count, picked up 138 million subscribers and become the world’s biggest purveyor of data while bargains are raining on consumers.

The Reliance offensive has pushed its rivals into frenzied reorganisation mode. Moving into the industry’s top spot is Vodafone which has teamed up with Idea Cellular and together they’ll have around 400 million subscribers. Falling to second place is Airtel which with Tata Teleservices has 320 million subscribers. That includes the 44 million subscribers it’s added by taking over two other smaller rivals, Telenor and Videocon. It’s also working with Ericsson on setting up 5G networks.

While the battle’s only beginning, the numbers tell the whole story of how Jio has pulled the rug from under its competitors. In June 2016, Indians used slightly over 100GB of wireless data each month. By March 2017, that had multiplied several times to over 1200GB. A Reliance spokesman says: “80 per cent of that consumption would be with us.” That makes it the world’s largest mobile data-carrying network — ahead of even gargantuan China Mobile. “In the current scenario, a new company has a clearer roadmap. What was underestimated was the speed at which it would grow,” says an analyst.

Jio’s record-breaking run has been based on a few simple ideas and the biggest was data content. Consumers had “limited (data) usage because there wasn’t much content. We realised unless we created an ecosystem, it (data) won’t be used,” says a spokesman. The new ecosystem was combined with free voice calls to anywhere in India and spectacular data giveaways initially and rock-bottom prices later (the unlimited data plans cost only ₹153 for JioPhone users). This Diwali, Jio’s offering almost 100 per cent cashback. The relentless scale of Jio’s price war can be measured by the fact that in March it was offering 1GB of data for 17 paise. Other carriers were charging approximately ₹125 for the same amount of data at the time and even that had been slashed sharply since September 2016. Everyone’s now cut prices to match Jio.

The scale of Mukesh Ambani’s ambitions caught rivals off-guard and there’s no question that his entertainment blitzkrieg has been extraordinarily effective. Jio TV, for instance, offers a massive bouquet of 400 channels and has quickly become one of the highest-used apps globally. Its offerings include more than 150 Hindi channels, 60 English channels, 50 Telugu channels and 45 Tamil channels. In addition, it features a smorgasbord of about 150 news channels, 20 sports channels and 35 music channels.

Then, for movie buffs there’s Jio Cinema which has some 600 movies. Reliance has worked out tie-ups with top players such as Yashraj Films and Viacom 18 and offers movies in regional languages besides English and Hindi. It also has tie-ups with the newer programmes on demand players like Zee’s Ditto TV and ALTBalaji, the video-on-demand arm of Balaji Telefilms which Reliance has a stake in. For reading material, there’s Jio Newspapers with a head-spinning 250 city editions and Jio Magazines. And for music lovers there’s Jio Music.

Equally importantly, Jio’s offering VoLTE 4G phones at ₹1,500 that are returnable after three years. Reliance had to quickly close bookings and now says it'll deliver about 6 million mobiles soon after Diwali and reopen bookings.

The Reliance blitzkrieg’s an illustration of how quickly an industry’s landscape can change in our technology-driven era. “The way technology is moving it’s creating disruptions. The rate of change is much faster because there are waves of technology coming in,” says Hemant Joshi, technology, media and telecom leader, Deloitte India.

The other telecom industry giants who were initially wrong-footed by the Jio offensive are playing catch-up. But Reliance’s aggressive marketing has come at a bad time forcing them to slash prices when balance sheets are already stretched. Airtel, the bloodied survivor of earlier telecom wars, has tied up with Karbonn to offer a 4G smartphone, the A40, that will cost about ₹1,399 and won’t have to be returned.

Airtel also has a tie-up with Micromax for its Canvas 2 phone along with unlimited calls and 1GB a day of unlimited data for a year. On Monday it announced a new offer by which people can get bundled iPhone 7s for a down payment of ₹7,700 and 24 monthly payments of ₹2,499. Vodafone has just come out with an offer of 90GB of data for prepaid users for ₹399 and is likely to be offering bundled phones like Airtel and Reliance.

One of Vodafone’s key USPs is that all its entertainment can be accessed by space-conscious customers on one app, Vodafone Play. Says a Vodafone spokesman: “While they’re looking for entertainment on-the-go, customers are hesitant to register on multiple apps and frequently uninstall apps.”

Vodafone also offers more than 300 live streaming channels and movies in 14 languages and a mix of international and Indian TV shows. Besides that it also offers made-for-mobile content from ALTBalaji, video-on-demand platform Hooq and Eros Now. It recently tied-up with Yupp TV, which offers 250 channels in 14 Indian languages.

Three months ago, Reliance chairman Mukesh Ambani told shareholders that ₹200,000 crore had been spent to build Jio’s network. Amazingly, it has already reported an operating profit and its average revenue per subscriber (Arpu) is on par with other top players. Luckily for everyone, the market’s still growing at an extraordinary clip. IAMAI-IMRB estimated that 432 million Indians would have broadband services by June (Jio has grabbed around 41 per cent of this market) and growth will continue at a fast clip. Networking giant Cisco predicts India will have 829 million internet users by 2021.

Airtel chairman Sunil Mittal forecast last June that only four players and BSNL would be left in 24 months. His predictions could be coming true faster than anyone expected. Who will emerge survivors? There are question marks hanging over smaller players like Reliance Telecom and Aircel which had to call off their attempted merger. And even the bigger players know their data offerings can be matched by rivals. Says Joshi: “What ultimately matters will be the customers’ experience and economics. In the long run, the rules of economics apply to everyone and so do the rules of customers’ experience.”

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