The landscape of Indian telecom industry has completely changed over the past decade. Be it the rise of smartphone usage or the switch from older 2G networks to high-speed 3G and 4G, there’s a lot that has changed. The call rates have also dropped, and now after Reliance Jio entering the market, the local and national outgoing calls have become completely free with most prepaid and postpaid plans. Mobile data, which was quite expensive a few months ago, has now become dirt cheap. While telecom operators are harping about aggressive data plans and speed, the greater challenge still lies, and it should be a reason to worry.
Yes, Reliance Jio has disrupted the telecom space by offering free high-speed 4G data for free during the initial six months after launch. Even now, the telecom operator has come up with Dhan Dhana Dhan offer, where Rs 309 recharge gives you complimentary usage for 84 days. To counter Jio, Idea and Airtel have also come up with similar plans that offer similar benefits to its customers. But it’s not just about tariff plans, an increasing number of smartphones, even the ones under Rs 7,000 feature 4G, thus ensuring that even first-time smartphone buyers can enjoy faster connectivity.
The changing landscape of content consumption
Not more than a year ago, a mobile data plan with 1GB allowance per month seemed sufficient. The amount of data was enough for browsing websites on the go, scrolling through social media timeline, chatting on WhatsApp or Messenger or uploading photos on Instagram. However, now, the usage pattern has completely changed. Even 5GB or 10GB of data is not sufficient anymore.
Currently, a lot of users stream videos on platforms such as YouTube, Netflix, Amazon Prime Video and Hotstar among others. CounterPoint Research analyst Tarun Pathak highlighted the fact that “due to aggressive data plans, the usage behavior of the consumers is also changing.” He further added saying that “if you go to Tier 2 cities, or Tier 3 and Tier 4 rural areas, the consumers who have never seen YouTube and other content services, are now streaming videos on different apps. In short, the consumer pattern is changing, and it is something that never goes backwards.” ALSO READ: Reliance Jio Dhan Dhana Dhan: After Airtel, Idea Cellular to launch new Rs 297, Rs 447 plans
As the content consumption will keep on increasing, the operators need to be prepared for the next level of demand. Instead of fighting the tariff wars, telecom operators should look at improving their service, which will be the biggest differentiator among telcos. Pathak further added saying “operators should invest in infrastructure as we will need a lot of bandwidth when content consumption increases further.” Currently, we have 300 million smartphone users, and in the coming two years, the number is expected to touch 500 million. And as the number of smartphone users rise, operators need to ensure they have the required infrastructure to cope up with the demand.
The problem to address right now
Tariff war is fine, and with India being an open market with majority of users on prepaid, operators have been matching plans with the competitor offering. Now, one thing that the operators keep talking about, apart from tariff is the network speed. We have seen Airtel ads claiming that they are the fastest 4G network as per Ookla’s Speedtest results. Then we have, Reliance Jio claiming that they are the fastest network as per TRAI’s MySpeed app. ALSO READ: Reliance Jio vs Airtel: Competition has moved beyond business, into squabbling
Sure, when you do a speed test, the apps log good download speeds between 10Mbps to 18Mbps or more. However, that doesn’t translate into seamless experience. You will see a lot of users posting screenshots from speed test results, but ask them about the reliability, and chances are that, you are not likely to get a positive response. ALSO READ: Reliance Jio sends legal notice to Ookla; demands withdrawal of Airtel’s fastest network ads.
The speed further fizzles out when streaming a high-definition video or when downloading big files. So even though the app logs high data speeds, you can’t completely rely on the connection as your broadband replacement.
Challenges for telcos going forward
It’s easy to say that telcos need to add more cell towers and improve infrastructure, but it isn’t an easy process. BGR India spoke to Mahesh Uppal, consultant on telecommunications regulations to understand about the challenges that lies ahead of telcos. He said, “without any doubt, telcos need to ensure that sufficient capacity is av across their service area. That will mean investing in infrastructure, putting up more towers and connecting them with fiber.”
He further added saying, “besides tariff wars, the real problem is wireless networks usually offer less capacity than their optical fiber or cable counterparts.” It’s clear, for better network feasibility and to bring congestion level down, operators needs to invest in better infrastructure.
Over the past few years, with the tariff crashing, businesses are becoming less and less viable. Investors will be looking at various factors before releasing funds, things like customer acquisition and return on investment. However, “the telecom industry no longer seems attractive to investors. So, the biggest challenge for telecom operators will be to convince investors to pump more money so they can ramp up their infrastructure,” Uppal added.
The infrastructure will also play a crucial role in ensuring less number of call drops and areas with better, powerful network. Now, it all remains to be seen how telecom operators can tackle the situation and improve their quality of service. We would like to hear from our readers about your experience with the existing telecom service provider. Be it with the network quality, or internet speeds and more.