comscore Best of 2017: India witnessed unprecedented adaption of 4G and affordable mobile internet plans
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Best of 2017: India witnessed unprecedented adaption of 4G and affordable mobile internet plans

Reliance Jio triggered a revolution in the domestic telecom sector, made 4G truly mass, and led to new partnerships between operators and phone manufacturers.

reliance-jio-best-2017-bgr

2017 will go down as the year that altered India’s internet and telecom landscape forever. Access became easy and inexpensive. ‘Effectively free’ became the new buzzword. Competition intensified. Demand exploded. Industry debts hit new highs. Consolidation took place. And the domestic telecom sector came to be defined by the catchphrase ‘Jio Effect’. As the year draws to a close, we take stock of the significant developments that took place, those that will have far-reaching implications in 2018 and beyond. Also Read - Vi (Vodafone Idea) is now focusing on growing broadband business with You Broadband

Tariff wars

Also Read - Airtel introduces offers with more data and benefits during the pandemic

Reliance Jio that rolled out in September 2016 promised to offer free unlimited data and voice services until March 2017. But once its Happy New Year Offer ended, Jio decided to extend its free offerings until June 2017. That is essentially nine long months of free and unlimited 4G data that helped Jio appeal to the lowest common denominator and crack open the mass market. In six months, the network notched up 108 million customers of which 72 million were paying subscribers, who had bought the Rs 99 Jio Prime membership. Jio was already the fastest-growing telecom network in the world adding six lakh subscribers each day. Also Read - Jio now offers 300 minutes free talktime to JioPhone users: Here's how to avail the special offer

In July, came Jio’s first paid plan: Summer Surprise Offer. Jio customers could avail three months of unlimited 4G data for Rs 303. That was an unheard of pricing in Indian telecom. Reliance Industries chairman Mukesh Ambani announced that data had become cheaper than a vada pav (a popular Mumbai snack). 1 GB data was effectively priced at Rs 10. Jio’s low-cost offering led the industry into a domino effect, and the result was slashed tariffs across the board. An intense price war ensued, and it continues till date.

By August, the average cost of 1 GB data had dropped to $1.9 (Rs 122.5) declining 48 percent in just a year, according to the Mary Meeker Internet Trends Report 2017. And unsurprisingly, Jio data was priced way lower than the average at $0.17 (Rs 11) per GB. Soon enough, all major telcos (Airtel, Vodafone, Idea Cellular, BSNL) had come out with the lowest-of-low data plans that packed in as much data for as little money as possible. The Jio Effect was fully on display and customers biggest beneficiaries of the price wars relished every bit of it.

The 4G explosion

As tariffs dropped dramatically, monthly data consumption skyrocketed. Indians consumed more than 1.2 billion GB of data every month, as per June 2017. That is a nearly 10 times increase from June 2016 when less than 200 million GB of data was being consumed monthly. The ‘Jio Effect’ had started to play out. By 2017-end, mobile data consumption is expected to touch 391 PB and by 2018, it will hit 642 PB, estimates consulting firm Deloitte. 1 PB (or petabyte) amounts to 1,000 TB or 1 million GB.

As smartphones outnumber feature phones, mobile data usage is estimated to cross the 1,000-PB mark and reach 1,099 PB by 2019. By then more than 60 percent of India would be on smartphones. Data will come to form the core of telecom revenues. “Going forward we will have 60 percent revenue coming from data and 40 percent from voice,” Deloitte states. And much of that ought to be attributed to Jio. In July, India became the world’s second-largest 4G user base overtaking the US. Explosive growth in data usage, driven by attractive offers from operators will push India to the top spot by next year, predicts Counterpoint Research.

The low-cost phone revolution

Once mobile data consumption on smartphones soared, Jio turned its attention to the feature phone market that consisted of more than 400 million users. India is the only feature phone market in the world that is still growing. The 4G or even 3G mania has eluded this end of the market completely until the JioPhone happened in July.

Reliance announced a 4G-enabled feature phone at an ‘effective’ price of zero, that would provide customers free and unlimited voice calls along with bite-sized 4G data packs. Nowhere in the world was a 4G feature phone being offered at a price tag of Rs 1,500 refundable after three years that too. It was a masterstroke from Jio and it had identified a market segment that garnered least attention from phone manufacturers.

Once again, the Domino Effect played out this time bringing about a complete overhaul in the that neglected sub-3,000 segment of the market. Rival telcos from Airtel and Vodafone to even BSNL got into the handset game, partnered with domestic budget phone manufacturers who had nearly been obliterated by Chinese brands, and announced devices that combined basic smartphone functionalities with super-attractive data packs.

The battle for the lowest end of the phone market had begun. Airtel partnered with Karbonn, Lava, Intex and Celkon, Vodafone-Idea roped in Micromax, while state-owned BSNL tied up with Lava and Micromax. A new “India’s cheapest smartphone” launched every week. Meanwhile, the JioPhone recorded six million orders on its very first sale.

According to the World Bank, 67 percent of India s 1.34 billion people reside in rural areas. And nearly 400-500 million of them still use feature phones. What this pro-activeness from telcos did was induct several millions of them into the rapidly growing mobile internet universe. “While urban India went slowly from 2G to 3G to 4G, these customers will skip those stages. They ll get high-speed internet straight from nothing,” Tarun Pathak, Associate Director at Counterpoint Research, tells BGR India.

4G to 5G and beyond

India is now the world’s second-largest mobile internet market with over 450 million users, trailing only China. Overall mobile subscriptions have crossed 1.18 billion, as per TRAI data. It implies that all telcos have a massive opportunity to double or treble their 4G customers going ahead. Urban India has a 51 percent mobile internet penetration compared to rural India’s 16 percent. Hence, the next phase of the growth will happen in the budget end of the market where all telcos have already begun their battle for supremacy. Urban areas, meanwhile, will slowly move towards 5G that picked up some buzz in the latter half of the year.

In September, market leader Airtel became the first to deploy 5G technology (massive MIMO as it is called) in Bengaluru and Kolkata. The operator promises that its customers can enjoy 2-3 times faster data speeds on their existing 4G handsets without any upgrades. The deployment is part of Airtel s ongoing network transformation program, Project Leap, in which it has invested Rs 60,000 crore. It is estimated to increase carrier capacity by more than 5X, thereby making effective use of the current spectrum.

Massive MIMO will gradually be rolled out in other telecom circles as well. Vodafone and Jio too are taking measures to deploy the technology. Global network equipment makers Ericsson and Huawei are involved with telcos to make India 5G-ready by 2020. Ericsson believes that our 5G adoption could be on par with that of several developed nations’. The Indian government has even set up a Rs 500-crore fund to usher in the 5G revolution. Customers would only be too happy to oblige!

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  • Published Date: December 15, 2017 10:41 AM IST



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