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How Mukesh Ambani's Reliance Jio is cashing in on India's dual-SIM market with 'data-giri'

When existing carriers are not playing fair, Reliance Jio has found an unlikely ally in dual-SIM smartphones.

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After years of waiting, Mukesh Ambani today finally announced the commercial launch of Reliance Jio’s 4G network. To celebrate the launch, of what is Reliance Industries’ biggest bet in a year, Jio will offer unlimited services for free from September 5 till December 31. But there is certainly much more to it than meets the eye.

“We are announcing today, that starting coming Monday, the 5th of September 2016 Jio’s Data, Voice, Video and the full bouquet of Jio applications and content will be available for EVERYONE, absolutely FREE, till 31st December 2016,” Ambani said while addressing RIL’s annual general meeting. “Firstly, every Indian gets to enjoy Jio Digital Life. We Indians have come to appreciate and applaud Gandhigiri. Now we can all do “Data-giri”, which is an opportunity for every Indian to do unlimited good things, with unlimited data,” he added as one of the reasons for launching the Welcome Offer.

Out of the other reasons that India’s richest man announced, one of them that stood out was that “Jio gets to test and stabilize Jio’s interconnect with other operators and to ensure superior voice quality for calls to other networks.”

During Reliance Jio‘s Preview offer, users complained it was almost impossible to make calls to phone numbers on other networks. Jio alleged that existing carriers were not giving it enough points of interconnect that led to the call drops. It rivals, however, claim they were giving Jio enough points and the problem was at its network’s end, which could be over-congested due to the unlimited free usage Jio was offering to nearly 2.5 million subscribers.

As things stand right now, the situation does not seem to have improved. Ambani called out existing carriers during his speech and asked them to play fair. That they were obliged to provide every carrier points of interconnect to ensure that calls from users connected seamlessly.

“Incumbent operators have significant advantages over new entrants, since incumbents have well-established networks and existing customers. New entrants require fair access to both. Therefore, the onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles, when it comes to providing points of interconnect between their networks and Jio’s network,” Ambani said.

He also revealed that in the past week alone, Jio users faced five crore call failures to other networks, which he believed were because of insufficient points of interconnect. This, according to Ambani, gave “the impression to common Jio customers that voice is not working, when actually the incumbent operators are deliberately dropping calls”.

If existing carriers don’t play ball, Ambani and Reliance Jio have another weapon — dual-SIM smartphones. While it is clear that till the time the points of interconnect issue isn’t resolved, users are unlikely to shift to Jio as their primary number, they would surely be open to the idea of using Jio as their secondary connection. We have already gotten a taste of that with the serpentine queues outside Reliance Digital stores when Jio expanded its Preview Offer to more smartphones, including all Samsung 4G smartphones and those from Micromax, Lava, Intex and others.

According to Counterpoint Research’s Tarun Pathak, almost 90 percent of installed smartphone user base in India are dual-SIM enabled. “The penetration of dual sim smartphones is one of the highest in the world, 90 percent by installed base. During Q2 2016, 93 percent of the total smartphones sold were dual-SIMs. The trend is driven by large prepaid userbase in India along with one of the cheapest data plans in the world. Users often avail services of multiple operators to benefit from differential data pricing of the telcos,” Pathak said.

This means that users can use their existing smartphones and continue using their existing service provider, but also use Jio’s connection for data services. With free unlimited data, many users can be expected to stop their existing data packs provided Jio’s data network is better than what they currently have. That’s something Ambani and Jio are very sure about.

“Most legacy telecom providers have not built their networks for data or the Internet. They have built their network to support voice and SMS. As the Internet revolution caught on, they have had to retrofit their legacy networks to deal with data and IP as an afterthought,” Ambani said. “Jio, on the other hand, has created an all-IP network. The all-IP design also makes Jio’s network the most extensive and future-proof network in the world. It is a network built for ever increasing volumes of data and the best that the Internet has to offer,” he added.

From Jio’s perspective, if existing carriers do not fix the point of interconnect problem to create what if feels is a level playing field, Jio’s free usage would hurt their data revenues thanks to the immense popularity of dual-SIM smartphones. It won’t be a stretch of imagination for Jio to extend even the “Welcome Offer” beyond December 31, if it finds that its interconnect issue hasn’t been satisfactorily resolved and its users are still facing problems connecting to other networks. It does not matter how existing carriers deal with the interconnect problem, they are likely to lose either way. ALSO READ: 10 things you should know about Reliance Jio 4G LTE launch and tariff plans

Manish Singh contributed to this article.

  • Published Date: September 1, 2016 5:02 PM IST
  • Updated Date: September 1, 2016 5:04 PM IST