Unless their appetite for disruption is obsessive, it seems the storm dust is showing signs of settling down as operators prepare to roll up their sleeves to chase share of wallet. With the upcoming launch of their low cost, high-octane feature phone, RIL has audaciously thrown their hat in a ring (read low end users) that has been an industry black hole since 2003 – A story many Telcos would rather prefer to forget.
Jio’s Golden Goose:
Jio maybe nascent, but by no stretch of imagination can one call it naïve.
Having over 270 000 Kms of Fiber Optic carpet bombing the market with Santa stockings, this new kid on the block is re-writing the rules of Indian Internet (with special reference to broadband).
Anyone with an aorta of doubt about Jio’s home entertainment plans could do with some lessons in optimism.
However, it would be interesting to see the story unfold in the hyper competitive mobile space.
The Great Indian Mobile Story – Introducing the Jugaadu (Hacker) Indian
Jio’s sub $ 8 dual SIM 4G VoLTE feature phone (that can easily be categorized as a smartphone sans a touchscreen) strives to be a change catalyst for 500 M Indians. No doubt Jio has created history by cornering around 9 % active market share in record time, but a significant part of their conquest are subscribers from smaller Telcos viz. Telenor, Aircel , RCom , Tata Tele & Sistema.
This sets the stage for yet another battle of wits between the Telecom think tanks and the common man.
Having the opportunity of a ringside industry view, I can only say that there is many a slip between the cup and the lip especially when it comes to monetizing low end users. Right from the Rs 501 CDMA “Monsoon Hungama” debacle since 2003, freebie suckers have time and again beaten Telcos in their very own game.
Sure monthly wireless consumption has soared from 200 M GB/mnt in 2016 to 1.3 B GB/mnt but to treat this as a benchmark for projecting revenues from the yet-to-be on boarded “promiscuous” consumer, may just prove to be armchair forecasting – here’s why? :
The 3 things that sell (at least in India) are Entertainment, Entertainment and Entertainment !! reason why 90 % of Internet usage is because of video.
Coming back, if one analyses data consumption trends, it can broadly be categorized into active (online) and passive (offline) consumption.
It is the active consumption (viz. analytics, news, live TV, downloads, Online Advt., mobile banking, social media apps, video calling, online games etc.) that typically drives data ARPU / generates revenue for Telcos.
Now, even if data rates bottom out at Rs 50/GB (which roughly translates into less than 2 movies per month) maintaining m-o-m ARPUs is a tall ask. Also,
href=”http://www.livemint.com/Industry/ihSoNtmspHU0qcmh9l1Z4O/Reliance-Jio-could-be-the-secondary-SIM-for-most-users-surv.html”>the psychographic profiling of this segment
hardly demonstrates any prospects of active consumption anytime soon.
The Sideloader’s RTE (Right to Entertainment)!!
(Sideloading is similar to “upload” and “download”, but in reference to the process of transferring data between two local devices).
For a GB gobbler with a 2.4” screen handset that sports a 64 GB SD and is hotspot compatible, his first port of call will naturally be his fellow “pro piracy” peer for passive consumption and the nearest public / free hotspot active consumption (Its not unusual for low end users to exploit the 30 min. free Wi-Fi facility at railway stations even at the cost of skipping local trains). This priced SD card then becomes a family and friends entertainer at zero cost.
In conclusion, Jio’s gamble to work with several unknowns brings to mind a snippet dialogue from the Badshah of Bollywood’s flick.. “don’t underestimate the power of a common man” !!