FROM THE EDITOR-IN-CHIEF
Two inventions that have transformed our lives are mobile phones and the Internet. Now that they are interminably linked to one another with the advent of smart phones, productivity has been increased to unimaginable levels. Today you can stay connected, stay entertained and stay informed, all at the same time. There are a total of 1 billion mobile phone subscribers in India, and 306 million of them already browse the web on their phones.
As we get more and more dependent on mobile phones, they don’t always deliver what we expect of them. Indian subscribers have been battling with a number of failed promises—from call drops, which are slowly driving us back to land lines, to slow data speeds, which have belied the hope the launch of 4G networks generated.
The booming market, which is struggling on service quality, is now in the midst of an upheaval, with India’s biggest business house, Reliance Industries, changing the rules of the game. Its chairman, Mukesh Ambani, while launching the Jio network on September 1, promised a miracle cure to everything that ails mobile telephony. In his speech, Ambani linked Jio with Prime Minister Narendra Modi’s Digital India mission and guaranteed significantly higher data speeds at lower prices. Though a new company, Reliance Jio has the tremendous backing of the Reliance group and the huge cash reserves that come with it.
Jio is hitting its rivals where it hurts. Knowing that most other service providers rely on voice calls for almost three-quarters of their revenue, Ambani has promised that voice calls will be free, and decided to bank on growing data usage. Though some other operators also use high-speed Long-Term Evolution (LTE) technology, Jio has made its entire network LTE-enabled, invested heavily in laying optic fibre for faster data transmission, and offered Voice over LTE (VoLTE), a new web-based technology, for better call quality. Jio’s ambition is to capture a chunk of the 4G market by acquiring 100 million customers in the first year, and then keep adding more users with attractive schemes. This is similar to the model used by the state-run China Mobile, which converted 400 million users to LTE in a matter of 18 months starting from 2014.
In 2002, Reliance’s first foray into the telecom business, which relied on CDMA networks under Reliance Infocomm, now with Anil Ambani, had failed to make an impact because the company got locked into technology that had low industry acceptance and could not provide efficient customer service. This time, it seems to have learnt from its mistakes. Apart from more robust technology, Reliance has gone after the big boys—Airtel, Vodafone and Idea—by providing 4G in all 22 circles for a pan-India presence right from the start. To attract new customers, it has announced a host of freebies, including free data usage for four months and free voice calls forever.
While this is an audacious gamble, Reliance Jio has the last-mover advantage and claims it has built a digital company from the ground up. It will be a challenge for legacy companies to compete with that. However, it’ll ultimately come down to the kind of service Reliance Jio can provide. Since the user base is small at the moment, its true test will come as subscriptions grow and as voice and data bandwidths come under pressure. Jio must not forget that this is a fickle market where portability is easy.
Our cover story, written by Deputy Editor M.G. Arun, looks at Reliance Jio’s ambitions and analyses whether or not it can achieve them. Other operators cannot be expected to roll over and die. The mobile war that Jio has sparked off will be interesting to follow.
The big positive is that the launch of Jio puts power back into the hands of the consumers. Not only will subscribers have the right to choose, other companies will be forced to improve their service quality. Disruption is often the best remedy, especially when it makes the consumer king. (Aroon Purie)