The Mukesh Ambani led telecom operator has been in the limelight for the last two years courtesy of the massive number of subscribers that it has amassed in such a short time. In comparison, Vodafone Idea, BSNL and Bharti Airtel have been in the telecom industry for a decade or more, but Reliance Jio, despite being a new entrant in this arena, took it by storm and the leading metric in its favour was the subscriber count. The telco first hit the headlines when it got to the 300 million mark. Now the next milestone of 500 million for Reliance Jio is not that far. Usually, people tend to think that cheap data prices are the driving force behind this growth, but there seems to be something else at work entirely.
Others Offering Cheap Data as Well
It is not that other telecom operators like Bharti Airtel and Vodafone Idea are not offering cheap data. On the contrary, Vodafone Idea is one telecom operator which is offering the most data and most offers to its subscribers. Despite these efforts, in the last quarter, Vodafone Idea lost subscribers, whereas Reliance Jio added another chunk of 14 million people on its network. Even in the network quality segment, Vodafone Idea tops the list with its upload speeds. Bharti Airtel’s prepaid portfolio runs synonymously with Reliance Jio’s but reasoning begs for a possible answer to the long strides that Reliance Jio has been making in subscriber count. The answer seems to be in the small device called JioPhone.
The Focus on Low Paying Population
One area which has gone amiss from the sight of every other telecom operator has been the rural population. While the consumption of data was aplenty in the urban centres, and this is where the most growth happened, the hinterlands of India stayed dormant on voice calls and legacy 2G networks. It wasn’t that they were not ready for 4G services, but they simply did not have a device to access the 4G internet services since the feature phones dominated this market. But, with the coming of JioPhone, this changed as the JioPhone formed a bridge between the more sophisticated android ecosystem and the already proliferated feature phones. This is what seems to be driving the new subscriber addition of Reliance Jio.
The Stance of Other Operators
Another question that begs to be answered is why are the other operators not worried? And that is simply because, in the longer term, Reliance Jio has been seen as a late entrant in FTTH (Fibre to the Home) business, and the telco has been recently using those subscribers to ramp up its ARPU (Average Revenue Per User). Bharti Airtel, on the other hand, has reached this pedestal first and hence boasts of a better active subscriber base.
Also, it is quite possible that the telecom companies see Reliance Jio’s effort in the JioPhone segment as the initial spark required in these markets. Because, as feature phone manufacturers have highlighted, once JioPhone Next comes into play, there will be healthy competition in the hybrid feature phone, and budget Android segment as well. In a similar manner, the current amassing of JioPhone subscribers might just as well be readying of the playground for other telcos.
