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Mukesh Ambani’s Reliance Jio sets the date for India’s internet inflection point

BG Mahesh · June 13, 2015 · 3 Comments

In 2010 Mukesh Ambani’s Reliance Industries (RIL) had promised India a wireless broadband revolution. India is expected to see the launch of 4G by 2012 but as expected all such big projects get delayed. We expected to see the internet inflection point by 2014 (what is inflection point).

India is confident of seeing an explosion of its internet user base in India because the big man himself made this announcement yesterday in the AGM of Reliance Industries. Mukesh Ambani spent half of his hour-long speech on Reliance Jio’s plans.

Mukesh Ambani’s 100-100-100 Broadband Mantra

Mukesh Ambani. Image source wikipedia

Few months ago I heard about Reliance Jio’s broadband vision.  Reliance wants to launch its broadband services in India’s 100 largest metros/cities and are targeting to get 100 million subscribers in the first 100 days. 100-100-100 is their mantra.

Mukesh Ambani wants India ranked amongst the top 10 countries on net penetration (from the current pathetic #142).

Highlights of Reliance Jio’s Broadband Rollout Plan

Mukesh Ambani's Reliance Jio

All newspapers, technical portals have carried about this exciting development. Few highlights,

  • R-Jio has spectrum in 20 of the 22 circles in the 800 Mhz and 1800 MHz bands. It also has access to 2300 MHz band across ALL 22 circles.
  • 4G spectrum investment: Rs 34,000 crore ($5.4 billion).
  • 4G CapEx investment: $5 billion.
  • R-Jio’s offering will include voice, high-speed data, digital commerce, media and payment services.
  • 4G-capable smartphone and tablet to cost below Rs 4,000 (as of now the cheapest 4G phone is priced at Rs 5,000). The biggest hurdle for the adoption of 3G services was the cost of 3G-capable smartphones.
  • Switch-And-Walk mobile app will allow you to copy contacts, messages, photos, music etc from any old phone (including feature phone) to the new R-Jio 4G-capable smartphone.
  • Monthly plan: Rs 300-500 (data usage details not revealed yet).
  • Over 250,000 kms of fiber optic cable laid across India. By 2018 this would more than double.
  • R-Jio is present in all 29 states of the country with physical presence in 18,000 cities/towns and 10,000 villages.
  • Wireless coverage to 80% of 1.3 billion population by December 2015. To achieve 100 percent network coverage by 2018.
  • To target 1 million homes for wired broadband by April 2016.
  • Initial rollout capacity can serve 100 million wireless broadband and 20 million fibre-to-the-home customers.
  • 500,000 sq feet cloud data center already operationalized.
  • Tele-density in India: Urban stands at 140%, rural stands at less than 50%. It would not be that easy to increase the penetration in price-sensitive rural India.
  • 75% of the telecom revenue is controlled by Bharti Airtel, Idea Cellular, and Vodafone. These telcos generate 15-20% of their revenues from data services (doubled since 2012).
  • 30% of customers account for about 70% of the Telecom industry’s revenue.

Reliance Jio Digital Services

Jio Drive, Jio Play (HD TV), Jio Beats (streaming music), Jio Money (digital payments) will be offered to each subscriber. These could be a competition to Times Internet owned Gaana.com, Tiger funded Saavn, Alibaba funded Paytm.

Their sister company Reliance Retail, which had a revenue of Rs 17,640 crore (Rs 417 crore profit) will venture into e-commerce.

Reliance Jio Will Fuel The Growth Of Local Language Portals

Sources say local language content will be offered on Jio mobile apps. R-Jio can expect a lot of first-time internet users from non-metros who are non-English speaking. What will this user base want to consume on the internet – could be content, ecommerce, govt services etc but they would want it in their language, not in English.

We can expect to see an explosion in the consumption of local language within a year. Oneindia.com is in the right space, rather in the right digital space!

Mobile Internet Users In India – Post Jio’s Announcement

In early 2015 we were at 300 million. India took 10 years to reach the first 200 million mark,

  • Early 2015: 300 million
  • 2104: 243 million
  • 2013: 213 million
  • 2012: 155 million
  • 2000: 54 million

Sales of smartphones in India doubled from 156 million units in 2013 to 364 million in 2014 — that growth is set to continue and take India past 500 million internet users by 2018, the bulk of whom will be on mobile devices.

In mid-2015, India has 150 million mobile internet users. With the launch of R-Jio wireless broadband services, this number should double by April 2016. Looks like 500 million internet users in India by 2018 is a pessimistic projection, we should expect 500 million mobile internet users by 2018 (if R-Jio’s plans succeed).

Projections get to be wrong. In 2011 it was projected the mobile ad market in China for 2014 would hit $1.1 billion but in reality it hit the $7 billion mark! India should prepare itself to see the same growth in the mobile space. The mobile ad spend in India is set to grow from $170 million in 2015 to $942.5 million in 2018. If R-Jio’s vision is any indication of the mobile internet user base then it is safe to assume by 2018 the mobile ad spend will be few billion dollars and not just $942.5 million.

Conclusion

Every internet player in India – ecommerce, video, auto, classifieds, education, finance, entertainment, lifestyle, news, tech – will benefit from this upcoming telecom revolution, if they are in the local language space.

With such aggressive plans from R-Jio, India can expect to see a disruption in digital services, in the mobile space. Let the digital war begin.

Mukesh Ambani wants to destroy the digital divide in India. Finally, we can expect to see the internet inflection point soon in India.

Also see,

  • Why Reliance is struggling to launch its 4G service
  • LTE will be faster than WiFi
  • Reliance to enable local grocery stores (kiranas) to transact online
  • BSNL to set-up 2,500 Wi-Fi hotspots across tourist spots in India
  • BSNL to setup 40,000 wi-fi hotspots by 2018 across India
  • Social media usage in rural India grows by 100 percent in 1 year
  • India’s E-Commerce 1/80th Size Of China’s
  • Jio Launch Effect: Mukesh Ambani tops Forbes Global Game Changers List 2017
  • Digital India Speeds Up, But We Thank Mukesh Ambani As Much As Modi (Sept 2017)
  • 5.5 lakh villages may get Wi-Fi facility by March 2019 (Sept 2017)
  • April 2018: Reliance Jio Infocomm Ltd’s disruptive entry in September 2016 led to $10 billion in annual savings for consumers and will expand India’s per capita GDP by about 5.65%
  • July 2018: Jio GigaFiber, will it boost India’s broadband penetration?

Related

Filed Under: Internet Tagged With: Broadband, broadband penetration, India's internet inflection point, reliance jio, rural india, wireless broadband

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  1. WiMAX in India - BG Mahesh | Mahesh | mahesh.com says:
    June 17, 2015 at 4:04 pm

    […] Update: Mukesh Ambani’s Reliance Jio sets the date for India’s internet inflection point […]

  2. India To Cross 400 Million Internet Users By Dec 2015 says:
    November 18, 2015 at 11:59 am

    […] Mukesh Ambani’s Reliance Jio sets the date for India’s internet inflection point […]

  3. Happy Birthday Oneindia! We are 10 years young now! - BG Mahesh | Mahesh | mahesh.com says:
    January 3, 2016 at 10:27 am

    […] seen very good growth in our mobile traffic in the last 2 years. The year 2016 could witness the inflection point in mobile internet. With mobile internet being made available across India we will see a huge demand for local […]

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