Plug: Medianama’s Report on Mobile Internet Numbers Show How Much More Relevant Data is Today, And Who Will Get Hurt When Reliance Jio comes in

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Medianama has a brilliant report of the Mobile Internet in India (You can purchase it here), Sep 2015 edition. From their post on it:

3G connections accounted for 41% of the total mobile internet user base for the top four telecom operators for the three-month period ending September 2014, up from 29% a year before. In absolute terms, the top four telecom operators have a total of 86.38 million 3G connections and 109.67 million 2G connections.

The quantum of data consumed on mobile grew by 127.54% while the number of mobile internet users grew by 40.40% from March 2014 to September 2015, suggesting that people are now consuming more data on mobile.

And Airtel seems to be able to charge more per user overall. But since revenue per MB has fallen, it means people are using significantly more megabytes:

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If the trend is going this way – and the report has much more – data will be more important than voice, at least in terms of growth. And a lot of data is already being used (whatsapp calling, viber, skype, facetime) for voice communication.

Plus, most connections are prepaid. Prepaid get way better deals for voice/data than postpaid. For me personally it’s way cheaper as well, and I have two sims. If data on any network is bad I just get a Sim from another network for data. This will be the future, and given that data is prepaid, it’s all about how well you provision it. Currently network upgrades – to handle the higher traffic – will be required, and the idea of tower consolidation (using one tower for a number of networks instead of multiple towers) will help.

Overall, looking at connections and user growth the obvious thing now is that all the margins for telcos will come from  expanding data usage.

What’s missing of course is the behemoth in the wings – Reliance Jio. But we’ve been saying that for 8 years now. Will they expand the market or just eat up marketshare by price cuts? Considering how much more data is growing than voice or SMS, Reliance Jio won’t even need to offer voice – it can just all be data, at a significantly lower price, and they’ll shake the foundations. (The report has more, but the impact to the top three – Airtel, Idea, Vodafone – is huge)

Disclosure: Medianama’s founder, Nikhil is a very good friend. You can assume my bias, but their content is top notch.

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2 COMMENTS

  1. Reliance Jio: they have only 4G license. Technically, it is fully data. That’s why R-Jio had to tie-up with phone-makers to make phones that support voice-over-LTE , because existing 4G phones use 4G only for internet(data), and use 2G for phone-calls.
    This positioning of Reliance will be a huge barrier for customers. Remember the early 2000’s when Reliance network would work only on their phones, and no SIM-card, etc. To me, it looks like Reliance is repeating that folly in 2015 too. Who will buy a new phone just to get into Reliance network? Or, is Reliance planning to do some carrier-subsidy thing (like telcos do in USA) , and recover the phone-cost (plus some profits) in 24/36 months contract? That will *not* work here. 100%.
    This is getting interesting. let’s see what they are planning to do.

    • Yes I think their phone only is a mess; but they could change in terms of having their sims for data, and nearly every phone now seems to support dual sim. If people use their sims for data and others for voice, that could still tilt the sutff in favour of reliance….

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