Business

How Jio And 4G Have Made Data The Only Game In Town – Taking India To The Top

Reliance Industries chairman Mukesh Ambani at a Jio event. (digit.in)
Snapshot
  • Jio has made India lead the world in 4G data.  The lesson from the 4G LTE revolution is that lower tariffs are what boost usage, and 5G will not be any exception.

The Telecom Regulatory Authority of India’s (TRAI’s) latest report on wireless data services underscores the truly revolutionary nature of the transformation brought about in this sector in just three years – mainly through the entry of Reliance Jio in 2016.

To flag the changes in brief:

One, India has become the largest wireless data market in the world, with average monthly consumption per user rising to 8 GB, twice as much as the US, and four times as much as the UK. Only South Korea (6 GB) comes anywhere near the scale of average Indian usage.

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Two, this change has come along with – or possibly because of – the lowest data tariffs in the world. The average cost of data per GB is Rs 11.78. This compares with the extortionate rate of Rs 226 per GB before Jio entered the picture. Average revenues on data per user is just over Rs 90 per month.

Three, change has completely shifted business models away from voice, with data subscribers doubling between 2014 and 2018, from 281 million to 578 million. From just under 30 per cent of users, data users now comprise half the wireless user base (49.17 per cent in 2018, and possibly more than 50 per cent now). While overall wireless user growth were flat in 2018 at 1,176 million, data users rose 36 per cent. Data is the only game in town. Revenues from data for the industry rose 40 per cent from Rs 38,882 crore in 2017 to Rs 54,671 crore 2018.

Four, Reliance Jio and 4G LTE are key factors in this data usage revolution. Of the 578 million data subscribers, 436 million are on 4G technology. 2G and 3G are on the decline.

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Five, with the rise of 4G, the more spectrum-efficient CDMA (code division multiple access) technology business is now practically wiped out. This ignominious end to CDMA wireless has been accentuated by the demise of the two companies using this technology – Reliance Communications and Tata Teleservices.

If we note that all the above data relates to 2018 and not 2019, where these trends have accelerated further, we can truly note the revolution we have witnessed in just three years.

Jio has made India lead the world in 4G data. 5G, if it gets going, will take India even higher as long as the government does not make this spectrum unduly pricey. The lesson from the 4G LTE revolution is that lower tariffs are what boost usage, and 5G will not be any exception.

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