5G is coming to India. Will Jio be able to dominate the market again?

India’s telecommunications sector is one of the oldest in the world and has seen several milestones in its nearly two centuries of existence. But one development that stands out, at least in the last decade, is the launch of Jio in September 2016. Jio with its cheaper 4G plans and free voice calls (among others) has changed consumer behavior in India. Also Read – Airtel CEO Gopal Vittal urges subscribers to buy a 5G-enabled smartphone

According to reports, in just six months after its launch, subscriber data usage in India has increased from 20 crore GB to 120 crore GB, data cost has come down and voice calls have become free. In the six years of its presence in the market, mobile users have grown from around 1.02 billion (in September 2016) to around 1.14 billion (in June 2022), telecom services in India have become among the world’s cheapest and telecom companies in India have grown from 12 in 2016 to four (Jio, Airtel, Vodafone Idea and BSNL-MTNL) in 2022. Also Read – Jio 6th Anniversary Deal: 75GB Extra Data, Discount Coupons and More

Today, Jio is the largest wireless service provider in India, capturing nearly 36% market share, according to TRAI data. It is also the largest wireline service provider with 27.29% market share. If that’s not enough, TRAI data also shows that Reliance Jio is the largest broadband service provider in the country, capturing 52.33% market share. Also Read – BSNL’s 4G Service Launch Delayed Again: Report

Needless to say, Jio has made a monumental impact on the Indian telecom sector in a short time. But the question remains whether he will be able to pull off a similar feat once again or not? Several factors, such as infrastructure, pricing, building an ecosystem, and financial health, among others, will play an important role here. But first, let’s talk about what Jio promised to deliver.

What Jio promised

Mukesh Ambani, at RIL’s Annual General Meeting (AGM) last month, revealed Jio’s roadmap for rolling out 5G services in India. During the event, the Chairman of RIL said that Jio will launch its 5G services in India by Diwali 2022. At the time of the launch, these services will be available in metropolitan cities including Delhi, Mumbai, Kolkata and Chennai. After the launch, Jio will expand its 5G network to other cities and towns in phases with the aim “to cover all of India in 18 months by December 2023”.

At the event, the company also said that its 5G network will be standalone (SA) without any reliance on the 4G network. This will allow the company to unlock true 5G speeds. “With standalone 5G, Jio can deliver powerful new services such as low latency, massive machine-to-machine communication, 5G voice, edge computing and network slicing, and metaverse,” said the company at the time.

What Works in Jio’s Favor

Plans aside, there are several factors working in Jio’s favor. First, Jio entered the 5G race with a clean slate. This means that unlike Airtel and Vodafone-Idea (Vi), Jio has cleared all of its debt to the Indian government. This gives the company the flexibility to use its profits and other funds to strengthen its services and expand its infrastructure.

Second, the company has acquired a large portfolio of 5G waves from the Department of Telecommunications (DoT) in the 5G spectrum which ends in July this year. The company has acquired the right to 5G airwaves in the 700MHz, 800MHz, 1800MHz, 3300MHz and 26GHz bands for Rs 88,078 crore for a period of 20 years. It was the biggest spender in the recently concluded 5G spectrum auction with the only company that bought airwaves in the 700 MHz band. Acquiring over-the-air waves in the 700 MHz band will allow the company to provide better indoor mobile network coverage using the sub-GHz spectrum band, even in densely populated areas.

Furthermore, Jio has committed a total investment of Rs 2 lakh crore to build its pan-India standalone 5G network, which will help the company expand and strengthen its network.

Ecosystem-wise, the 5G smartphone market in India is still in its infancy. Despite the democratization by smartphone makers, Jio still has room to target budget smartphone users, especially in the sub-10K smartphone market which has not been targeted by other smartphone makers yet. . More on that later.

but it is not that simple

This all sounds good, but network and coverage aside, several other factors will play a pivotal role in encouraging people to migrate from 4G network to 5G network. The first is the price and availability of 5G phones.

Smartphone manufacturers have been offering 5G-enabled smartphones for some time in India. Thanks to companies like Xiaomi and Realme, 5G-enabled smartphones are available at a starting price of Rs 15,000 in India. While these smartphones will drive the massive migration from 4G to 5G in India, the real game changer will be 5G phones under Rs 10,000 as they will target people in rural areas of the business where smartphones up to Rs 20,000 is still considered a luxury.

Now, no company is offering 5G phones under 10K in India. This is where Jio – as mentioned earlier – might have an edge over other smartphone makers. Ambani, at last month’s AGM, said Jio was working with Google to develop its own 5G smartphone. Although he did not share any details about the device in development, looking at Jio’s past trend i.e. the launch of JioPhone and JioPhone Next, it is safe to assume that the 5G phone of the company will be aimed at budget buyers and will prove to be a key driver in encouraging people to switch to 5G. It will also help increase Jio’s subscriber base.

Another factor that will play a decisive role is the price of 5G tariffs.

Telecom companies in India, including Jio, Airtel and Vi, increased their tariffs around November-December last year. These companies are expected to announce a second round of price hikes later this year with the aim of increasing their ARPU (average revenue per user) to around Rs 300 to Rs 350 in a bid to foster sustainability and expand their services in the country. .

When it comes to 5G tariffs, analysts have predicted that 5G services in India will not come cheap. Also, in an interview with Live Mint, Bharti Airtel VP Akhil Gupta said the company is looking into offering 5G connectivity at more expensive price plans instead of opting for premium plans. . Although it may motivate many people to migrate to 5G network, but not all and not everywhere. This, in turn, could slow the adoption of 5G in India. In a price-sensitive market like India, 5G price plans could be the key to unlocking the next subset of subscribers.

Jio disrupted India’s telecom market with its cheap 4G data plans when it launched its services in 2016. It remains to be seen whether it will be able to offer similar price plans for its 5G services or not. Promises and possibilities aside, the company certainly has all the ingredients it needs to usher India into the 5G era. Yet the question remains.

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