Ever since Reliance Jio made its spectacular game-changing foray into the Indian telecom scene, Reliance and Airtel have been at loggerheads with each other. Their claims over which is the fastest internet network in India is a rather interesting debate to follow given how saturated the telecom industry was, how dominant a player Airtel has been, and how young Reliance Jio is.
Recent data published by the TRAI indicates that Reliance Jio has gone and done the unimaginable by offering almost double the download speeds offered by its nearest rivals- Idea Cellular and Airtel.
As per TRAI, citing data from MySpeed, the speed that Jio was offering its customers for downloads was at 16.48 Mbps in the month of February, while Idea and Airtel offered only 8.33 Mbps and 7.66 Mbps, respectively. Despite the fact that the download speed of Reliance Jio had shown a marginal decline to 16.48 Mbps from 17.42 Mbps in January, it is still the fastest Internet network in India available to its consumers. Even Idea Cellular and Airtel saw a marginal decline in their data speeds post the month of January.
Further, TRAI’s data shows that even networks such as Vodafone, BSNL, Tata Docomo, and Aircel experienced a dip in their download speeds, to 5.66 Mbps, 2.01 Mbps, 2.52 Mbps, and 2.01 Mbps, respectively.
But, Clash of Titans Is Confusing Customers
Both, Jio and Airtel have been at it for a few months now, each claiming his own dominance in the industry with the fastest network. Airtel has confidently been boasting of the fastest networks for a while now, even over advertisements. The data, however, published by TRAI suggests otherwise. Jio has not only challenged these claims made by Airtel, it is also letting the actual numbers do all the talking for it now.
Further, the Advertising Standards Council of India (ASCI) has found Airtel’s advertisements claiming it to be the “official” fastest network misleading, and has asked the telecom player to either modify the content or withdraw the advert altogether, by the 11th of April.
Despite both Airtel as well as Ookla firmly contesting that Airtel still holds the title of being the fastest mobile network in India, we aren’t very convinced. A recently published Economic Times article suggests that Reliance Jio’s extension of subscriptions deadlines for its paid plans to April 15, plus its decision to waive monthly recharges for three months will surely put a dent in earnings of Airtel, Vodafone, and Idea Cellular.
Analysts are also suggesting that the currently evident disruption in the market brought by Reliance Jio will most likely last even longer than previously anticipated, and will also result in a lot of financial stress for other telecom players. Making big investments in the 4G network sphere will also get more difficult. Even though Airtel has as much data coverage and capacity as rival Jio does, the capacity requirements are bound to keep getting higher in the major cities.
Meanwhile, however, it seems like Reliance Jio will continue on its subscriber-acquiring spree. The newest telecom operator in the Indian scenario has claimed to rope in 72 million paid users by the end of March 2017. Of its 122 million plus overall subscribers, the operator now has about 60% subscribers who have signed up for its ‘Prime’ membership.
According to the estimates, 30% of Jio’s subscribers are just secondary connections taken by individuals, to get free data. Of the remaining 70% subscribers, Jio has targeted to convert at least two-thirds to Jio Prime’s loyalty programme.
As for Airtel, it’s combined user base was at 37.7 million (3G and 4G) at the end of December 2016. This number was a drop from 41.3 million subscribers that Airtel had just three months earlier.
Whether or not the fastest network in the nation, Jio’s nearly 72 million paid subscribers makes it the largest provider of paid broadband services in the country. But analysts are still fixating on questions about the ability of Reliance Jio to retain its customers, in what is a very aggressive, competitive market at the moment.
The telecom operator managed to sign up over 72 crore subscribers in just one month of its membership programme Jio Prime, but as per a Goldman Sachs Report, it is probably unlikely that all the customers who have taken Jio Prime will remain the operator’s paid customers for a period of 12 months. Going by the report, there is a possibility that future price cuts and more discounts will be offered by Jio, which will only intensify competition in the industry further.
It is also expected that Jio’s continuity to lure individuals, and the resultant high conversion rate, will most likely force the other players to react just as strongly. We have already seen Airtel, Idea Cellular, Vodafone, and even BSNL launch competing for internet and voice calling plans in retaliation to Jio’s extension of free data offers. In fact, BSNL’s new plan offers 2GB data per day, at just Rs.399 per month.
Overall, the ongoing trends in the Indian telecom sector indicate that the sector will continue to remain highly competitive, despite the sector’s consolidation. What we now have to keep a watch for is how many of Jio’s subscribers will continue to pay monthly recharges going forward. As the competition intensifies, prices are expected to go down further. In such scenario how telecom carriers maintain the quality and strengthen their network for improved and faster internet connectivity, would be interesting to analyse.
