Less than 6 months after Reliance Industries Limited (NSE:RELIANCE) changed the face of the Indian telecom industry with the launch of Reliance Jio 4G VoLTE network, Reliance is attempting an encore of their feat. In an uncertain and somewhat volatile time for most of the mobile telecom service provider in India, Reliance Jio is looking to push their advantage and grab the top spot. This has been a big week for Jio, who first announced their aggressive, more-for-less tariff plans for their proposed shift to a paid subscription model. During the joint Samsung-Jio event at the Mobile World Congress (MWC) in Barcelona, Samsung announced their new “I&G (Infill and Growth) Project” in conjunction with Reliance Jio.
Let’s find out what exactly this means, what it entails for the industry at large, and, more importantly, will Reliance Jio live up to the expectations of users’ after this?
Better Connectivity and Faster Speeds
The primary aim of the “Infill and Growth Project” is to deliver wider LTE coverage for the Reliance Jio service. For all its massive success, Jio has been criticised for its poor connectivity, frequent call drops and poor data speeds. The Infill and Growth project will attempt to mitigate and eliminate this problem by increasing coverage area, improving connectivity inside buildings and dense concrete environments, and providing a consistent high-speed experience regardless of the terrain and geography.
The relationship between Samsung and Reliance is not a new one, going back to 2012 when they signed a turn-key agreement under which Samsung provided the LTE core, base stations, solutions and maintenance services required for Reliance Jio’s VoLTE services. This infrastructure enabled the meteoric rise of Jio as a voice and data service behemoth in the Indian landscape.
With Reliance Jio recently crossing the 100 million subscriber mark in a record time of under 6 months, it remains the fastest growing network service in the world. However, the service has been strained by this extraordinary influx of customers. The I&G project will utilise the 850, 1800 and 2300 MHz band spectrums to upgrade Reliance Jio’s current infrastructure in an ambitious attempt to cover 90% of India’s population, especially in rural areas. Samsung will also be providing Jio with its professional solutions such as Cognitive Traffic Monitoring Optimizer and Quality Monitoring and Analysis (VoMA) to enable for a superior service and end user experience.
Analysts at Credit Suisse, a global financial services company, recently declared Reliance Jio as the biggest data carrier in the world, with data usage of 16,000 TB per day primarily due to video consumption. Jio has been a boon to consumers residing in rural and remote regions of India, with Reliance Jio’s impressive coverage enabling them to remain connected regardless of location. The importance of this cannot be overstated and such coverage can be the nucleus for e-Learning initiatives and in the creation of a truly cashless economy. The partnership with Samsung is a monumental stride in enabling the creation of a “Digital India”.
The Future is 5G
Another important directive of the Infill and Growth project is the rolling out of 5G data services in India in the near future. According to Youngky Kim, President and Head of Network Business at Samsung Electronics, Samsung will create new paradigms for LTE – Advanced Pro and 5G in close cooperation with Jio.
This is a significant announcement which can have far reaching consequences for the Indian telecom Industry. The partnership between Samsung and Jio looks to be a potent one and puts other telecom providers on the clock. In order to compete, they will have to expand and introduce 5G services of their own, lest they risk Reliance Jio significantly eroding their customer base.
Can Jio Do it Again?
Reliance’s outlined plan to shift to a paid subscription model has been met with enthusiasm by the industry and consumer base both. Since Mukesh Ambani’s address on the 21 February 2017, Reliance Jio shares rose in value by 1.36% closing at Rs. 1088.25 while competitor shares depreciated. Now, the collaboration between Samsung and Jio strikes a double blow to their competitors. All of this coupled with Reliance’s significant financial muscle puts them in pole position for the future.
The Samsung-Jio collaboration will be facing its primary competition from a potential partnership between Bharat Sanchar Nigam Ltd (BSNL) and Nokia. The two companies are set to sign a Memorandum of Understanding (MoU) on 01 March 2017. Similar to the Infill and Growth project, the MoU will aim to improve 5G connectivity across India, with Nokia helping BSNL in creating a network framework for the future. The main objectives will be the eventual transition to a future-ready 5G network with a big focus on Internet of things (IoT).
The Government of India is pushing for digitisation of India with their Digital India initiative in a big way. There is a significant need for universal availability of data services for objectives of e-Governance, e-Learning and the creation of a truly cashless economy to thrust the nation into the future. This has created a void in the market, one which all the major telecom providers are scrambling to fill. As it stands, Reliance Jio looks poised to do just that.