In the year 2003, Reliance India Mobile’s ‘Monsoon Hungama’ had rattled the telecom industry like no other thing ever did. It shattered the barriers of high cost outgoing calls, made incoming calls free and introduced a low-entry point of mobile telephony for every Indian, notwithstanding their economic standing.
16 years later, Mukesh Ambani is back with Reliance Jio, and almost the same disruption which has the power to change Indian telecom industry forever.
Yesterday’s AGM, which was broadcasted on every TV news channel, live, has actually rewritten the rules of telecom in India, and forced Airtel, Idea, Vodafone and other telcos to change their whole perspective.
Voice calls are free for ever, for every Jio customer, and 4G high speed data is being offered for as low as Rs 50 per GB, which is way less than the cheapest plan available today anywhere in the world.
Mukesh Ambani said, “We Indians have come to appreciate and applaud Gandhigiri. Now we can all do datagiri, which is an opportunity for every Indian to do unlimited good things with unlimited data,”
Competitors of Reliance Jio are trembling with fear, and as per market rumors, Bharti Airtel and Idea collectively lost Rs 12,250 crore during the 45 minute speech of Mukesh Ambani. As per the stock exchange data, such were the tremors of the speech, that Bharti Airtel lost 6.4% of the market share; while Idea had to lose 10.7%.
In fact, such are the claims and promises made by Mukesh Ambani, that even RIL’s share price was reduced by 2.7%, because people simply couldn’t believe what they heard.
On a broader level, free incoming calls means huge operative losses for Reliance, as the company. Even if we assume 500 minutes of free calls every month for 100 million Jio customers, it means Rs 8400 crore of annual expense, in order to keep the promise.
Reliance Industries, led by Mukesh Ambani must have calculated the odds and the chances before making these announcements, and there can be infinite discussions and debate on the issue.
What we are interested is in knowing, how can such dirt cheap data and free calls assist the Indian startups, especially those who are into the digital industry.
Here are the tariffs of Reliance Jio, incase you have not seen them earlier:
We present 3 after-effects of this tsunami called Jio, for Indian startups:
a) Data Is The New Oil; Information Is Absolute Power
Ancient Indian civilization prospered where there was river; then the modern age prospered where there were roads.
The current age can be aptly termed as the Information Age, and the current civilization will prosper where there is data.
As rightly pointed out by Mukesh Ambani during his speech, information will lead India out of poverty, and out of misery. And this makes data the new oil, the new magical entity which can make or break fortunes.
Startups in the Internet niche can now look forward to a brand new perspective of entrepreneurship, driven by data and information, rather than location and traditional ideas.
What can you sell to a data-hungry population, who is not afraid to use his debit card and not scared to experiment?
b) More Internet Users Means More Customers For Internet Startups
Jio’s marketing approach is pretty simple: Entice the end-user with free calls, and then tempt him with cheap data. Once this habit is formed, it won’t be difficult to convince the user to use more and more data.
Competition will drive Idea, Airtel and others to further drop their data rates, and the cycle will follow.
This simple means that in the next few years, there is going to be an explosion of new data users, all over the country. Rural expansion will be the key point, as more and more people adapt to 4G, and use more and more data.
More Internet users is the best news for any Internet startup, as now, their user-base will swell and expand all over.
In short, Jio has triggered more volume and mass in terms of data usage, and digital entrepreneurs should rejoice.
c) Massive Investment in Visual & Delivery of Content Anticipated
Why is Mukesh Ambani forcing data usage habit amongst Indians with dirt cheap data rates? Digital India vision is no-doubt, one of the crucial factors, but so is the strategy to monetize content, delivered via 4G.
As observed globally, when data becomes as precious commodity as oil, then the best way to monetize it using content as the catalyst. When 4G data is as cheap as Rs 50 per GB, then there would be more consumption of content, which includes games, videos, songs and on-demand content.
Jio has already announced that they will create huge, online libraries of 10 million songs, 6000 movies, 60,000 video songs, 1 lakh episodes of TV shows in 10 languages, besides operating 300 live TV shows.
We derive that in the coming days, there can be massive investment in the entertainment sector, wherein startups would be funded to launch digital content enterprises, to satisfy the hunger of millions of data users.
Newer technology to deliver streaming data via mobile, laptop and desktops would be created, triggering more investment in this sector.
Do let us know what you think about the disruption which Reliance Jio has unleashed on the Indian telecom sector, and digital entrepreneurs, by commenting right here.