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Telecom Industry in India:
India has the world’s second largest mobile phone user, after China with over 115.7 million users as on October 2019. The telecom sector hence, contributes around 14.5/- lakh core to the Indian economy and supports three million direct jobs and two million indirect ones. In India almost 70% of the population lives in the rural areas, however, the penetration of the telecom sector have been 58.45% only. Even though the figures don’t look very impressive, India stands right next to China which has the world’s largest mobile phone user.
Effect of Reliance Jio on Telecom Industry:
The telecom industry of India has always been a potential sector for growth and development for the investors from all around the world. However, what once used to be the most promising sector in the whole of Asia has turned sour in the last few years. The market has turned even worse with the birth of Reliance Jio and with the economy of the country going down south.
In September 2018, a policy was unveiled by the government known as the National Digital Communication Policy, which attracted an investment of around hundred billion dollars, and was expected to provide four million jobs. Unfortunately, with the price of the spectrum being the way it is this policy is yet to take off.
India also holds the world’s largest data usage per smart phone in an average of 9.8 GB per month. However, the major problem the telecom sector is facing today is the steep increase in the bandwidth or the spectrum prices. Over the years the decline of smaller companies has risen very high as only few companies today are capable to make the bid for the spectrum which costs a fortune.
If we look few years back, the telecom industry was somehow coming into terms with its spectrum prices, when Reliance Jio was born, and the market was completely distorted. Reliance Jio have disturbed the harmony of the market by giving free data and voice offerings. Therefore, by doing so other service providers were forced to come down on price point, hence, making it even more difficult for them to invest.
Situation of Other Service Provider Companies:
In order to keep themselves above waters companies like the Vodafone and Idea have merged, so that they can survive somehow on the basis of each other’s subscriptions. However, this strategy is also seen to be failing today, as Vodafone’s Indian venture has a debt of 14 billion dollars, and is said to be
seeking a tariff war and mounting losses.
Sadly, the Supreme Court had earlier ordered Bharti Airtel which had a due of 21 – 24,000 core and Idea- Vodafone to pay their dues, and have refused to extend the date of the payment as per the verdict of 17 th February, 2020. The Supreme Court has also said that action will be taken against these two service providers if their dues are not paid on time.
This entire situation has affected the quality of service. The prices are so high that they are not being able to invest in order to improve the service quality. The gestation period which is the ROI in the telecom sector is roughly between five to seven years however, a lot of operators do not have that kind of holding power, and therefore are swiped out of the market.
Speed is something which the consumer is most concerned about. As it concerns downloading as well browsing music, videos, movies, and various other things. The consumer is keen when roaming is
seamless and the calls don’t drop. However, sadly enough the telecom sector is not getting the kind of relief it requires at the moment, in terms of staggering payment module, and especially after the Supreme court rejecting the plea of Vodafone – Idea, to pay in installments, and also for spectrum allocation.
Why Jio Is Winning?
At this point what the telecom sector is actually looking for is some kind of restriction on Reliance Jio, so that the huge subsidized tariffs don’t take away the market share and the customer base of the others. The mobile service providers play a very important role in today’s world. The expensive handset one uses has no impact on the calls or the speed of the internet as that purely depends on one’s mobile service provider.
There are various reasons for a call drop to happen, it may happen because the networks are congested, or maybe because too many people are trying to connect at the same time. Hence, it is important for the service provider to place more towers. However, call drops can also occur when mobile phone towers are not picking up one’s phone’s signals, due to tree cover, heavy cloud cover or mountainous terrain.
These factors may block the radio waves, hence, creating a problem with mobile networks. However, it is true that mobile phone is a device which has become extremely necessary for our survival, the
internet browsing facility has made the device an integral part of our lives, and the instant connect have made it the greatest innovation of the century. Hence, having good speed and quality service by our service providers at a low cost becomes necessary.
We are living at a time where TV screens and landlines are getting obsolete, and with the demand as
well as accessibility of audio visual products on the smart phone screen, the environment of small
screen or mobile screen is becoming normalised. The mobile phone has become a utility device today, and with the features such as gaming to emergency phone numbers seamless roaming with no extra charge is what the consumers want today.
Written by - Adrija Saha
Edited by - Nidhi Verma
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