There is a scene in The Matrix, where a bug causes Neo to experience Deja Vu. With the launch of Reliance Jio, we feel a bit like that, as the rollout evokes a lot of memories of 2002, when Reliance Infocomm was first rolled out.
Since Reliance Jio launched on Thursday, you’d be forgiven for thinking that nothing else of significance has happened in the tech world. Announcing the launch of the Jio network, President Mukesh Ambani said some things that most Indian users have been waiting for a long time. Describing data as oxygen, Ambani explained how connectivity on other networks is sometimes 2G, sometimes 3G, and mentioned the high prices for data today, combined with too many complicated plans and a lack of transparency.
(Also see: Reliance Jio Launching Today: Here’s Everything You Need to Know)
Now back to 2002 and the deployment of Reliance CDMA. The company was on the verge of disrupting the market, empowering the nation, and then it was offering never-before-seen plans: free incoming calls, outgoing calls at 10p per 15 seconds and a Rs. and remember, this was a time when you had a “premium” device for around Rs. 15,000.
The launch of Reliance Jio evokes many of the same reactions. Everyone is now worried about disruptive pricing and talking about how Jio has the opportunity to take over telecommunications in a way that has never been seen before. But if so, then why is Airtel the largest telecom operator in terms of subscribers in India?
(Also see: How and where to get a Reliance Jio SIM card)
The problem is that the real disruption to Jio is in price, not technology or service – it’s a divide but not necessarily defensible, as other telecom providers could be doing exactly what they did 14 years ago. years – reduce prices to match Jio’s offerings, and retain their consumers. It’s not just speculation on our part either – it’s already happening.
For example, Jio’s plans really start at Rs. 499 per month. although there is one at Rs. 149 per month which gets you 300MB of data. The 499 plan gets you 4GB of 4G data, plus unlimited “overnight” access and 8GB of data usage on upcoming Reliance Jio Wi-Fi hotspots. The catch is that hotspots are popping up in colleges, schools, and other public spaces, which means many of us won’t benefit from them. And unlimited nightly use is limited from 2am to 5am, making it a very limited offer. For practicality, we have to consider this as Rs. 499 for 4GB of 4G data.
(Also see: List of VoLTE phones that will work on the Reliance Jio network)
It’s still a pretty good plan, but Airtel has a better plan if you’re able to commit to 4GB monthly usage for a full year – pay Rs. 1,498 upfront to activate the discount plan rates, then you can buy 1GB of data for just Rs. 51 from Airtel. At 4GB per month, Jio works out to Rs. 5,988, and Airtel works out to Rs. 3,895 – around Rs. 325 per month or Rs. 80 per GB. Like Jio, the cost per GB decreases as your usage increases .
Jio has other perks such as access to Jio’s movies and music apps without a subscription, and while the apps need a lot of work in terms of UI improvements, the content library of both doesn’t. nothing to laugh at. But cheaper data is cheaper data – and Airtel already offers it. It’s safe to say that we can begin to thank Jio for the bloodshed that is soon to occur in data pricing. Tariffs on the networks have been stable to the point that cynics might call it cartelization – and just like the CDMA rollout of 2002, the new Jio 4G rollout could also accomplish the same thing.
(Also see: How to switch to Reliance Jio and keep your current number)
But what does this mean for Reliance Jio? Well, the first problem with the old Reliance Communications deployment was that the network just wasn’t reliable. Yes, it was prevalent – you had a Reliance signal in the smaller villages where Airtel and Vodafone were nowhere to be found – but especially in congested towns where demand was high, you had poor quality of service. Thinking back to 2002 and the years after, Reliance phones often lost signal, had poor quality connections, etc.
(Also see: Reliance Jio SIM available for everyone from September 5, free use until December 31)
And that wasn’t the end of things. The worst was if there was a problem. Let’s say you had to dispute your bill – which happened several times during a one-year subscription – then you better show up with a lawyer, a doctor and a pundit start a havan in the Reliance showroom in order to do anything. Customer service was overloaded with too many customers – we were all lured in by the promise of the cheapest connections ever – and with such a heavy load they couldn’t have solved the problems even if they had desired. So it’s probably a good thing that at least 90% of customer service managers in stores seem to prefer to be anywhere else in the world.
Unfortunately for Reliance Jio, it seems like little has changed in the 14 years between that launch and this one.
Let’s talk about the product first. Jio’s preview offering has been around for a while now, to allow the company to test connections and other features. Other telecom operators have called it a commercial launch except in name, but even so, its user count is objectively very low for now. With a relatively small number of users, the speeds vary greatly, each time you test it. We’ve seen it stuck at 2 Mbps, and occasionally we’ve seen it deliver a speedy 30 Mbps connection. From now on, you see more of the latter, but as more users access the network, you can be sure that the balance will shift towards the former. And the number of users will grow, watching the queues forming outside Reliance stores as people line up for their free connections.
(Also see: List of Reliance Jio shots, including those that Mukesh Ambani did not show on stage)
Which brings us to the next issue – customer service. When rolling out the preview offer, stores weren’t sure exactly what was on offer and how to take advantage of it. The Reliane Digital Xpress Mini stores did a better job, but if you went to a Reliance Digital store, you might get incorrect information and no help from the staff. The company is now talking about eKYC, which might improve things, but for now, getting a SIM card is itself a painful process. The comments we see on Jio’s stories confirm this fact. There’s also the fact that social media help is limited – so far all questions have been diverted with a general statement that the preview offer is a trial period and there will be occasional gaps in supply. Now that Reliance Jio is rolling out to all users, will that attitude change or you can’t expect customer support because the service is free? There’s still a lot of confusion about what’s on offer – Reliance’s apps are always changing names and Reliance’s website is always being updated with new details. That it didn’t happen in an orderly fashion doesn’t bode well for the future.
Jio’s pricing is truly disruptive. On all other fronts, there is plenty of room for doubt. When people say Jio will disrupt the industry, we tend to agree. Airtel’s pricing changes show how Jio has already triggered a change. On the other hand, we are not sure that Jio will do better than Reliance Infocomm.
(Also see: Reliance JioFi – How to Get Started with Jio 4G LTE Hotspot)
People suggest that sales of dual SIM and 4G phones will increase. It’s pretty obvious and even if Jio will help, it would have happened anyway. They also say that other operators will lower their prices – this has already started. On the other hand, people are also suggesting that Jio will disrupt the broadband industry and force companies to drop their FUP standards. This is where people start stretching the expectations a bit. On a per GB basis, broadband packages are still significantly cheaper – a 60GB package costs Rs. 1,149 plus tax. On Jio it is Rs. 3,999 – it is not reasonable to compare the two.
With the deployment of Jio, Reliance does not have a simple task ahead of it. The company will bleed money by giving users just about everything for free. It doesn’t pass on interconnection fees and offers VoD, music streaming and live TV, all for free. This is going to lead to a lot of users – then to connectivity issues and bigger problems with customer service. How the company can improve on these two fronts is what will decide its future – the price disruption was just the beginning. It didn’t work too well in 2002 – can 2017 get better?