Finally the 4G launch happened for Reliance Jio with the lowest rates in India and possibly worldwide although the SIM cards were available from last few months in the market.I have opened this thread to discuss what can be the possible disruptions due to the zero voice rental plan and 4G with cheaper rates on the telecom players and overall in the Industry.
Telecom players will need to slash the rates drastically to compete the free voice calls it will heavily affect the revenue and margins of other telecom giants
As Reliance Jio will provide the hotpspots at public places, it will eat up business of System integrator and networking OEMs like Dlink and Cisco and other players which are not listed right now in Indian Stock exchanges
Rel Jio will provide the Internet in Schools and colleges. This will also eat up revenue of Dlink
There will be many startups/companies which will start providing content for E-learning, Video on Demand which were scaling in limited way because of lack of bandwidth in India
Kindly provide ideas and companies who will get benefited and get disrupted because of this.
Disc: I do not have Investment in RIL and other Telecom companies I would like to know the opportunities arising from this disruption.
I was reading a recent article in Economic time here, which says -
Assuming 400 minutes of usage and 80% off-net calls for 100 million subscriber target indicated by RJio, annual inteconnect cost to be borne by RJio works out to be Rs. 5,300/-
I wish to understand is this interconnect charge one way, if an airtel subscriber is connect to RJio will airtel pay?
400 x 0.18 (iuc charge) x 0.8 (percentage call on other network) x 12 x 75 mm (user base). thats how you will get expenses of c, 5,300 on iuc charge a year.
i guess from the listed space, content owners like shemaroo can show great potential…
especially looking at their growth in digital segment even without RJIo launch…
i am not aware of other content owners, pls share names if you are aware… thats almost like an old disney play… these guys already own content, reproduction or marginal cost of another copy is 0; so as more people consume content, it goes straight to pnl…
Also, i expect prospective bidding for content by players to get competitive as well…
Any customer of RJIO when calls up other OPCO’s Customer, RJIO has to pay 14 paise charge per call to the terminating call OPCO. This is the interconnect cost RJIO has to pay irrespective of RJIO charges its customers for that call or not.
Affordable Data will lead innovation and increased adaption of e-commerce , virtual office etc . Commercial realty will be impacted . So Real estate developers too will be impacted …
Thanks for reply. My question is lets say an Airtel customer call a RJio customer. Will Airtel has to pay 14 paise to RJio as interconnect charge or not?
I think data charge for voice call will be deducted. If such is not the case I will buy a recharge of 149/- for 28 days and keep my call on 24 hours day (theoretically).
Reliance launching 4G in India is a stepping stone in the nationwide transformation to satiate the hunger for bandwidth. The underlying principle of 4G is to provide a network that can cater to wireless bandwidth speeds of 50-100 mbps as opposed to 10-20 mbps.
The obvious beneficiary would be:
Education: Online tutoring/coaching
Video content providers: Netflix etc
Vendors and solution providers of IOT: Since IOT can also be enabled using LTE (4G) network. (smart homes, smart cities etc)
All enterprises that have the will and skill to move to virtual: As cost of moving to a virtual infrastructure is cheaper. (eg: phone banking, online healthcares, etc)
Video conferencing equipment manufacturers
Online advertising will get a boost.
The negative impact would be on:
Travel companies(especially airways): Corporates would try and leverage technology to cut travel costs
The next generation offices/startups would be virtual to save on the real estate and other logistical costs (however this is sometime away)
Traditional media and entertainment may get impacted, once there is a good way to monetize and secure products over the internet. Eg: consider a movie to be launched on the internet rather than a multiplex in the future, if the owners were assured of healthy revenue generation without the fear of privacy theft of their content.
Few of these changes will be visible soon whereas others may take time.
Please note that maintaining a 4G network as of today is not cheap. So there are costs that Reliance will have to pump in every year to keep its network running. However with the advent of 5G which brings in SDN and NFV, the costs of maintaining the network would go down drastically thus reducing the costs of accessing internet in the future.
As of today, as consumers, lets enjoy the price wars between the telcos to get cheaper access to internet
