Disruption due to Reliance Jio 4G

Yes. Any OPCO customer if calls customer of any other Opcos 1st opco need to pay to other opco 14 paise per call.
This only does not apply to App to App pure data Call like Viber, skype, whatsapp or RJio chat. However here both side customers pay for resultant data usage on their leg of call.
Trai has brought consultation paper for removing this interconnect charge regime. But still at consultation stage.

Check out @_anujsinghal’s Tweet: https://twitter.com/_anujsinghal/status/771742479477383168?s=09

A press release from Reliance states that no data charges will be deducted for data calls

On the contrary, Cisco has been one of the biggest vendors to supply networking gear to Reliance! When Rjio provides internet in schools/colleges, or anywhere, they use gear made by OEMs, not their own. So, the vendors ( if Dlink is one, i have no idea if it is) will gain from this spread. Specifically coming to Wifi, Reliance may choose another vendor as there are many.

@arunsg I work in Cisco. Your point is valid but i dont think that the current scenario in which the Wireless Controller handles number of access points and the users traffic pass through a centralized Internet kept at datacenter after that will not be the option the reliance team will be looking at. I think there will be silos or hotspots which will be kept by them at classrooms and other places.

Yes there is a possibility that they may use traditional hardware and Cisco is providing the same also for some of its locations and at the backend as well but I think a new type of product may replace it as well.

Hi @nityanandparab Are you saying that reliance will be using new type of devices which are not manufactured by Cisco?

If I have understood correctly, then which company(s) are manufacturing these devices. For example which company is manufacturing Reliance Mifi device?

Their centralized data center will always be the first option for Rjio, for the reason that that it hosts all their applications, their internal cloud, & allows them to monetize apps/services. These of course are free till end of 2017, but this is what will drive their revenues going forward. Their data center has been a very heavy investment and is a big differentiation vis-a-vis the other operators, who mostly just provide Layer 3 connectivity, but Rjio is taking the users all the way up to app layer 7.

Think about another wave of NPAs for the banking industry. Don’t think AirCel, Telenor etc or even Idea will survive this onslaught in the mid to long term. I read that IndusInd and Yes bank have high exposure to telecom sector. And surely additional job losses in telecom sector.

1 Like

Cisco does not have any mifi device in their portfolio as per my understanding. The product Jio using might be from some chinese/taiwnanese company.

Cisco provides Access Points for larger installations and routers at the backend at NOC/Datacenter.

Yes, this calculation of .5mb/minute on WA call is correct.
in case of RJio, calls on their VOLTE technology will not be charged for data. this is true for volte supporting phone or non-volte phone but using over riding app RJio Join which ultimately uses VOLTE technology. both above does not require even data connection to be active on user’s phone.

Phones using RJio Chat for call will be charged for data on both the legs. receiving as well as calling side. because they are pure data call and hence like WhatsApp call.

Video Calls on Volte will be charged for data in any case.

There is no doubt that VoLTE will definitely be disruption. However to reach to that stage where it impacts it has do well in execution. There are big hurdles in getting things executed smoothly.

Even if you explore currently , all the folks who have got the Jio SIM are struggling to get the service, which is leading to lot of dissatisfaction. This can lead people reluctant to shift over this time will tell as this just the beginning and they are having teething troubles.

Now coming to prices Reliance have things built in to charge customers couple of points

  1. Validity cycle is 28 days which means 365/28= 13. You can end up paying for 13 months in an year. Of course it will depend on the usage as well.
  2. As per terms & condition 7 mentioned on Jio site (http://www.jio.com/en-in/plans), the first recharge cannot be 19, 129 & 299 that means it can be either 149 or 499+ which can have big difference to start with.

Rjio deduct data for calling also. I using jio now . 1st i got 2gb data and 100 minutes for calling. I call for 6 minutes and my call balance deduct 6 min and data also 4mb , m using non volte supported phone, doing call through jio jion app.

Do we have any idea how many subscriber can the present RJio network handle?

Also, how much more capex company has to double the present capacity?

There are various stages of Capex requirement and very difficult to pin point those numbers. IP network as such will have good data pipes capacity and RJio has invested good money on that large pipes. but still, based on traffic pattern, sites usage etc, one need to keep adjusting the network growth and hence the capex. it is a complex telecom traffic science which needs to be worked out with bottom top approach once actual traffic data starts being available at micro level and one knows the projected traffic growth and pattern.

Going forward everything go flat rate… For example: pay 1000rs per month and you get unlimited voice call to landline and mobile sort of plans… I see such offers not in distant future but in near future,.

Mobile phone penetration in one the verge of saturation… After saturation, the telecom operators will have to find one or the other way to attract other company customers, one way here is to give them a cheap option and helping them to return their mobile number… This is the next business model…

posted by @gaurav_agarwal in shemaro thread…good read on content strategy of jio and what all they are making available…more than jio, this looks like desi netflix…

1 Like

Recently read arrival about Jio future, this not recommendation no any holding in stock.

I think all content holders(movie production houses or any other parties who hold rights for music ,movies etc.) should get a massive fillip due this.Ideally this should cause a price war in telecom and will lead to rapid internet penetration.Then all the content holders have to just deliver their content to youtube,hotstar or any other platform to a new and potentially media hungry audience and bang!! a new revenue stream for them or atleast a massively enlarged one.(The same case as disney during advent of vhs,cd,dvd etc.).
Apart from entertainment content any ideas guys about which boats this tide is going to lift

1 Like

View on Telecom sector. What is happening now.?

Product pricing strategy is the first sign that tells when an industry or company is losing steam. - Telecom sector

Initially the company (Airtel, Idea, Vodafone) has no competition and it charges the most a consumer can pay.

Then it lowers the price to broaden the market but still is not afraid of competition.

Later comes the stage when many competitors (Jio) enter the market and everyone lowers the price to increase or hold market share.

All these companies, then start on their way to become problem companies unless they innovate.

Next sign is attempts to increase the market share by acquisitions.

So, in essence expect Consolidation in Telecom and look out for Innovation. Until then, find the next bargain.

Disclosure: Not Invested in Telecom Sector…

Cheers,
Amit

This is a classic case of Racing to the Bottom.
‘Understanding Michael Porter’ A strategy and competition book has very relevant comment for what you have mentioned. It is some thing like…
When industry has structural issue as regards to Competition Strategy, chances of that getting corrected with time are minimal.

Every year, since many years, it is a hope that situation will improve in next few years as a result of some players leaving the ground or M&As or basic business sense returning to all. Only unfortunate thing is this few years have become a rolling few years of target every year!

Talking porter framework here …Couple of points on industry structure .,

  1. Entry barrier is increasing . Even with 150000 crs+ and six years of time Reliance jio is not having a cake walk unlike last time in 2003/04 when it could do without much issue .

  2. Exit barriers are low and decreasing : Look at the way the smaller players are exiting …

  3. Competition Intensity is actually reducing : Inspite of all this noise even after 20 days since Jio launch existing players have not launched free voice offer unlike those days when 1paise/ sec offer was done by Tata docomo in 2008/09 or free incoming in 2003/04 .

  4. Supplier power : Govt has now reduced as most companies have spectrum for next 20 years and their requirement is much lower than in 2011 or so … spectrum auctions are not expecting to that hot

  5. Consumer power . If consumer churn is 3%-5% that indicates inspite of Number portability there is some stickness inspite of below average service … Customer service and distribution cost is low and there is huge network effect

2 Likes