From Internet Era to Jio Era
Last week Reliance Jio announced the launch of a feature phone with internet connectivity at effectively zero price, however, the phone will work only with Jio network. It will be available at Rs 1500 completely refundable security. What’s on offer is free to voice calls & claim for unlimited data at just Rs 153 recharge. This will definitely make Jio feature phone a market sensation. There will be multidimensional effects of this move from reliance. Apart from increased competition in the already stressed telecom sector, rural India will be the major beneficiary of this.
Internet Penetration in Rural India
Internet era started around 2000 in India, Yet Internet penetration in India is only 31% as per a 2016 report from Internet & Mobile Association of India. There are a lot of factors for such a low penetration in India. Affordability is one of the biggest reasons for it. India ranked 106th in per capita income in PPP terms among 164 nations in 2016. In India, more than half of the population lives at minimal basic level. Thus it is meaningless to provide them internet connectivity at significant charges. But other telecom operators were doing this only. Other telecom providers never considered rural India as a target market for internet services. State owned telecom companies had utterly poor service and never tried to improve them. Under such circumstances, Rural India was partly or completely untouched from the benefits of Internet services.
With the launch of first Jio 4G services & now a feature phone at effectively zero charges; Jio will connect rural India with digital India. Feature phone along with internet service will enable even the uneducated individual to gain from benefits of growing India. This will bridge the huge infrastructural gap of urban & rural India. Various schemes of states like digital India, Financial Inclusion, Subsidy Schemes and online education will now be more feasible & in reach. Recent, implementation of GST will also need the internet service as a base to become a successful reform. Therefore future of these schemes in case of rural India will be a distant dream without the affordable internet service. Jio had perfectly filled this gap. With this view it will not be an exaggeration of things if said that we were living in an Internet era; Now we are about to enter Jio Era.
Why for Free? What’s in it for Reliance??
Why should we bother with such issues? There are claims for breach of competition act & business ethics. But is there any market leader who had been completely fair on his route to the top? Still, there are predictions for reliance to become monopoly once the competitors will be out of the market. Such predictions are made on many assumptions about future market conditions and hence are not reliable. And since, market conditions change every day no one can predict them with cent percent correctness. Since its state responsibility to look for monopolistic behavior we need not worry about that. Jio is exactly what the states funded telecom operators should have done long back.
However, there will be some negative consequences of this move. The Internet is a tsunami of information both constructive & destructive, guided & misguided. Free availability of this to a mildly or completely uneducated individual can create problems. But such issues can be controlled with strong Information Act & other guidelines. What’s more important is the availability of affordable internet services to the masses. This will have a multiplier effect on both rural India & Indian Economy as a whole. This is a much needed & welcome step not only for individuals but also for state & its future reforms.
July 25, 2017
February 4, 2016