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How Indian telecoms can counter Jio focusing on network

How Indian telecoms can counter Jio focusing on network

Indian telecom operators such as Bharti Airtel, Idea Cellular and Vodafone have lost 31 percent of service revenue and 46 percent of EBITDA between Q4 2016 and Q4 2017, a Strategy Analytics report said.

They lost considerable revenue and profit due to hyper-aggressive pricing by Reliance Jio that made $25 billion plus investment in the nationwide 4G network.

The entry of the Mukesh Ambani-promoted Reliance Jio also resulted into the exit of several telecom operators and the merger between Idea Cellular and Vodafone.

Strategy Analytics said data traffic in India has increased 14x since Reliance Jio’s launch in September 2016, with 2.7x increase in traffic in Q1 2018 as compared with all traffic in Q2 2016.

Smartphone users view a fast network as the top characteristic of an ideal service provider, with great coverage in third place behind value for money. The AppOptix panel polled 1,000 Indian Android owners in Q2 2018 on brand perceptions, satisfaction and interest in new features.

Jio customers attach higher associations to the ideal provider having the latest technology and being different from other brands.

“Network competition has increased in India, with Jio on course to reach 99 percent 4G population coverage by the end of 2018,” Phil Kendall, director Service Providers, Strategy Analytics, said.

Rivals of Reliance Jio are in the process of consolidating down to Vodafone-Idea, Airtel, BSNL-MTNL. They look for scale to sustain the increases in capital intensity needed to match the coverage and capacity standards Jio is setting. Their Capex has increased from 20 percent of service revenue in 2015 to 30 percent in 2017 and is still increasing.

Device purchasers attach more importance than average to service provider brands that are innovative, unique, with a fresh, new, collaborative approach.

David Kerr, VP at Strategy Analytics, said Vodafone-Idea, Airtel, and BSNL will need to work hard to build advanced, innovative, customer-friendly brands that can still compete on the basics of a high quality network experience.

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