Reliance Jio’s entry a boost for Ericsson, Truecaller and Lava Mobiles
The roll-out of Reliance Jio’s 4G services has a cascading effect on equipment providers and handset makers, among others
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New Delhi: Reliance Jio had a jump-start with cheap data and free calls, and there are others who have shared in the spoils.
The launch of high-speed telecom services by Reliance Jio Infocomm Ltd in September prompted Swedish telecom equipment and network services provider Ericsson AB to fast-track the roll-out of its 4G network.
“Jio’s launch definitely accelerated the development of high bit-rate mobile broadband. Without Jio, we wouldn’t have seen such a quick roll-out of 4G. It would have happened a little bit more slowly,” said Paolo Colella, head for the India region at Ericsson.
“We have already seen the 4G wave happening in many of the Western countries. In the Far East, China, Korea (and) Japan have already invested heavily in building up infrastructure. Jio has contributed to the acceleration and aligning of India to the rest of the big economies,” Colella added.
The limited spread of wireline fixed infrastructure in India has led to limited usage of broadband. As the country moves to 4G, there is expected to be massive demand for smartphones.
“We are anticipating by 2020 we will have at least 800 million smartphones in the market, so the Internet, for Indian people, is mobile. That is a major difference,” Colella said.
“(The other difference is) the industry was not predicting to have Android phones at $40 per unit at the end of 2016, probably expecting it to happen in at least 12 months, if not 18 months further,” he added.
True Software Scandinavia AB, which makes the Truecaller mobile app to identify incoming calls through a crowd-sourced database, is another Swedish company that has gained from the Jio launch.
The number of Truecaller users on the Jio network is already three times that of any other carrier, its co-founder Alan Mamedi said.
“We see that Reliance Jio right now is three times bigger than other carriers for us, as new users are joining every day. It is not that users from other carriers are dropping—they actually continue to grow. So, the trend we are seeing is that more people get connected for the first time because it is affordable, which is very interesting,” Mamedi said.
Mamedi added that Reliance Jio will remain a game-changer even after the expiry of free services offer since the tariffs are “10 times cheaper than the competitor”.
Truecaller, which entered India in 2009, struggled in the initial years as the data market had not developed, and found its feet only after the widespread adoption of 3G and 4G services.
Mamedi said as more people use 4G services, it will give tools to smart people to create something “magical”, driving more start-ups.
Home-grown mobile handset manufacturer Lava Mobiles is another company that has gained from the Jio launch. The company hopes widespread 4G adoption will help double its market share to 20% by 2020.
“In the operator sector, they are doing disruption, but this disruption will increase the operator business also, pushing it to double. Each company is going to gain,” Lava Mobiles chairman and managing director Hari Om Rai said.
Lava Mobiles is currently investing at least Rs2,600 crore for capacity expansion to produce 18 million devices every month by 2021.
“4G phones have witnessed a very a high demand in last six weeks. For our industry, it is very valuable. There will be disruption and explosion in the industry. Under-Rs5,000 phones (smartphones) are going to grow like anything and feature phone to smartphone transition is going to happen faster, with even 4G feature phones coming in,” Rai said.