1 min read.Updated: 26 Mar 2019, 03:42 AM ISTLivemint
Before Reliance Jio, only one-sixth of all mobile internet users had broadband. 30 months later, over half of them are broadband users
In January 2019, the telecom industry added 21 million broadband subscribers with Bharti Airtel leading the growth
Before Reliance Jio Infocomm Ltd came on the scene, only one-sixth of all active wireless subscribers had broadband connections on their mobile devices. In January 2019, or less than 30 months since Reliance Jio’s launch, over half of all active telecom subscribers were broadband users, shows data from the Telecom Regulatory Authority of India. Reliance Jio, of course, offered only broadband connections, forcing competitors to follow suit.
Lower tariffs have also resulted in growing adoption of smartphones. In absolute terms, the number of wireless broadband users has risen from 154 million in August 2016 to 521.8 million in January 2019.
In January itself, the industry added 21 million broadband subscribers, the highest in more than a year. Bharti Airtel Ltd led the growth, adding 10 million subscribers. Additions at Reliance Jio slowed from a high of 13 million in September 2018 to 9.3 million in January 2019, points out a report by Motilal Oswal Securities Ltd. Even so, Reliance Jio continues to hold the lion’s share (55.5%) of the wireless broadband market.
According to Ravi Menon, analyst at Elara Securities (India) Pvt. Ltd, two factors are driving the broadband subscriber base. One is the bundled plans. The second is the network effect where growing usage of internet applications (such as apps) pulls in more users.
This works well for the telecom industry, as bundled packages are generally priced higher than plain vanilla voice plans. But encouraging high data usage also entails high capex, which is why all telcos have been burning a lot of cash. Unless tariffs rise from current levels, the situation is unlikely to improve.