9/6/2016

RelianceJioversustherest:Round4PrintViewLivemint

Print Close
Fri,Aug122016.0141AMIST

RelianceJioversustherest:Round4
TheongoingfightbetweenRelianceJioandincumbenttelcos,includingBhartiAirtelandVodafone,isactuallythefourthroundofa
battlethatstartedintheearly2000s
NewDelhi:TheongoingfightbetweenReliances
telecommunicationsbusinessundertheJiobrandnameand
incumbenttelcos,includingmarketleaderBhartiAirtelandVodafone,
isactuallythefourthroundofabattlethatstartedintheearly2000s.
Thefirstthreeroundswereasmucharesultoffluidpolicyand
changingtechnologiesastheywereofReliancesabilitytosomehow
getthegovernmentofthedaytoenactfavourablepolicies.

Thefirstthreeroundswereasmucharesultoffluidpolicy
andchangingtechnologiesastheywereofReliances
abilitytosomehowgetthegovernmentofthedaytoenact
favourablepolicies.Photo:AbhijitBhatlekar/Mint

Inthefirstround,RelianceInfocomm,thenpartoftheunified
Relianceempire,gotthegovernmenttoallowittolaunchmobile
telephonyserviceswithitslandlinetelephonylicences.Telcoswith
mobilelicenceswereoutraged,butnothingcameofitexcepta
movetoasocalledunifiedlicencewhich,tobefair,istheonlykind
oflicencethatmakessenseintodaysworld.Still,itwaslobbying,not
anunderstandingoftechnology,thatinfluencedthechange.
Thatwasintheearly2000s,andReliancessubsequentlaunchof
inexpensivemobiletelephonyserviceshelpedmaketheIndian
mobiletelephonymarketthefastestgrowingintheworld.Callrates
droppedtoaround2centsaminute.Themarketexploded.

Consumersbenefited.
Comethemid2000s,inthesecondroundofthetelecomwars,RelianceCommunications,thencontrolledbyAnilAmbaniafterasplitinthe
Ambanifamilybusiness,convincedthegovernmenttomakemobiletelephonylicencestechnologyneutral.ReliancethenhadCDMA
licences(itdidhaveafewGSMlicences,butnotenough).CDMAandGSMarerivalmobiletechnologyplatformsthoughinIndiaGSMhas
alwaysbeenthedominantone.Again,themovemadesensebutagain,itwaslobbying,notanunderstandingoftechnologythatinfluenced
it.
Interestingly,neitherReliance,norTataTeleservices(whichpiggybackedRelianceseffortsandlaunchedmobileserviceswithitsfixedline
licences,andthenmovedtotheGSMplatform)benefittedfromthechanges.ThelikesofBhartiAirtel,VodafoneIndia,andIdeaCellular
weresimplybetteratmarketing,networkmanagement,andwhateverelseittooktosucceed.
Round3beganwhenRelianceIndustries(controlledbyMukeshAmbani)acquiredastakeinInfotelBroadbandin2010soonafterthe
MahatafamilypromotedcompanywonpanIndiabroadbandlicences.Atthetime,voicewasntallowedondatanetworks,butin2013the
governmentchangedtherulesallowingcompanieswithabroadbandwirelesslicencetooffervoicetelephonyaswellonpaymentofan
additionallicencefee.Sincethen,analysts,telcos,andconsumershavebeenawaitingthelaunchofReliancesbroadbandservices,
brandedJio.TheexpectationisthatitslaunchwilldisruptthemarketmuchthesameawayRelianceInfocommslaunchin2002did.
Inallthreecases,incumbenttelcos,representedbytheCellularOperatorsAssociationofIndia(COAI),lost.Allthreechangesmadesense
fromthepolicyaswellastechnologyperspective.Butallthreechangesalsobenefitedonecompany.
Round4islessaboutpolicyandtechnologyandmoreaboutcompetition.Thethreebigmobiletelephonycompaniesthatprettymuch
controlCOAI(Bharti,VodafoneandIdea)haveobjectedtoJiostestwhichtheyclaimisactuallyafullfledgedlaunch,onlywithoutpayment
oftherequisiteinterconnectioncharges(toothertelcosonwhosenetworkscallsfromtheJionetworkterminate),submissionoftariffplansto
theregulator,andauditofcustomers.JiohasclaimedthatCOAI(ofwhichitisapart)istryingtosabotageitslaunch.
Fortunatelyforeveryoneconcerned,thisroundislikelytoendsoon.Round5willbeginwiththecommerciallaunchofJio.Themarketwill
thendecidewhowinsandwholoses.

http://www.livemint.com/Opinion/WZ3EAgAQmNm5FaqZY7JCnM/RelianceJioversustherestRound4.html?facet=print

1/1