India′s 4G revolution will help western SMEs make it big

The term game changer is bandied about rather loosely these days. So, 'India Investment Journal' decided to tread with caution before agreeing with the media chorus that the launch of Reliance Jio's 4G service across India would be a “game changer” for the country's telecom sector. First, let's take a close look at what it will offer that's different from its rivals.

Reliance Jio plans to cover 90 per cent of India by March 2017, up from the 18,000 cities and 200,000 villages where its services are now available. That means, 90 per cent of India's mobile population will be able to buy a Samsung, LG, Micromax or Lyf smart phone that will come as part of a bundled package with a Jio SIM card and avail of free voice calling for life and access the internet at Rs 50 per GB (less than $1), the cheapest data plan in the world.

Morgan Stanley estimates that India's internet penetration, currently at 26 per cent, will rise to more than 50 per cent over the next two years. That will mean 325 million additional internet users. And a vast majority of these will access the net via 4G handsets, which have now been brought within the budgets of even the most humble Indian thanks to Jio's ultra-cheap bundled plans.

Reliance Industries chairman and managing director Mukesh Ambani's ambitious gambit dovetails perfectly with the Narendra Modi government's equally ambitious Digital India programme that envisages using the internet to deliver governance, education, healthcare and other benefits to every Indian regardless of location. The Digital India programme has set as its goal as inclusive growth in areas of electronic services, products, manufacturing and job opportunities. Its highlights are:

• Digital infrastructure as a utility to every citizen

• Governance and services on demand

• Digital empowerment of citizens

The combined muscle of the two programs can truly be a force multiplier and empower not only the common Indian but also small and medium enterprises in India and the rest of the world.

Consider this: a vocational training institute in Birmingham or Wisconsin or Hamburg that has attained regional or national recognition in its home market can now piggy back on Jio's 4G backbone to offer its courses to willing Indians. If (the admittedly exaggerated) fears of the complexities of entering the Indian market are a hindrance to greater engagement and commerce with this country, then Jio's presence will empower them to overcome the perceived hurdles.

Not just this. The domino effect of Jio's aggressive pricing strategy on its rivals and the expected me-too plans will bring India's already low telecom tariffs down further and fuel a rush for 4G handsets and services among subscribers.

Small town and rural India, which accounts for more than 40 per cent of India's GDP, has thus far remained beyond the pale for more small and medium service providers in the West. The 4G revolution ushered in by Reliance Jio and its rivals will prise open this $900-billion market and throw up opportunities beyond anyone's imagination.

Just rewind 14 years. Ambani, then leading Reliance Infocomm (now Reliance Communications, run by his brother Anil), had launched the “Monsoon Hungama” plan, offering the till then expensive mobile telephony experience at Rs 501 ($7.50) per month, inclusive of the handset. That set the stage for India's mobile revolution and took India's mobile subscriber base from less than 50 million to 1 billion. And this, in turn, set the stage for the Amazons and Flipkarts and Alibabas of this world to enter the scene. Reliance Jio's launch promises to throw open India to foreign and Indian SMEs. And that alone could generate business worth several billion dollars.