In this interconnected, modern and globalized universe, as every single inhabitant of planet Earth knows, on May 17, it was World Information Society Day. On this Sunday, fight against Homophobia and the glory of Telecoms were reunited. What an interesting concoction.
But what you may not know, is that it was previously called the “World Telecommunication Day”, to commemorate the founding of the International Telecommunication Union (ITU) in 1865, proudly designated as the oldest global international organization. Isn’t it ironic that the oldest global organization represents the telecommunications industry? Indeed, there isn’t any global telcos company that reaches the size of Google, Apple, or Facebook. There is no such thing as a Telecoms Global Empire. However, two decades ago with the telephone network and fiber optics instantaneous communication, international telecoms companies were on the verge to conquer the global market, and saw the treasure escape from their hand. This decline isn’t comparable to the Roman Empire but, in a similar way it faced external and internal enemies. First, inherently the telecoms industry struggles with crippling debts and the weight of regulation, like the price of 3G license. Secondly, a communication conqueror entered the arena: application programmer interface (API). APIs innovation speed overshadows traditional communication services providers.
Is 5G the savior or just a futuristic fantasy?
So, will the fifth generation technology standard for cellular networks save Telecoms? Even if it’s futuristic image clashes with Telcos reality, 5G seems to be on everybody’s mouth. And this high media coverage is for good reasons: 5G will provide enhanced mobile broadband, enable new innovation based on technologies like the Internet of Things, or Artificial Intelligence to flourish. The major revolution won’t concern customers but the industry. From manufacturing to agriculture, not a single market will be spared. Taking those benefits into account, in 2018 India Department of Telecom (DoT) released the Draft National Digital Communication Policy (DNDCP), with a focal point on its 5G plan .
In order to transform the industry, this digital revolution has to face inherent challenges. Basically, in India 5G network implementation requires
- A more efficient policy framework with less administrative delays
- More telecoms sites connected through fiber in order to have a strong backhaul network
- Complex densification network infrastructure
- Security and privacy protection adjustment
In other words, 5G network rhymes with deployment of extensive infrastructure and capital intensive projects. But Vodafone Idea Ltd, Bharti Airtel Ltd, and Reliance Jio Infocomm Ltd are grappling with debt and liabilities to the government. After rejecting the self-assessed adjusted gross revenue (AGR) determined by telcos, the Supreme Court reevaluated the AGR dues to 13 Billion USD, in just unpaid license fee dues. In addition, if we take into account the usage charges and the compounding interest elements, it is estimated to surpass $18 Billion USD. This decision follows AGR definition change on October 24, 2019. Since then, AGR includes revenues from non-core sources, such as rent or dividend income. However, according to The Economic Times while Vodafone has to pay ₹39,313 Crore ($5.48 Billion USD), and Airtel roughly ₹41,507 Crore ($5.78 Billion USD), Reliance Jio only owes ₹41.35 Crore ($5.7 Million USD). Member of Mukesh Ambani’s powerful family, launched in the second half of 2016, Reliance Jio is a newborn child and benefits from its youth, with an increase of its subscribers market to 32.1% in the quarter ended in December. On the contrary, Vodafone and Airtel accumulate decades of license fee dues.
Reliance Jio Infocomm Ltd reshapes India’s telecoms future and is on the verge of becoming a monopoly
Who is this prodigal son, this intergalactic prince ready to sweep the dust under the rug? Firstly, he doesn’t come from a black hole. Reliance Jio Infocomm Ltd is a telecommunication company, subsidiary of Jio Platform Limited, which is part of Reliance Industries Limited. Secondly he managed to acquire and retain 388 million subscribers by turning India’s telecom industry upside down :
- It changed consumer habits thanks to price war combined with the latest 4G LTE technology. In 2016 it launched the data freebie period, giving away SIM cards with SMS services for free and 4G nearly for free during 3-6 months.
- It provides multiple offerings like movies, games or music initially for free during the freebie period.
- An aggressive promotional campaign and branding, rallying big names in Bollywood, or Pokemon Go, or offering free internet wifi at six crickets stadiums.
- Constant innovation and aggressive strategy, in 2019 providing fiber to the home service
Although the prince faces controversies, and Reliance Industries debt is rising, its strategy resonated outside India’s frontiers. On april 21, five years after Free Basics failure, Reliance Jio welcomed back Facebook to Indian technology sector. Facebook bought a 9.9% stake in Jio, therefore paying $5.7 Billion USD and marking their second-largest investment to date. Together, the two titans plan to design a “super app” for ecommerce, revolving around JioMart and WhatsApp. The impact of this collaboration between a Telecom and Facebook is revolutionary. Does it announces a more api-driven telecom future ? Telecoms revolution’s birthplace, would therefore come from an empire built upon oil refining and petrochemicals ?
Maybe, but from now Reliance Jio is on the right track to victory. The third of may, Silver Lake Partners invested $753 million USD for a 1.15% stake in Jio. On the 8th of may Vista Equity Partners announced it invests $1.5 Billion USD for 2.32% stake in Reliance Jio. Last but not least, on World Information Society Day, General Atlantic invests $870 Million for a 1.34% stake in Jio.
Reliance Jio is bringing back the “World Telecommunication Day” .
About the Author
Margaux Vitre is a final year Bachelor student at SciencesPo Paris and La Sorbonne, interested in data privacy and GDPR influence around the world. Introduced to data privacy from a competition law perspective, at the Cyber Peace Foundation I’m focused on two main areas: Policy Review and Technology Governance