Reliance Jio tossed out traditional pricing model: Mathew Oommen

Asian billionaire Mukesh Ambani-controlled Reliance Jio that has made a disruptive foray in September 2016, has covered 95% of the country’s population with aggressive 4G network rollout together with innovative pricing strategy. Telecom industry leader and Jio’s president Mathew Oommen, in an exclusive interaction with ETTelecom’s Muntazir Abbas has indicated yet another wave of 5G disruption in the making on the back of delivering cost-effective services such as Augmented Reality, Virtual Reality, and HD video content. Edited excerpts.

How do you see the fourth-generation (4G) technology coverage presently, and what are the clear benefits for consumers and the country when it reaches to optimal level?
With operators’ coverage reaching over 90% of the Indian population, India will be clearly connecting the unconnected, and actually making technology accessible to everyone. Covering the nation with accessible, affordable wireless broadband is just the first part of fulfilling that vision and India’s rapid acceleration of internet adoption is unparalleled as the country skyrocketed into the digital era. Pundits had said India is not ready to adopt broadband internet, India has not only adopted but enthusiastically embraced mobile broadband. This is just the start of the telco disruption and accelerated consumer mobile broadband and digital adoption.

What is your coverage percentage currently?

We have covered nearly 95% of the population and will reach 99% of India very soon.

Enterprise sector is a big focus area for telcos. How will high-speed broadband make a real business case for them?
There are 5,000 large enterprises, 1.4 million small and medium businesses, and 51 million registered micro and small enterprises, out of these MSMEs’ hardly 1 million have wireline connectivity. Businesses of every size have been deprived of broadband connectivity. This is a huge obstacle impeding economic growth. The next big transformation for business will be access to affordable ultra-broadband. This will be incredibly transformative for all of society. This is particularly true of the micro business and the millions employed by this sector. In addition to connecting small and micro business, the Industry needs to aggressively build enterprise solutions. Clearly, broadband has an important role to play here, too. Broadband is a necessity to connect with customers, partners, and suppliers – both domestically and internationally.

How do you see 5G ecosystem maturity in India?
5G ecosystem is still evolving and the first true commercial 5G networks and devices to come into service starting 2020. What happens in 2019 in 5G would be more targeted and fixed wireless based and not of any scale. The operator ecosystem – including devices, infrastructure, regulatory, spectrum, and OEMs, are not yet ready for large scale and mass deployment. We will continue to see various targeted use cases explored and narrow deployments in the coming year.

Jio demonstrated various live use cases and the ongoing 5G-driven trials involving facial recognition, smart agriculture, connected public digital centers supporting 3D printers and remote healthcare, intelligent drone security, and connected and remote-controlled vehicles all of these and more are being the potential possibilities with 5G technology.

It is for the first time that two evolutionary mobile technologies would co-exist and interoperate. We will see a generation of devices that simultaneously connect to both 4G and 5G. 5G is complementary to 4G, and not an immediate replacement, which is a huge benefit to operators who have already invested significantly in 4G. In fact, most operators in India are still building out their 4G network and just launching their VoLTE based voice network.

You rightly pointed out that India’s fiber base is something that required immediate attention. How can such deployments be accelerated?
When countries like China, Japan, the US, and other countries, and compare population and fiber, India has less than 1/10th of the fiber. To that means, we are grossly underfiberised in the last mile connectivity. Aggressively deploying fiber is also essential if we are to prepare for 5G. Broadband and 5G leadership cannot be achieved without a robust and redundant fiber infrastructure. India’s fiber cut is multifold much more than typically as compared to the US and we need all operators to build redundant fiber routes across India and deliver fiber to the businesses and homes wherever it is viable. In fact, be it North America or Europe when fiber deployment was not incentivised for the operators, any large fiber-base build was put on hold by almost all major operators. Unless telcos see sustaining and strong service and business models, the deep fiberisation that is a must for India won’t happen in India.

It is no secret that incumbents’ revenue continues to fall. What do you think as an industry leader, about the steps that are needed to be taken by telcos?
Communications is an industry of continual transformation. 2G made way for 3G, and now 4G is being challenged by 5G. For decades, the telephone companies profited heavily as the only option in town. Incumbents were able to adapt as competition came into the market because prices remained inflated due to the cost of building these new networks. The mobile technology defined the operator and its services— 2G or 3G were largely minutes-based services. However, the industry has changed drastically—or rather being disrupted!

Services are no longer defined in minutes. They are not even defined by bits or bytes anymore. It’s all now revenue per subscriber era. With the advent of digital services, the business is based on the value operators offer consumers – the solutions, content, and services. Jio tossed out the traditional pricing model focused on connectivity-driven pricing and made digital services accessible for all and all operators have followed suit—but is this enough?

It is undeniable that the incumbents have suffered during this shift. But it is part of the overall industry transformation and believe normalcy will soon get restored as everyone catches up with technological evolution and increased usage and new services compensate for the corrections. The operator community needs to realise that we are not as big as a danger to one another as a failure to adapt to the market is.

5G promises to deliver ultra-fast data services but affordability is a critical area when it comes to markets like India. Is cost-effective spectrum a way forward? Your views?
If services like Augmented Reality, Virtual Reality, and HD video content are given to people at affordable rates, people will consume and will be willing to pay for the data. As more spectrum becomes available, broadband prices will become even more prevalent and affordable enabling operators to focus more on high-quality service-driven business models. The cost per Megahertz pop in India is also significantly higher than other markets making it challenging for operators to sustain high quality and high-performance broadband. The higher cost of spectrum definitely isn’t helping the industry while spectrum capacity constraints limit the quality of service, availability, and experience.

How do you see device ecosystem readiness in the country with 3300 Mhz – 3600Mhz band spectrum to be auctioned for 5G services?
5G will give higher speed to consumers in places that cannot be served by fiber. But the device ecosystem will continue to mature and possibly have 2020 as the inflection point by when the ecosystem will begin to start having significant growth. The device ecosystem is critical to ensure that operators aren’t sitting on spectrum waiting for affordable devices to show up in the market. Regarding 3.5 Ghz spectrum, those could be leveraged smartly by operators to accommodate both 4G and 5G. Based on reports it’s evident that Qualcomm and Intel will be showcasing LTE and 5G devices on 3.5 Ghz band. India clearly needs more spectrum in all bands just because of the digital adoption and the large number of new customers being added to data services every single day.