[Stribog]

Originally Posted by one-77

If these “Acts” indeed had tooth or were put to use in any meaningful way, Jio wouldn’t be a thing now.

The regulators were looking the other way then Reliance practically killed all other telecom operators and later internet service providers using their “free” services, which have since then become a monopoly and driven up prices.


So much for a country “multiplying” it’s GDP every few years.

I hear this very often, so let's understand the numbers first and then maybe you can clarify how "Reliance killed Indian telecom".

India in 2014 had 12 Telcos, on a total user base of 950mn. The top 4 had about 50% of the market, the following 8 had the balance 50%.

Airtel and Vodafone had ARPU's(Average Revenue per user) of around Rs 200, but below this the Airport averaged 100-120 and CDMA operators sub Rs 110.

Airtel, Vodafone, Idea, Reliance all reported profits in 2014 (The first 3 healthy Ebitdas, reliance barely broke even)

The rest

#5 - BSNL & # 11 Mtnl losses of some 10,000 crore cumulatively.

#6 - Aircel - 11,000 cr in the red

#7 - Tata Docomo (in May 14 iirc Docomo Japan left, it became TATA teleservices), losses of 5000 crores

#8 - Telenor operational loss of 350 cr, but mind you this was a very small entity in India to begin with. I say operational loss because the GoI issued some refund to Telenor and it reported profits in the books. It's ARPU you ask? Rs 80.

#9 - MTS - loss of 1800 cr, Arpu of around Rs 85

And the other two are too small and made losses just the same.

But what about the customer you ask,

Average data prices were in the Rs 200-300 / GB mark.

Cut to today, average data prices are what, Rs 10/GB? Data consumption was some 3 GB / user, it is now around 140 GB per user. At 2014 prices this is a monthly bill of Rs 15-30k?

Even at a telco level, Airtel and Jio are reporting healthy profits, esp after the recent round of tariff revision+weeding out of low ARPU users (by all telcos). Vodafone and BSNL still remain loss making though.

To address your point, India in 2014 had 12 players, 2 standards including CDMA (a nightmare for a large market), of which the top 4 were making money, the rest all making heavy operational losses. No large telco market in the world is this scattered, with so many players. The theory of creative destruction has to get into effect at some time and it did, to the benefit of the industry and most importantly consumers.

How exactly did Reliance Jio kill the telecom industry? Fun fact, data rates in India are amongst the lowest in the world. I would agree to this line of thinking if our data rates were inordinately high, but the reverse has happened.

Not just data but the concept of paid calls outgoing is also dead. It's amazing that we pay lesser for our monthly telephone (and broadband) bills than 5 years ago and still get exponentially more data and calls. That's the opposite of the market being killed.

[jaaz]

Monopoly per se is very dangerous. Do we have companies who follow ethics? No, they just follow profits. Few may argue for responsible monopoly, which are very few viz., Tata, Infosys etc., I may be wrong about the example.

Take the example of Airports. We were forced to pay Rs. 4,500/- for RT-PCR test for return flight, even though staying for just 6 hours in Mumbai. For the onward flight, the same Test costed us Rs. 500/- in Bangalore Airport. Followed all the Airline guidelines, but even they were helpless about the surprise announcement of compulsory test. Many of the passengers missed their flights including us. This is just a small example of monopolistic repercussions.

A Country is not referred by it's Land, but by it's people.

Without increasing the Per Capita Income, if our economy is growing means, it's creating Oligarchy.

[Everlearner]

Originally Posted by Stribog

Cut to today, average data prices are what, Rs 10/GB? Data consumption was some 3 GB / user, it is now around 140 GB per user. At 2014 prices this is a monthly bill of Rs 15-30k?

Even at a telco level, Airtel and Jio are reporting healthy profits, esp after the recent round of tariff revision+weeding out of low ARPU users (by all telcos). Vodafone and BSNL still remain loss making though.

Not just data but the concept of paid calls outgoing is also dead. It's amazing that we pay lesser for our monthly telephone (and broadband) bills than 5 years ago and still get exponentially more data and calls. That's the opposite of the market being killed.

Thanks for this insightful post. I agree that the telecom revolution we are seeing today would not have been possible without jio. Even people in remote villages are enjoying 4g speeds and consuming multiple GBs of data per month without worrying about prices. I remember paying around 2k per month for phone bill in pre jio era.

I do agree that the approach of jio was questionable, but at the same time, you can't disrupt a huge industry by playing with regular rules. Periodic disruption is very essential for any industry to evolve and benefit customers.

That said, I also agree that Monopoly is very dangerous and I'm happy that atleast we have a duopoly with Airtel and hope the competition stays and wish it actually increases in future with more players.

[Theyota]

Originally Posted by V.Narayan

Put together this chart based on World Bank data on the progression of India's GDP in $ billion showing how long it took us to get to the first half trillion, then the first trillion, then the second trillion and so on. Not shown in the chart but the estimate for FY2022-23 is $3.4 trillion odd. My guess is the 4th trillion will most likely be crossed in FY2025-26 acts of God and man notwithstanding.

They say beauty is in the eye of the beholder. Similarly data can be interpreted as per inclinations of the interpreter. From the table you present, I see the GDP growth rate in the periods 1976-2002 and 2014-2021 are at similar rates of 6.xx %. So I am not sure what you are trying to convey sir? I am not even considering the impact of population growth, inflation, etc, into this. I am no economist. Am I missing something here?

Those who see the glass half empty may say but...low per capita GDP...inequality, ....poverty, .... young migrating.

I am normally not in the above camp, but I would also say those whose glass are full and are surrounded by folks with overflowing glasses have a hard time seeing empty glasses of other folks. That's human nature.

[V.Narayan]

Originally Posted by Theyota

They say beauty is in the eye of the beholder. Similarly data can be interpreted as per inclinations of the interpreter. From the table you present, I see the GDP growth rate in the periods 1976-2002 and 2014-2021 are at similar rates of 6.xx %. So I am not sure what you are trying to convey sir? I am not even considering the impact of population growth, inflation, etc, into this. I am no economist. Am I missing something here?

In this world of divisiveness it is easy to read into the lines what we are seeking rather than simply read the basic data provided. It seems to me, and I could be mistaken, that you are reading political messages into my post which are neither there nor expressed by me! Are you implying innuendoes to me that you are indulging in yourself? I am merely stating how our climb up the ladder moved over time and implying that our time is coming. You are making assumptions of my partisan views without knowing me.

[carboy]

Originally Posted by V.Narayan

You are making assumptions of my partisan views without knowing me.

I agree. I have read many of your views in this thread over time & I have always found them to be not politically inclined.

Originally Posted by V.Narayan

implying that our time is coming.

When is it coming is my question. At the current growth rates, it may take 50 years - i.e. not in my lifetime.

[carboy]

Originally Posted by Stribog

Even at a telco level, Airtel and Jio are reporting healthy profits, esp after the recent round of tariff revision+weeding out of low ARPU users (by all telcos). Vodafone and BSNL still remain loss making though.

Is this operating profits or actual profits?

Jio gave away their product for free for many years. This most certainly shouldn't have been allowed. This is what wrecked Vodafone & almost wrecked Airtel also. How can anyone compete against someone who is giving their product away for free & that too not as a teaser but for a really long time?

Also, there is interesting history about how Jio got into the game. An auction was held for 4G Internet without Voice. Since it was only internet, not many were interested & a proxy company for Jio bid & got it cheaply. Then they paid minor fees to get it converted to Voice + Internet (it never was mentioned in the original auction that this could be done later). So Jio spent much lesser capex as compared to others for the same thing.

[V.Narayan]

Originally Posted by carboy

I agree. I have read many of your views in this thread over time & I have always found them to be not politically inclined.

When is it coming is my question. At the current growth rates, it may take 50 years - i.e. not in my lifetime.

@carboy, your reaction & comment are not surprising. Amongst us Indians it is common. Allow me to offer an alternative view which may not find favour with some.

Dear All,

I’m using Member @carboy’s post only as a reference point. My comments below are for all Indians and not directed at @carboy. When I was a 13 years old and India’s per capita per annum was $123 and visible poverty was all around us, 25% inflation and the soul stifling license raj we lamented about our fate and hopelessness. In year 1994 roughly when the current growth climb started and our per capita GDP was $ 346 we still lamented, with justification at how long? – 1994 was the first year our GDP growth kicked in after the 1991 reforms. Today when we are at ~$2000 of GDP per capita it is still fashionable to toss in a reflex reaction of lament of India sucks. This is not because our achievements are not impressive but because our journey ahead is still long and arduous and as a nation, IMHO, we are experts at seeing the dark lining in the silver cloud.

It is not enough to merely compare ourselves to others but also understand who we are {a pluralistic, multi-lingual, democracy} and where we came from {decimated economically by the British and politically by the partition} and what trajectory we are on. No point comparing ourselves to France or UK – they took 250 years to get to this point. And it is easy to forget how much real poverty existed in these countries, despite their colonial exploitation, till as recently as 1939. No point comparing ourselves to China unless we also want to accept the dictatorship, the vast indentured & captive labour, lack of fundamental rights, property rights and so on. When ever I see folks lamenting how China has progressed economically {which it indeed has} my request to them is to also measure the progress or regression socially, culturally, and politically.

Thanks to the momentum built up over decades and each regime that ruled India since 1947 had its role to play to get us here. Next 15 years with our population growth slowing down drastically and GDP growing at 6% or 7% our per capita should cross $4000 well within the next 15 years. That is doubling the per capita of over one-sixth of humanity - no mean feat by any yardstick. Let’s be aware and alert to the journey ahead while taking pride in what we have achieved. Lamenting doesn’t serve any purpose. Just the two bits of a man in late middle age who has walked through these 50 years.

[carboy]

Originally Posted by V.Narayan

Next 15 years with our population growth slowing down drastically and GDP growing at 6% or 7% our per capita should cross $4000 well within the next 15 years.

I am not at all comparing to France or other developed countries. I am comparing to other countries in our range. Sri Lanka, Indonesia, Suriname, Mongolia current GDP per capita is currently above 4000$. Namibia is near 5000$, Malaysia is 11,000$.

So I am not sure if reaching just 4000$ in 15 years is really something to look forward to. Which is why I said I don't expect anything in my lifetime.

Originally Posted by V.Narayan

When I was a 13 years old and India’s per capita per annum was $123 and visible poverty was all around us

Visible poverty is still all around us. I read that more than 60% of Mumbai lives in slums. We just don't notice the poverty around us because we are immune to it.

[V.Narayan]

Originally Posted by carboy

I am not at all comparing to France or other developed countries. I am comparing to other countries in our range. Sri Lanka, Indonesia, Suriname, Mongolia current GDP per capita is currently above 4000$. Namibia is near 5000$, Malaysia is 11,000$.

Last word on this discussion which isn't going anywhere. That is exactly the point I'm making. We need to understand what was our starting point. what handicap we suffered at the beginning. No point comparing the most populous and frighteningly diverse & complex country like India with a Suriname {6 lakhs}, Mongolia {34 lakhs} or Namibia {25 lakhs} and then say there is no hope. Their populations given in brackets. Only Indonesia is a fair comparison. Sri Lanka? Really!

Visible poverty is still all around us. I read that more than 60% of Mumbai lives in slums. We just don't notice the poverty around us because we are immune to it.

My work is in rural healthcare. We run among other things over 100 badly needed medical camps each year in rural areas of States/regions such as Jharkhand, Chhattisgarh, Uttrakhand, Haryana, Vidharba and a few others. I have a fairly decent first hand idea of poverty in our hinterland and have a comparison with what we saw 50 years back. I stand by my contention that things have been steadily improving in India over the decades. With less ground level corruption the index could have moved better but it has moved a lot. Peace. Let's live and let live with our different perspecives.

[Jeroen]

Originally Posted by V.Narayan

That is exactly the point I'm making. We need to understand what was our starting point..

Absolutely! The endless comparisons is not getting you anywhere. It might give you some idea which direction as a nation you would like to take, but getting there is always based on where you came from and where you are now.

Obviously, my perspective on India is very different from most of our (Indian) members. My first visit to India was in 2009. We lived in India for over four years from 2012-2016. And I spend a few months in India during subsequent years, till Corona hit us.

So my view is more from an outsider who spend some time in India. The India I found in 2009 was quite different from the India I saw last in 2020. A lot of things had changed. During our four years living and working in India we saw a lot of things change. Whether all those changes are/were good is up for debate, but in general we saw similar changes as other democracies have gone through.

It is sometimes difficult seeing the changes if you are part of the society where it takes place. We also tend to focus on the changes we don’t like and take other more positive and subtle small changes over a longer period of time more or less for granted.

Some changes have happened much faster in India than in other (western) countries. I always refer to my own industry, telecommunication. India went from virtually little (fixed) telephony to just about everybody having a mobile phone and access to the Internet in less than a decade! That is unheard of.

It is good to have some historical perspective especially also about the countries you are comparing yourself with.

I think India has made tremendous progress. Should there be more? Yes, obviously. Be cautious about comparing yourself to others. Many have had a considerable head start in many different ways. At the end I find it is almost always better to find your own way, then just look with envy to others and try and copy them.

Jeroen

[carboy]

Originally Posted by V.Narayan

No point comparing the most populous and frighteningly diverse & complex country like India with a Suriname {6 lakhs}, Mongolia {34 lakhs} or Namibia {25 lakhs} and then say there is no hope. Their populations given in brackets. Only Indonesia is a fair comparison.

I don't consider population a Handicap. Our large population is actually an advantage.

Originally Posted by V.Narayan

Sri Lanka? Really!

Sri Lanka's set back is temporary. They will recover & when they do they will be ahead of us because they were ahead of us pre-COVID.

Originally Posted by V.Narayan

I have a fairly decent first hand idea of poverty in our hinterland and have a comparison with what we saw 50 years back. I stand by my contention that things have been steadily improving in India over the decades.

I never said we are the same as 50 years. I never said we haven't improved. My point is that our time is not going to come in my lifetime.

Originally Posted by Jeroen

India went from virtually little (fixed) telephony to just about everybody having a mobile phone and access to the Internet in less than a decade!

Actually, India has low internet penetration. Only around 40 odd percentage of us have access to the internet.

[fhdowntheline]

Originally Posted by carboy

Visible poverty is still all around us. I read that more than 60% of Mumbai lives in slums. We just don't notice the poverty around us because we are immune to it.

Please qualify what poverty means. There is filth, squalor in the slums. But there isnt much of malnutrition, hunger and infectious diseases. Most people there do try to earn a living with semi/skilled jobs and there is a large SME industry that often goes unnoticed because it is largely informally organized. So yes, Mumbai has slums, but it is not exactly equivalent to some godforsaken central African strife/drought/disease stricken country. In fact, that kind of poverty is steadily vanishing from our landscape.

[digitalnirvana]

Originally Posted by one-77

If these “Acts” indeed had tooth or were put to use in any meaningful way, Jio wouldn’t be a thing now.

The regulators were looking the other way then Reliance practically killed all other telecom operators and later internet service providers using their “free” services, which have since then become a monopoly and driven up prices.


So much for a country “multiplying” it’s GDP every few years.

Is your concern against the Telco itself, or is it a politically loaded question?

If it's the latter, please remember that BWA license was granted before the current dispensation was in place. I won't say more because this is a non political forum.

Let me address the first point purely as a telecom software industry professional, keeping aside political qualms.

As someone who was briefly albeit moderately closely involved with the telco in question - their mandate was to disrupt the ecosystem.

Everyone in the industry knew exactly what was coming.

All incumbents had 4 years to prepare and they did zip, nada to match the scale and pace, and more importantly the unmatched delivery execution excellence that Jio showed.

There's a widely known fact in the industry - no one does turnkey better than Reliance. The Jamnagar refinery is testament to their execution skills. Jio was and continues to be a massive effort and to ignore it and question their legitimacy by insinuating that TRAI was in bed with them, is frankly insulting to the industry.

Their products were and are world class and comparable to the best in the developed countries, at a fraction of the price of what the incumbents offered. An all LTE network, incredible network and IT partners, vision of scale, with a bouquet of OTT apps, true quad play, and a startup mindset. They brought India on the digital map and how!

Incumbents got disrupted, despite trying their level best to wrangle the disruptor in lobbying and policy related topics. Only Airtel worked to stay relevant, and thus now its a duopoly.

The Indian telecom market was ripe for disruption. Jio did it. If not they, someone else would have, but possibly not at this scale. Of course it helped that they have incredibly deep pockets, but that doesn't take anything away from their achievement. And the Indian telecom ecosystem and it's consumers are now better for it.

[one-77]

Originally Posted by digitalnirvana

Is your concern against the Telco itself, or is it a politically loaded question?

If it's the latter, please remember that BWA license was granted before the current dispensation was in place. I won't say more because this is a non political forum.

Nope, I am apolitical and believe that core policies do not change irrespective of who is in power. In fact, I believe big businesses and babus, who are perennial, have a far greater role in deciding economic policy, than our politicians.