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Reliance Jio to overtake Bharti Airtel in data traffic even before 4G launch

reliance-jio-indiaGoing by various news agency reports, Reliance Jio, the telecom arm of Mukesh Ambani-led Reliance Industries, is likely to overtake all other operators in the total amount of wireless data carried even before it starts commercial operations.

According to a report by news agency IANS, the company has reached 7 lakh subscribers, while a report from rival news agency PTI put the number at 70 lakh. (We believe the actual number is 7 lakh. If the PTI report is correct, it would mean that the company increased its subscriber numbers 14 times in just two months – which is unlikely.)

Assuming the subscriber number is 7 lakh, the high data consumption rate — has ensured that Jio is already challenging the big companies like Vodafone and Bharti Airtel in terms of the size of its business — even before selling a single paid connection.

Multiplying 0.7 million (7 lakh) users with 19.2 GB gives a monthly traffic of 13 mln GB on the company’s wireless network.

In comparison, Vodafone and Idea carry only around 27-28 mln GBs per month even though they have 44-47 mln data subscribers — 60-70 times as many as Jio.

In other words, with 20 GB per month, Jio can overtake Vodafone and Idea’s data traffic with 3% of the number of subscribers and with 10 GB per month, it can overtake with 6% of the subscribers.

No 1 before launch?

The Reliance Industries subsidiary also wants to have 2.5 mln subscribers by the time it hits commercial launch, IANS said.

At a rate of 20 GB per person per month, 2.5 mln subscribers will generate 50 GB per month — double the amount of data carried by all the subscribers of operators like Idea and Vodafone.

Even Bharti Airtel, India’s no. 1 operator, carried only around 45 million GB per month last quarter. Given the strong growth of data consumption on Jio’s network, it is likely that the Reliance Industries unit will actually be carrying more data than Bharti Airtel by the time it starts commercial operations.

The main reason for the high data traffic on Jio’s network is its decision to give a total of 75 GB of data free for three months to its trial subscribers. This led users to consume close to 20 GB per month.

However, starting in the second week of May, the company has removed even that limit under a new ‘Preview Offer’ and is now giving unlimited data to its test subscribers.

As a result, these new subscribers are likely to use 100-200 GB per month. Depending on how many such preview invites are sent, the company’s average consumption would be between 50-150 GB per month per person.

Since the company had 0.5 mln users before the preview offer kicked off and wants 2.5 mln trial users in all, it is likely to add 2 mln under the unlimited scheme.

Even if we assume a conservative number of 50 GB per month per unlimited user,  these 2 mln users alone would account 100 mln GB of wireless Internet traffic per month, dwarfing the 45 mln GB generated by Airtel’s total pan-India mobile subscriber base.

However, what remains to be seen is how much data Jio is able to sell once the unlimited offer is withdrawn and users start paying to consume.

Jio has a stated aim of achieving an average of 10 GB of usage per person per month. This is much higher than the current wireless Internet usage of 0.7 GB per person on rival networks like Idea, Vodafone and Bharti Airtel.

To hit the target of 10 GB per person, RJio will have to price data at around Rs 40 per GB, thus generating an average of Rs 400 per person per month in data charges.

In comparison, Idea Cellular, Vodafone and Bharti Airtel generate only Rs 180-200 per month per data subscriber as they charge about 220-230 per GB.
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