We’ll be ready for 5G by 2020 – Reliance Jio

Reliance Jio owner Mukesh Ambani has stated India will be fully-4G by 2020, and is setting his eyes on the 5G euphoria already.

The statement of intent adds to a remarkable couple of years for Reliance Jio and the Indian digital economy on the whole. Starting from nothing in December 2015, Reliance Jio has risen to become arguably the most influential telco in India, dragging the country’s digital economy into the 21st century. A little over two years ago, India was in the digital baron lands, though now the Indian digital appetites are as insatiable as those in ‘developed’ nations.

“India has moved from 155th rank in mobile broadband penetration to being the number 1 nation in mobile data consumption in the world… in less than two years,” said Ambani at the India Mobile Congress, courtesy of Live Mint. “This is the fastest transition anywhere in the world from 2G/3G to 4G. By 2020, I believe that India will be a fully-4G country and ready for 5G ahead of others.”

Paying complements to the pro-active approach to stimulating the digital economy from the Indian government, Ambani is continuing the ambitious expansion of the Reliance Jio business. 5G is what will attract the headlines, most notably after a few telcos highlighted 5G is not a top priority for some nations at Broadband World Forum last week, but the broadband ambitions are just as important.

Tackling the 5G euphoria and increasing broadband penetration across the country perhaps work happily alongside each other when you consider the importance of a fibre network in both cases. The JioGigaFiber proposition, announced during the company’s AGM in July, promises FTTH connectivity in a market where broadband penetration is roughly 10%. ‘Fibering up’ the country is critical for 5G, and Reliance Jio has already started the mission.

“India will be among the largest digital markets in the world,” said Ambani. “Every enterprise must have an ‘India First’ vision to participate in this market. We will need to reinvent to grow and nurture this market to its full potential. This will be a win-win for the entire industry, for India and for the entire world.”

One interesting question which remains is whether the lessons taken from the Jio-effect can be implemented into other nations which are struggling in the lowly places of the digital league tables.

Jio leapfrogs Idea and Vodafone for second place in India

The Telecom Regulatory Authority of India (TRAI) has unveiled the monthly growth statistics for July and India is still the market which keeps giving.

Looking at the wireless segments to start with, Jio is once again dominating. Overall, the market grew by 10.5 million subscriptions taking the total to 1.15 billion. This number is already pretty staggering, though when you consider the total population of the country is over 1.3 billion there is still room for growth. In most developed markets the mobile penetration (the total number SIM cards) exceeds 100% of the population, while there are numerous cases of this percentage going north of 110%. Looking at these statistics in the simplest of terms, there is still potential for another couple of hundred million subscriptions in the country.

Of course, Jio is capitalizing most from the insatiable appetite of the Indian digital society. When looking at the total number of subscriptions secured by the telcos, Reliance Jio captured roughly 91% of the new customers, boosting its subscription base by 11.7 million. Amazingly, the 609,000 subs captured by Vodafone or the 313,000 attributed to Bharti Airtel are nothing more than footnotes; how many markets are there were you could say that!

The end result is continued momentum for Jio. As you can see below, Jio has leapfrogged both Vodafone and Idea in the market share rankings. That said, with the much-anticipated merger on the horizon it won’t be long before the combined entity hits top spot.

Telco Net Adds Market Share
Reliance Jio 11,796,630 19.62%
Vodafone 609,974 19.3%
Bharti Airtel 313,283 29.81%
BSNL 225,962 9.8%
Idea 5,489 19.07%
MTNL -9,914 0.3%
Reliance Communications -31,814 0.004%
Tata -2,357,690 2.1%

Perhaps the most amazing aspect of these statistics is in the broadband market however. The staggering growth of the mobile segment will continue for at least the short- to mid-term future, though with a total of 22.2 million broadband subscribers there is an incredible opportunity for the right offering.

Just to put these numbers in perspective, the broadband would have to grow 50-fold to even come close to the same scale as mobile. Admittedly, it significantly more expensive to invest in infrastructure for a future-proofed broadband network in comparison to mobile, but this is an area which seems primed for the right disruption.

Of course, with disruption comes uncomfortable truths. Jio might be on an upward trend, collecting subscriptions and hiring generously, though the consequence of this disruption has been market consolidation. In the most general terms possible, consolidation is never a positive for the job market, while the Financial Express is reporting job losses of 50,000-75,000 in the Indian telco market across 2018.

28m net adds – Jio numbers really are quite remarkable

Reliance Jio has reported its numbers for the last three months, and it does make for some very interesting reading.

28.7 million net adds for subscribers across the quarter, taking the total up to 215 million, and a churn rate of 0.3%. Few telcos can claim to get anywhere near these numbers, though it seems Jio is doing it while making money as well, with the team claiming net profits of roughly $89 million. The traditional players in the Indian telco market must be pulling their hair out over the cheap offers Jio is able to offer while continuing to be profitable.

“Jio continues on its path to drive digital revolution in India,” said Mukesh Ambani, MD of Reliance Industries. “We doubled our customer base and most user metrics in the last 12 months.

“215 million customers within 22 months of start is a record that no technology company has been able to achieve anywhere in the world. Jio has built an ecosystem for digital services and its affordable and simplified pricing strategy offers every Indian a chance to experience the ‘power of data’. FTTH and Enterprise services with strong fibre backbone across the country would further establish Jio’s leadership as a digital services provider.”

The Jio mission seems to be about creating scale, leaning on efficiencies and then creating new opportunities to monetize the user though diversified offerings. But, it does all start with encouraging the consumer to be a more active participant in the digital ecosystem.

The network has continued to expand, Jio now claims to cover 99% of the Indian population, and to have the only network to deploy pan-India 4G across the 800 MHz, 1800 MHz and 2300 MHz bands. These are not the only boasts, as the team also believes it has the world’s largest mobile data consumption and VOLTE networks. What this does offer is opportunity for the consumer to deep dive into digital.

Jio consumers use on average 10.6 GB of data per month, while spending 744 minutes talking on devices and 15.4 hours consuming media. The more Jio can convince its users to spend online, the more money it makes. This might seem like a simple idea, but the previously digitally starved Indian consumer is certainly gaining an appetite.

Of course, mobile is just the beginning. When we saw Mathew Oommen’s, President of Reliance Jio Infocomm, presentation during the Big Communications Event in Austin this year, he was bullish about diversification and convergence. Broadband was a big area of focus, with Oommen claiming there are only 18 million broadband connected homes in the country, while the enterprise market is currently at a fifth of what it could be. These targeted segments are becoming apparent.

JioGigaFiber, which will offer both consumer and enterprise broadband and entertainment services, was announced earlier this month. Customers across 1,100 cities can no register for services starting 15th August 2018, with the launches being dependent on demand. Broadband will be a more capital intensive campaign for Jio, though we suspect there might be a few initiatives in the pipeline to encourage subscriptions.

Elsewhere in the business, JioTV is growing, as it JioCinema, while the combination of JioMusic and Saavn is starting to look like a winner as well. MyJio, the self-care app, now has more than 200 million downloads, and the mobile payment business is starting to gather steam.

Mobile might be where Jio caused the chaos on the first place, but the team is clearly not satisfied with just being a telco. Jio is on the verge of becoming one of the most influential businesses in India, touching the consumer in every aspect of life.

We disrupted mobile, now onto broadband – Reliance Jio President

Reliance Jio has sent shockwaves through the Indian telco space, but it isn’t finished just yet; next stop, broadband and enterprise services.

Many companies will claim to be disruptive, but few can point to concrete evidence of organised chaos like Jio can. Speaking at this year’s Big Communications Event in Austin, Mathew Oommen, President of Reliance Jio Infocomm, reeled off some very impressive numbers and the ambition is yet to be dampened.

“The last 2-3 years India has gone through disruption in almost every sector,” said Oommen. “The impact these transformations have had on more than a billion people is almost unimaginable”

As it stands, the company has more than 186 million subscribers, while its network supported 372 billion minutes of VOLTE calls over the first quarter and 2.4 billion hours of video each month. Not bad for a market which was not considered capable of supporting 4G. Jio is still causing chaos in the mobile space, Oommen stated the objective is to get to 500 million subscribers, but ambitions are being widened to broadband and enterprise as well now.

Oommen claims there are only 18 million broadband connected homes in the country right now, while the enterprise market is currently at a fifth of what it could be. This is the next target for a business which does not seem to accept boundaries and limitations which are placed on the telco market.

“We disrupted the mobile industry and now we are looking further,” said Oommen.

Of course this should not be taken as an indication the team is going to ease up on mobile. The team built a video-centric network over the last couple of years which is going to fuel the next stage of growth in the mobile space. Edge computing is right at the forefront of technological developments here as the team drives towards continued evolution and establishment in the media space.

At the centre of this evolution is the MyJio app. This app not only serves as the focal point of customer interaction, but acts as a content aggregator platform for Jio. This is another area where Jio is defying industry trends, as while other telcos are struggling to make an impact in the media world, MyJio and its features is screaming ahead. The app already has 150 million downloads, while the JioTV service has 100 million subscribers and JioChat has 50 million. Other services include JioBank, JioHealthHub and JioMusic, making it a pretty well populated platform.

The attitude put forward by Oommen is a simple one; disrupt or be disrupted. Jio demonstrated this by offering free voice calls with its tariffs, decimating the business models of its competitors in the process, and the continued evolution into the content and media services space is another demonstration of the destructive nature of the Jio business.

“India and Jio are just getting started,” Oommen proclaimed as a closing statement. We believe him.

Jio does it again as new deal sends shares tumbling

Reliance Jio has unveiled a new postpaid tariff to further undercut rivals plans and reinvigorate the enthusiasm which saw millions of customers flock to the telco.

The new deal is priced at Rs 199 per month offering 25 GB data, while all phone calls and texts are also included. It is pretty much as low as you can get but still make money (questionable as to how much though), with the added bonus of tumbling share prices for all its competitors.

Over the last 24 hours, shares in Bharti Airtel dropped almost 6%, Idea Cellular was down 14% and Reliance Communication was down 5%. Vodafone’s share price is unlikely to be drastically influenced by one market, but the management team will be wondering when the misery is going to end.

The last few months have been a bit quieter in India, which must have come as a welcome rest for the traditional players. Jio’s entry caused chaos in a stagnant market, with the spreadsheets starting to pick up some weighty bumps and bruises. A period of calm might have helped out the likes of Bharti Airtel or Idea, however the launch of this new tariff is the starting bell for another round.

It would hardly be a surprise to see customers tearing up contracts and flocking to the open arms of Reliance Jio. It might not be the free services which were being offered last year, however this tariff can cause some damage. There is one reason share prices are plummeting all over the place, the market knows that the competitors are going to have to match the Jio offer. That means more pressure on profit columns which are already being squeezed pretty tight.

Some might have though the chaos was over and the market could return to calm, but Jio is making sure the party train keeps rolling.

Jio looks strongest in India survival game

Reliance Jio has continued its march to the top of the Indian telco rankings, reporting another quarter of monstrous growth adding another 26.5 million new customers.

Total new customers across the quarter stood at 27.9 million, with a churn rate at 0.25%, with the average data consumption per user per month of 9.7 GB and average voice consumption of 716

minutes. ARPU remained under pressure, dropping 11%, but this is hardly unusual for the country. Spreadsheets are being attacked from every angle, and it seems to be a case of who can last the longest.

“A full-blown social, mobile and digital revolution is underway across the world, and I am glad that India is not being left behind in any way with the advent of Jio,” said Mukesh Ambani, MD of Reliance Industries. “Everyone at Jio is today proud to have played a pivotal role in transforming the digital landscape of this country and empowering millions of Indians with all the leading digital tools and skills. Jio is offering the ‘power of data’ to each Indian to fulfil every dream and to collectively take India to Global Digital Leadership.”

Looking at the financials, revenues stood at $3.6 billion for the quarter with net profits slightly up year-on-year to $76.6 million. Growth might not be exceptional, but in comparison to competitors Jio is having a great time. Bharti Airtel posted its lowest quarterly profit in 15 years, while Idea was another which suffered through the last twelve months.

The India telco space is chaos right now. Consolidation is everywhere, while profits are shrinking at an alarming rate. Winning the telco battle in India seems to be a case of surviving longer than competitors. Last man standing collects all the glories.

RCom gives green light to offload wireless unit

Reliance Communications has been given the go-ahead to sell off its wireless business unit after National Company Appellate Law Tribunal removed an order blocking the sale.

The NCLAT had blocked the sale of the wireless assets due to various legal challenges, including one from Ericsson. The Swedes claimed RCom had not paid it for equipment and services for two years, and instead tried to pull a fast one by issuing a few post-dated cheques. After this obstruction has been lifted, RCom is now free to offload the unit to Reliance Jio.

“As directed by the Hon’ble Supreme Court, RCom moved the Hon’ble NCLAT today for vacation of the stay in relation to sale of its tower and fiber assets” a RCom statement reads. “The Hon’ble SC had itself vacated the stay in relation to spectrum, MCNs and real estate yesterday.

“By an interim order passed today, the NCLAT has vacated the remaining stay, and allowed execution of sale deeds and deposit of the proceeds with SBI in an escrow account. Based on these orders, RCom can now proceed with completion of its entire asset monetisation plan, covering spectrum, towers, fiber, MCNs and real estate.”

The delay in the sale would not have been welcomed by Anil and Mukesh Ambani, two brothers who respectively own Reliance Communications and Reliance Jio, and who reportedly not get along. Offloading the wireless business unit is one step in Anil exiting the disruptive and chaotic telco space.

Bigger, prettier and now profitable – Jio is poised to dominate India

It’s bad news for those who thought the Jio bubble might pop and everything would return to normal in India; Jio’s latest quarterlies show it is a money making machine.

It came, it saw, it conquered. And all before the market incumbents could do anything about it. Perhaps the apparent inability of Jio’s rivals in doing anything to slow the growing tsunami was because of the belief this day would never come. Jio was fast burning through cash in acquiring customers and this could only last for so long, soon CEO Mukesh Ambani would empty his piggy bank, Jio would be bought by someone for tuppence and things would return to normal.

Other people might have believed there was a more nefarious plan underway from Ambani. Run telco pricing into the ground so rivals cannot make any money, creating an Indian monopoly for Jio. That’s when Jio would ramp up the prices and stop being a loss leader. Well, maybe not a monopoly, but with Idea and Vodafone merging, and Telenor, Tata and RCom exiting, the Indian telco space is certainly a lot less crowded.

Right now we are essentially down to four players after months of acquisitions and mergers. Jio is sniffing around RCom’s consumer business, Bharti Airtel has bought Tata Teleservices and Telenor India, Vodafone and Idea are merging to one entity. Aircel is still about, but it shouldn’t be too long before that is bought by someone. It has started to miss loan payments which is never a good sign. The other player is state-owned telco BSNL, and it wouldn’t be a complete stretch of the imagination if it was privatised. That could leave Jio, Bharti Airtel and Vodafone/Idea alone at the top, plus another couple of very minor players.

But neither has turned out to be winner. The latest quarterly results from Jio prove that you can be big, cheap and profitable. Service revenues for the quarter stood at $1.272 billion, up from $1.128 billion in the previous quarter, while total income stood at $1.078 billion compared to $963 million. But here’s the big one. Profit for the quarter was $79 million, compared to a loss of $42 million in the previous three months.

We appreciate that comparing quarterly revenues sequentially is not the best way to do it, but when you consider Jio was a start-up 12 months ago, it makes year-on-year comparisons very difficult. 12 months ago, total income was $150,000 for the quarter, so we are making an exception for this one. What is remarkable is that Ambani has managed to turn a start-up into a profitable machine in just over a year.

So where has the profit come from? Firstly, more customers. Ovum’s WCIS estimates Jio’s customer numbers have increased to 169 million, up from 138 million in the previous quarter. Other telcos in the space are also increasing their total customer numbers, but no-where near as quickly as Jio. Market share increased for Jio in the quarter as well, up to 13.9% from 11.7% three months prior, stealing market share from everyone else.

Growing your subscription base in India is nothing to be particularly proud of, it is a fast developing nation with a huge number of unconnected citizens, but who can grab hold of the most each month with decide who is profitable and who is not. Jio is winning that battle, as while it is grabbing new subscriptions, it is also managing to convert customers from everyone else as well.

Another interesting area is the expenses. Total expenses for the quarter stood at $957.75 million, down from $1.028 billion. This is where it looks like the majority of the profits have been realised, and we’ve broken some of the more interesting statistics down for you below:

Expense Quarter ending Dec 2017 Quarter ending Sept 2017
Network Operating Expenses $272.29 million $215.09 million
Access Charge (Net) $169.58 million $335.49 million
Licence Fees/Spectrum Charge $97.63 million $62.56 million
Financial Costs $104.12 million $105.62 million

The network operating expenses have increased, but maybe not as much as you would imagine for a telcos which is still young and rolling out its footprint, but the interesting one is the access charge, this is where there seems to be a notable saving.

The access charge, or termination charge, is an area which has been quite contentious for the last couple of months. In September, Indian regulator TRAI ruled the amount rivals are allowed to charge for termination of calls on their networks would be drastically decreased. As a market entrant with a much smaller infrastructure footprint than its rivals, Jio would have been pleased with the news. For those who are being ravaged by Jio’s free services to customers, it is a car crash of a decision.

This is certainly a battle which was proving to be quite bitter in the Indian telco space, and while it might sound like quite a boring one on the surface, you can see why Jio didn’t want to back down. Quite simply, it looks to be the difference between profit and loss.

Jio started life as a business which was shaking the status quo in the Indian telco space, but it been looking like the real deal over the last six months. The only question was whether such a business model was sustainable, but these financials prove it certainly is. Unfortunately for its rivals, Jio is here to stay, and now it’s making money, we expect to see some more aggressive moves.

RCom, Altice and BT show you can’t just spend your way to relevance

Digital transformation has turned the telco industry on its head with some telcos trying to buy themselves out of the hole, but recent events have proved money isn’t always the answer.

There are three events which we think demonstrate this ignorance aptly; the growing pile of insolvency petitions at the Reliance Communications, Goldman Sachs trying to cut its exposure at serial spender Altice and BT’s fragile-looking gamble in the sports content space. In each case there is hope to turn fortunes around, but there is damning common trait as well; failure to transform into an agile, combative organization ready for the connected economy.

Reliance Communications doesn’t prove to be a reliable investment

Reliance Communications has been circling the drain for quite a while, the signs were there long before the insolvency rumours emerged, but this just shone a light on inadequacies. The latest bombshell, according to Bloomberg, involves Fortuna Public Relations, which has asked an Indian court to place the telco under insolvency proceedings on the grounds it has failed to pay its bills.

Unfortunately for Reliance Communications, this $70,000 bill (roughly) isn’t the only financial headache. It’s largest creditor, China Development Bank hit it with an insolvency petition last week, while Manipal Technologies and Ericsson’s Indian business have also done the same.

The threat here was Reliance Jio. Jio changed the landscape of the Indian telco space, moving the consumer away from minutes and SMS, and onto data. It shook the market, and Reliance Communications is just one of several telcos which has suffered. To combat the threat, Reliance Communications tried to purchase fellow struggling telco Aircell, using the logic of scale to counter the digital transformation threat. This deal clearly fell through, and it looks like everyone is just getting bored with Reliance Communications.

The problem with Reliance Communications is it simply did not adapt to the new landscape in the Indian market. It didn’t move enough customers onto more lucrative postpaid contracts and didn’t evolve its offering to be more data-centric. It lost its relevance to the consumer which was eager to consume as many digital services as possible.

BT’s gambling habit comes back to bite

CEO Gavin Patterson has led the charge to dominate the sports content world, but according to the FT, BT is scaling back its ambitious position in the sports stakes.

At a Morgan Stanley investor conference in Barcelona, Patterson is acknowledging the possibility BT might lose the Premier League rights auction in February, and is putting together a plan B. Having spent £3.8bn on football rights since 2012, it would appear the shift into content and the multi-play market has not worked out as expected.

While purchasing sporting rights was not necessarily a bad move, BT forgot about everything else. It might have some of the best sports properties around but want about movies, or TV series, or culture? Perhaps BT focused too much on content with a shelf-life, as opposed to investing in areas which provide a more secure foundation.

Sport will always be relevant, and an excellent way to engage consumers, but you never own the rights, you are simply leasing them for a couple of years before another bidding war. When it escalated the price a couple of years ago, a trend begun, which has increased the price of Premier League and Champions League rights each year.

BT is perhaps the architect of its own downfall, as you have to wonder whether the billions spent on securing these rights is worth it. When you looking at the underwhelming growth of BT’s TV business this year, you might suggest it is not.

This is only one problem however. BT tried to buy its way to relevance, but it’s content platform did not evolve with the scale of its ambitions. Unlike Sky or Netflix, some have pointed at the BT platform suggesting it is not very user friendly. Customer experience will be the winner in many people’s eyes, and BT failed to evolve its platform to meet the requirements of the demanding customer.

Altice spending spree does not repay investor confidence

Altice is another company who tried to gain entry into the digital economy by flashing the cash, but investor confidence is pretty low according to the FT, as operational performance failed to back up the billions spent by Chairman Patrick Drahi on acquisitions.

Goldman Sachs is the nervous investor in question, as it has apparently been trying to reduce its credit exposure at Altice for the last couple of weeks. And there is some pretty good reason for the nervousness. Shares plummeted downwards after the most recent quarterly results demonstrated poor ROI from recent acquisitions, as well as a mountain of debt measuring €51 billion.

Altice has been on a spending spree over the last few years in an attempt to create a content empire to rule the world, alas, it seemed it forgot to do anything with any of the companies it bought. It would appear Drahi was more concerned with growing the size of his kingdom rather than actually making any money from it.

Recent acquisitions have included video ad tech firm Teads for $307 million, $17.7 billion purchase of Cablevision, €7.4 billion for telco PT Portugal, $9.1 billion for Suddenlink Communications, SFR for €17 billion and Virgin Mobile France for €325 million.

Drahi does appear to be an excellent deal maker, though the Goldman Sachs nervousness does seem to indicate debt has been allowed to rise to high compared to the performance of the business. Perhaps this is another case of someone believing the way to dominate an industry is to throw as much money as possible at it.

Back to that annoying buzzword…

When you look at the businesses which has successfully ventured into the digital economy, this has been done through intelligent purchasing decisions, but also designing products which are more suitable for the connected economy. Orange is a very good example.

Not only has Orange invested heavily in fibre and 4G technologies with the aim of long-term profitability, it looked to areas of disruption outside the traditional telco comfort zone to seek new revenue opportunities, as opposed to pleading the same subscriber. Its venture into the banking world is an excellent example of marrying its mobile expertise, with an industry which was ripe for disruption.

Unfortunately for Reliance Communications, BT and Altice, the fundamentals of the business didn’t seem to change, there was simply money exchanged in the belief it would ready the business for the onslaught of the digitally native consumer. While acquisition is not necessarily a bad strategy, it has to be done for the right reasons. Google’s acquisition of YouTube, for instance, was an excellent example of a company looking ahead of the curve, while Orange’s acquisition of Groupama in April 2017 took it into a new vertical to potentially be the disruptor.

In the three examples above, it seems the companies wanted to avoid the difficult job of digital transformation, instead choosing to try and buy themselves out of a hole. Doesn’t look like it worked this time though.

Lack of brotherly love leaves RCom circling the drain

It’s a tale of two billionaire brothers having very different experiences in the telco space. Reliance Jio is flying high, its quarterly report implies Reliance Communications is dying a slow and painful death.

The numbers are not pretty at all. Total revenues for the quarter stood at roughly $407 million, compared to $768 million in the same period for 2016. Reliance Communications also lost $431 million this quarter, compared to a profit of roughly $9 million in 2016. The only number which increased was the one you didn’t want to, expenses; up to $839 million from $804 million.

This makes for a company which is in a lot of trouble; when the loss column is larger than the total revenue column, you have to start wondering what the point is. That said, doing some simple maths, this should come as little surprise. During this quarter in 2016, expenses exceeded total revenues, though the company made a profit. Some might argue the profit didn’t come from a solid market performance, but creative accountants, therefore there was no foundation for the company to mount a defence against an aggressive disruptor.

The Indian furnace is starting to get burn, and it starting to look like Reliance Communications can’t handle the heat. And just to add fuel to the flames, the team has also said it has missed two bond repayments in recent weeks. Things are not looking healthy.

Reliance Communications will blame Mukesh Ambani, the brother of its own CEO Anil Ambani, and his Jio army, but it has been quite clear for some time this is not a telco which is in a healthy position. Perhaps all big bro did was to highlight the quite glaring inadequacies in the Reliance Communications business. This could be confirmed by a number of different factors.

While there has been a steady decline in share price over the last three months, as the Reliance Jio business continues to tear up the Indian rule book, this is only the tip of the iceberg. Share price in Reliance Communications has been heading towards for more than four years. It is 92.59% lower than September 2013, the highest point in the last five years.

Subscriptions have also been heading in the same direction. According to Ovum’s WCIS, total subscriptions stood at just over 100 million in December 2015, though this has steadily decreased to 77 million as of this September. Over the same period, market share has declined from just below 10% to 6.4%.

One of the reasons India was prime for pricing disruptive is customer stickiness. While mature markets have transferred many of their customers to the more reliable and secure postpaid tariffs, the majority of India’s population has remained in the prepaid space. It makes gaining customer subscriptions easier, as they are not tied into 12-18 month contracts, but also means a business is much more vulnerable to disruption.

Going back to September 2015 again, Reliance Communications proportion of postpaid stood at 6.63% which was above the country’s average (5.44%), but still left the business at risk. Moving forward to today, the country’s average has increased to 7.8%, as has the split for many of Reliance Communications’ rivals. However, its own proportion of postpaid customers has decreased to 3.95%, leaving it in an even more precarious position, susceptible to the risk of more customers being easily stolen.

Combining all these factors reveal a business which has not been in good shape for some time. Big bro might have started stealing the life jackets, but Reliance Communications has been circling the drain for a while.