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The year the telecom sector quaked

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An interplay of myriad factors contributed to India’s telecom industry witnessing both turmoil and revolution in 2017. Consolidation was the buzzword as some of the largest telecom operators merged even as Reliance Jio Infocomm Ltd (RJio) emerged as a frontrunner for Reliance Communications’ (RCom) assets according to reports. RJio can also take credit for ushering in a data revolution in the country.

Moreover, smartphone penetration during the year increased three-fold with the aggregate number of users at more than 300 million. With smartphones still accounting for less than 50 per cent of handset users (650 million) in the country, another surge in data consumption is on the anvil.

The price war

Indian tycoon Mukesh Ambani sparked a price war in 2016 with the launch of Reliance Jio. As a consequence, the country’s large telcos have been burning through cash this year to hold on to their market share. Vodafone and Airtel tried luring customers through cheap data and unlimited calling offers. Reliance Jio, however, clearly won that battle. Within the first month of commercial operations, Jio announced that it had acquired 16 million subscribers. This was the fastest scaling up by any mobile network operator anywhere in the world. The operator crossed the 50 million subscriber mark 83 days from its launch, crossing 100 million subscribers on 22 February 2017. By October 2017, it had around 130 million subscribers. 

With telcos looking to push for higher data pack purchases, 4G became cheaper than 3G. Today, 4G data costs are as low as 1 paisa per MB.

Sectoral consolidation 

From as many as 13 players at one point in time, we are now left with just five major contenders even as RCom sits on the brink of leaving the fray. Earlier this year, Vodafone India and Idea Cellular decided to merge operations to create India’s largest telecom operator worth more than $23 billion beating Sunil Bharti Mittal-led Airtel. With this deal, Vodafone India’s valuation stood at Rs 82,800 crore and Idea’s at Rs 72,200 crore. 

RCom, reeling under a debt of around Rs 46,000 crore, shut down its voice services from 1 December 2017 after it failed to close its wireless business merger deal with Aircel. The Telecom Regulatory Authority of India (TRAI) has issued a directive to RCom’s customers to move to other networks by the end of this year. Vodafone, Airtel, and Jio created special packs for RCom customers to lure them to their networks. 

Telcos and handsets 

In July 2017, Jio introduced JioPhone–the company’s first affordable 4G feature phone powered by KaiOS. The phone was made available for a security deposit of Rs 1500, which could be reimbursed on returning the phone after three years. This phone was released for beta users on 15 August 2017 and pre-booking for regular users started on 24 August 2017. 

To strengthen its presence amidst the battle for market share, Airtel launched Android-powered 4G smartphones in partnership with Indian cellphone manufacturer Karbonn Mobiles. Airtel also partnered various other mobile handset manufacturers, including Intex, to create an 'open ecosystem' of affordable 4G smartphones.

Not one to be left out of the party, Vodafone and domestic handset maker Micromax came together to offer a smartphone priced a shade under Rs 1000 with a three-year rider.

Internet of Things

Despite posing privacy risks, Internet of Things, or IoT, remained one of the buzzwords in tech circles this year. According to Vodafone Plc’s annual IoT barometer report 2017-18, the percentage of companies with more than 50,000 connected devices active has doubled in the last 12 months with over 84 per cent of IoT adopters saying that their use of IoT has grown in the last year. From the Indian organisations that were a part of the study, 81% felt that IoT was key to digital transformation.

In India, Vodafone marked itself as the first brand to undergo this evolution. The telco repositioned itself as a contemporary and future-fit brand. It is a significant metamorphosis for one of India’s most iconic and loved brands since the 'Power to you' tagline was introduced in 2009. This new positioning, a part of Vodafone’s rebranding exercise across 36 countries, is designed to underpin its belief in new technologies and digital services playing a positive role in transforming society.

Net neutrality  

In what was seen as a sign of things to come, the US Federal Communications Commission voted in December to scrap net neutrality, which requires internet service providers to treat all internet traffic equally. The TRAI, not too long after, came out in strong support of net neutrality in a series of recommendations following a long process of consultations on the issue. The regulator believes that the licensing terms should be amplified to provide explicit restrictions on any sort of discrimination in internet access based on the content being accessed, the protocols being used or the user equipment being deployed. 

With IoT being the talk of the town, networks fighting to grab RCom’s assets and customers, and an ongoing telco war between Airtel, Vodafone, and Jio to become the country’s numero uno operator, it will be interesting to watch how the industry shapes up in 2018.

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