Blockbuster telecom operator Reliance Jio is expected to start the supply of its 4 G towards the end of December. It has a pan India license in 4G service and also has the permission to give voice services.
Jio’s entry is of national economic importance. Broadband is the next basic utility. New generation digital services are remaining on the starting block because of lack of broadband infrastructure. A platform where your services like education, business and communication is delivered.
Data is the next key word in India’s business and economy. With large population and huge economic potential, 4G and broadband are going to revolutionize India’s digital economy. According to the World Bank, ‘a 10% increase in broadband penetration increases the per capita GDP by 1.38% in the developing countries.’
Slowness on broadband front is a dampener on digital economy prospects in India. When the developed world and the emerging market peers like China are migrating to digital economy at a brisk pace India can’t be too slow.
In this context, Jios’ entry has strong industry impacts. It may give tremendous competition to the existing players who have failed to satisfy data demand by reelecting to make investment on 3G. Airtel’s Sunil Mittal predicted that Jio’s entry will be a shocker to the sector. Consulting firm Fitch observed that Jio will drive down data tariff by 10%.
Looking at the industry, Jio has some advantages. First it doesn’t have a negative impact; but its competitors are advertising 4G when they have failed to give quality 3G. Second, the economy is on the verge delivering large scale broadband data oriented services.
Finally, other disruptive technology mode which is better than 4G is not going to happen quickly in India. This means Reliance need not fear of disruptors significantly unlike that happened in the case of 3G.
If Reliance can able to deliver as its prospects indicate, it will be a boon to the country’s digital economy ambitions. India is placed at 114th place in terms of broadband penetration.
Several issues are hindering the inevitable journey to digital economy. Poor infrastructure is the leading one. Once, a cost effective broadband platform is built, the broadband ecosystem including digital content services, video online services, health care etc will flourish next. The beginning point is connectivity and infrastructure and hence attempts like Jio should be succeeded.