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Tuesday, February 5, 2013

Reliance to launch 4G internet at INR 10 per GB. Cheap Dongle, cheap internet.

Karlo Dunia Mutthi Me!! Version 2.0


Once again Reliance is all set to show to the world that not only it is bold and consumer friendly, but also fond in exploring and occupying the entire business space available. Way back, it was Reliance who brought about a mobile revolution in the country. And now, it seems it will bring back data revolution across the nation.

Though it is coined by someone else, but I deeply remember the slogan "roti kapda ur makaan" changed into "roti kapda makaan aur bandwidth". Envisioned by one of the legends of modern times, his dream is all set to come true.


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Reliance has announced to offer 4G internet at 10 Rs per GB in India!!! This is tenth of a price for 2G and 50 times less than current 3G prices. The report says that RIL will also offer tablets at a subsidized price of Rs 3,500 and will bundle data plans for  Rs 10 per GB. However, the company did not commit a launch date. It was communicated that it was still in the planning phase. 

Much more can be read at http://articles.economictimes.indiatimes.com/2011-12-06/news/30481876_1_ril-plans-ril-management-tariff-plans

Now I seriously advice other players in this arena to start treating RIL's launch as a threat at this moment. And if very near moments to come, they do not come up with other strategies, it may really be very hard time for them. I would like to notify all that:

1. RIL is the only company to have pan-India spectrum. It can offer wireless broadband services on the 4G technology platform. It has already paid Rs 13,000 crore for these airwaves, as the story goes.

2. In 2003, the beautiful white handsets in INR 500 has been a huge success in the mass, but a gigantic loss for the company. In 2006, after Anil Ambani took charge of the telecom unit of the divided Reliance group, and bore a loss of nearly Rs 4,500 crore.

3.RIL also suggests of entering profoundly in tablets world. Currently the cheapest tablets in the market are between Rs 8000 and Rs 13,000. Aakash is not being counted in this research, because many still believe Aakash to be merely a hyperbole :). [Though, if they seriously come up, they have potential of rocking market. But may be they need consultants like me ;) ]

4.Typically, 1GB of data costs an operator less than Re.1. But they charge around Rs.100 on 2G and Rs.300-500 on 3G for same amount of data. The high cost is due to what they spend on infrastructure setup and maintenance. But after they reach breakeven (still 1-2 years left for many), the data prices will slash down drastically. 

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So plans for other companies should be:

a. Reduce data prices
b. increase uplink and download speeds
c. offer some package like 10 rupees a month for facebook. typically not many cross 500 mb on  a mobile device for facebook alone. you can plan to block video streaming if you like in this special pack
d. focus more on your security, and advertise on those stuff. because once the price is normalized, what everyone cares about next is your quality.
e.Treat RIL plans seriously and gear up your management people to just not to fight, rather survive in the business.
f. Think on the lines of increasing volume of sale and decreasing profit per user at present. Overall you will get more profit. Old management principal. But its high time to apply now!!!
g. target special segments like parents, rural areas - these people normally use less but want more things which are much more simpler than 3G/4G speeds - It is support, training.
h. properly target SMEs in India. They are growing at tremendous rate and they have huge bandwidth needs. Remember how Gmail and other Google Apps captured the market.
i. Contact Me :) Though it may cost you, but someone snatching your user base would be more painful!! Proper plans targeting proper people is my especiality. :)

5. Be adviced everyone, that Reliance will be using Qualcomm LTE technology. Hence the devices may be a slightly costlier, but speed guaranteed :)

6. We should not forget that in 2012, Reliance Industries (RIL) has signed a deal with Moscow-based company Spirit DSP to license Video and Voice engine. This may also be seen as a future plan of Skype-like video and voice calling services (VVoIP) to its subscribers. And this time with fastest LTE technology of Qualcomm. Hats off Reliance!! Skype (now Microsoft) and WhatsApp( now planning to charge its users), it is time for you people too to put in some serious thoughts.

7. The plan is not so easy path for reliance too. Lets assume that Reliance 4G gets 60 million subscribers [Ques: How I guessed? Answer: Read magazines and surveys !!]. Further assume that each user consumes 10 GB of Data every month. This means that normal bill of such a user today with other plans is around Rs 1200 + 300 as taxes, i.e. around 1500 INR. Now RIL has plans to chare INR 100 + lets say a tax of 20 INR, making a total of INR 120. So, the present difference is around 1380 INR. Hence, if we assume other operators to stay at same price, RIL will have a top-line of 60 million* 1380 i.e. around INR 7000 crore. And, it is important to keep in account that 10 GB is a surplus amount. Most, or lets say almost all, will have no need to cross that barrier. Hence, I guess for them to break even, it may take nearly 3  years. 

Kudos to Reliance from the core of my heart. I have all my wishes to you people to come up with a successful plan, and make this dream come true. Ofcource, deep penetration in the market and influencing subscribers data usage habbits is the key to success here. 

I just wish everything goes fine for users and RIL both. 2003 repetition of white handsets is all I fear about :)

--Cheers
Future is cheap.
Hick :)
Future luxury is directly proportional to my growth and inversely proportional to my present luxuries.
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