Mukesh Ambani led Reliance Jio did not only disrupt the telecom industry but also saved Rs 60,000 crores in annual savings for India. The number was put out in a report by the Institute for Competitiveness in March this year.
It said that the saving happened due to lower tariffs on data services that led to massive consumption.
“Within six months of Jio’s launch, India became the highest mobile data user in the world, consuming over 1 billion GB of data every month compared to 200 million GB earlier,” the IFC claimed in its report.
Explaining the methodology to reach this number, IFC said: “Taking a conservative estimate that every consumer uses 1 GB of data a month, we can calculate the financial gains to the economy by estimating the benefit to all 350 million internet subscribers of the country.”
However, the report claims that the most recent estimates of the Jio network show that its users on an average consume almost 10 GB of data, 700 minutes of voice and 134 hours of video every month.
Such levels of digital consumption were unprecedented a year and a half ago, the IFC said.
The rise in data consumption was a result of improved accessibility and affordability of internet offered by the new entrant.
“Jio has managed to change the face of the Indian telecom industry by changing the basis of competition from being voice-based to a data-based platform,” the report said.
The IFC has also claimed that the econometric analysis shows that Reliance Jio would boost -if everything in the economy remains constant- India’s GDP by about 5.65 per cent.
Last year in March, it was reported that Reliance Jio’s promotional offers may have robbed the government of almost Rs 800 crore in revenue.
The report emerged after the government saw massive decline in its revenue from licence fee.
The government collects licence fees and spectrum usage charges from operators, which are calculated on the basis of their revenue.
However, Jio’s free promotional offers forced other telecom companies to bring down their charges, leading to a drop in their revenue.
Later, Telecom Secretary JS Deepak in a letter asked the Trai to restrict the period of ‘promotional tariffs’ offered by telecom companies.
Reliance Industries chairman Mukesh Ambani launched the Group’s telecom venture in September 2016. So far, Reliance has spent more than USD 31 billion to break into India’s telecom market.
Earlier in a speech, Ambani said that in less than two years India has become the number 1 country in mobile broadband usage. “Jio users consumed more than 100 crore GB of data per month and that’s more than 3.3 crore GB a day,” he had said.
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