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Jio's Telecom Entry Helped Indians Save $10 Billion


A report by the Institute for Competitiveness (IFC) showed that the entry of Reliance Jio Infocomm led to an annual savings of $10 billion (approximately Rs 65,000 crores) for Indians.

Jio was introduced to make data accessible and affordable to all Indians. Before Jio was launched, the per GB of data came at a cost of Rs 152. Jio slashed the rates to Rs 10.

Jio's Telecom Entry Helped Indians Save $10 Billion

"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," said IFC in its report. IFC is the Gurgaon based Indian unit of the Institute for Strategy and Competitiveness at Harvard Business School.

As per its calculations, the annual savings of the whole economy comes to $10 billion with the launch of Jio and making data affordable to Indians. The calculation was made on the estimation that every consumer of the 350 million subscriber base in the country uses 1 GB of data per month on an average.

Jio changed the telecom industry's competition basis by providing free unlimited calls service. While the major players were making 75% of its revenue from voice calls, Jio shifted the focal point to data.

As a result, India surpassed the US in terms of the number of app downloads. It is now in the second position after China.

Impact on Economic Growth

To study the internet usage impact on the country's economic growth, IFC used data from 18 states in India during the 10-year period of 2004-14. The study revealed that a 10% increase in internet penetration can raise the GDP by 3.9% if all else remains constant in the economy.

It also said that in this regard, Jio will help improve India's per capita GDP by 5.65%, if all else remains constant.

High internet pentration not only improves the telecom sector in an economy but helps improve the digital usage in banking, entertainment, health and entertainment.

Apart from that, Jio's disruptive tariff affected its competitors badly. After its arrival, their profits and revenues were hit causing mergers (Vodafone, Idea) or exit/buyouts (Bharati Airtel) and even shutting down certain services (Aircel).

Read more about: jio reliance jio
Story first published: Friday, April 6, 2018, 17:05 [IST]
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