There's a data explosion happening in India — and Jio is at the center of it

India Mobile Overview

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Indian telecom Reliance Jio accounts for 85% — or 1 billion GB — of the 1.2 billion GB consumed monthly in the country, Sunil Dutt, Jio’s president of devices, announced at Xiaomi’s Mi Max 2 Launch on Tuesday.

India consumes more data than any other country in the world — monthly wireless data usage there grew 550% between June 2016 and March 2017, according to Kleiner Perkins. This new development positions Reliance Jio to emerge as a global leader in mobile data traffic.

Reliance Jio’s success in India has largely hinged on its ability to meet two primary demands in the Indian mobile market:

Mobile data is often cost prohibitive for consumers in India. In January 2016, it took Indian consumers earning minimum wage more than 12 hours of work to purchase 1 GB of data, according to Tech in Asia. For comparison, a US consumer earning minimum wage had to put in 4 hours of work to purchase the same amount of data. After its launch in September of last year, Jio offered customers 4GB of free 4G data as part of its Welcome Offer promotion. Currently, Jio customers can buy a prepaid SIM for around $0.75 for 1GB of 4G data.
There’s high demand for access to 4G networks in India. The average 4G smartphone user in India consumes around 1.3GB of data each month. It’s high-speed internet access from 4G networks largely powers video consumption. Reliance Jio’s strategy to meet demand for access to 4G networks is what likely led to the company’s 15% share of the world’s mobile data traffic and Jio capturing the vast majority of India’s video traffic.

There’s been significant consolidation in the Indian market in recent months, and Jio is likely a strong force behind it. The company’s aggressive business model has made it challenging for rival mobile operators to expand their national footprint. To combat this, some telecoms, like Bharti Airtel, have turned to mergers and acquisitions.

Still, it’s yet to be seen whether Jio’s business model is sustainable in the long term. Although Jio has been successful in enticing consumers by appealing to India’s demand for data, while also leveraging their need to access inexpensive data, it’s unclear how long Jio can continue to undercut competition in India. Already, the company’s main competitors have matched its price offerings. This could lead to an ongoing pricing war.

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