Saturday, September 3, 2016

DATA is the Clear winner Finally an Indian Telco wakes up

Reliance Industries chairman Mr. Mukesh Ambani has announced tariff plans of much anticipated Reliance Jio (4G+ network). Customer billing is only in terms of the amount of Data used per month Voice calls are completely free.

“For Reliance... data is the new oil, and intelligent data is the new petrol”Mukesh Ambani, Chairman and MD – Reliance Industries.

 I am sure this move is about to create a big dent on other operators revenue and business plan. If you have any doubt on Reliance Jio's plan and it's business objective you landed in correct page. Let's bisect read the fine print,

Approximately 7 years ago I wrote an article about Data volume in a mobile network and its importance in capacity planning. I also mentioned about the need for an innovative business plan to harvest the effective efficiency of Data and hence increase revenue. 

Most telecom industry experts know the importance of ARPU - Average Revenue Per User. This magic word helps to forecast revenue and do capacity planning. RF architect may not directly agree with me but our common variable erlang assists to determine ARPU, which is a clear business term for ROI calculation. 

   Erlang is defined as an amount of voice traffic in an hour. .i.e Total voice minutes / 60. Total voice minutes = no.of users x Avg usage per user.

Long ago Operators have moved away from erlang. simply because Voice channel is not the only one carried by signal Data is carried together. In recent times more DATA channels are used than Voice. Erlang is history and hence should be Voice based billing

Data usage is simply growing at an exponential rate than Voice. A photo you clicked and shared, A txt you received/forwarded and every call/emoji you use in watsapp/imessage/hangout/G+ simply Data. 

Read following data points from recent article from frost, 
  • An average 4G LTE smartphone consumes upwards of 2.5 GB of cellular data every month
  • Connected tablets are being used more and generating approximately 2.0 GB of cellular data on 4G networks
  • Connected laptops and air cards (yes these still exist!) consume more than 5 GB of cellular data every month
One more data point about DATA traffic growth from Internetworking product leader CISCO,

Sorry for fooling you with slightly incorrect detail. I said SLIGHTLY remember i am building my data points for DATA. The actual truth is every voice call you make is transferred as Data, we live in 4G world your voice is actually carried as Data in Teleco's core network. Billing you by per minute is simply a way to fool you. There is nothing like Roaming, A voice call is IP datagram gets routed across state (say CA to Tx or TN to UP) mostly similar to Data (From sender (your cell) to Server and server to Receiver). So, from a Telecom infrastructure perspective, you need to build and maintain same intelligence for Data and Voice by allowing a not growing segment Reliance is marketing well to capture customers from a competitor. 

Bill your customer based on DATA usage is the way forward. Reliance Jio is making a bold move and a logical move. Good luck Jio, i am sure Reliance knows to win a customer you need to do lot more than an innovative billing. Quality metrics are very important than simplified billing. 

All the best RELIANCE JIO. 

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