Guest blog by Jonathon Gordon, Expert Market Insight Analys,
Free data to gain subscribers in developing markets is working, but it’s causing a huge increase in traffic. Earlier this year, Reliance Jio, the newcomer to the Indian mobile market announced that it had added 100 million Subscribers in 170 days! That is a phenomenal achievement by any account. Much of the success was accomplished by offering free data.
The flow end effect was remarkable. The Reliance Jio free data offer and subsequent moves by competitors had a dramatic impact on OTT usage in India. Just as an example, the impact of free data on Faecbook was so profound that it took the company’s global monthly active user (MAU) numbers to record highs. On Facebook’s last earnings call, CFO David Wehner said. “The quarter witnessed Facebook’s “strongest absolute MAU and DAU (daily active user) additions year-over-year since being a public company.” When questioned further Wehner singled out India and said, “India was our strongest growth market.”
While there is no question that free data brings the subscribers, it also brings huge stream of traffic.
“Jio users consumed more than 1 billion GB of data per month on the Jio network. That’s more than 33 million GB a day,” chairman Mukesh Ambani said, adding that it has more than double the number of 4G base stations when compared to all the other Indian operators put together.
While Reliance Jio went to great expense to acquire these customers, the real challenge before them is how to keep them. As Jio starts charging for data, the basic interests of all parties shift dramatically. Subscribers will be more concerned about their content. Subscribers tend to want their content when, how and where they want it. The fact that they must share the network with another 1000 million-odd subscribers is of no interest to them at all.
On the flip-side, the operator is concerned about providing a quality “internet experience”, delivering content where, when and to whom it needs to go. The challenge is to maintain the experience, and keep a lid on the costs of delivery content, at quality to all subscribers.