Jio free offer extends till March 2017; Here's why addressing congestion and adding FUP limit was pertinent

Reliance Industries Chairman and MD Mukesh Ambani announced the Jio Happy New Year offer at an event in Mumbai on 1 December. The offer is basically an extension of its Jio Welcome Offer for existing Jio customers, from 1 January onwards. And new users who activate their Jio SIMs after 4 December will be on-boarded on the Jio Happy New Year offer. This is essentially free usage of Jio data, voice and the complete bouquet of Jio applications and content till 31 March 2017.

Ambani touched upon a several points in his speech, including crossing 50 million subscribers within three months of launch, issue with Points of Interconnects (PoIs) from three telcos, congestion of networks leading to drop in speeds, announcement of JioMoney Merchant Solutions and more.

Addressing congestion issues

Ambani addressed the issue of network congestion in his speech. Over the last few months, there have been reports of speeds of the network being affected. Lot of existing Jio customers have expressed their displeasure at the drop in speeds on online forums. Ambani acknowledged that there was congestion in around 8 percent of the towers and customers addressed by these towers saw a drop in speed.

“About 8 percent of Jio towers have experienced congestion due to abnormally high data usage. As a result, customers served by these towers have experienced lower data speeds. While 92 percent of our base station, and customers, have been experiencing consistently high data speeds, we are not satisfied,” said Ambani.

For the majority of Jio users, data connectivity is the only reason for opting for the service. Unlike other telcos, Jio operates completely on 4G and even voice calls are routed over internet protocol. Network congestion is not desirable in such cases. With Jio showing commitment to look into the congestion issue, it sends across a positive message for existing users who have been facing genuine slow-speed issues.

The top three telcos in India – Airtel, Vodafone and Idea – have been in operation for many years now. It wouldn’t be wrong to say that they have a sticky subscriber base. For a new player such as Jio to break into the top three, quality of service will be a major priority. Addressing the issue of network congestion then becomes important. Ambani calls Jio a “customer-obsessed organisation” and has promised to de-congest the 8 percent towers which are expecting issues.

Voice calls is still a priority for most

Unlike other incumbents, Jio voice calls are routed over the internet. Lack of Points of Interconnects (PoI’s) has been a major issue Jio has been facing over the months. According to Jio, in the last three months close to 900 crore voice calls from Jio users to other networks (involving the top three telcos) did not pass through. Jio has taken up this issue and Trai has helped to mitigate matters , which has seen call drop rates come down. But there is still some way to go.

For an Indian consumer, voice calls are very important. Reports have shown that incumbents have made more revenues and profit from their voice call services than data services. If voice calling is a problem area, then that can inversely affect prospects of getting new customers on board.

Thanking the government and the regulator, Ambani said, “Over the past months, the call block rates has come down from over 90 percent to nearly 20 percent as of yesterday. We are working with all our fellow operators to ensure that in the coming weeks, this will come below the specified grade of service, which is 0.2 percent.” Ambani reiterated that all voice calls would continue to remain free.

Why FUP of 1GB data/day is a good move for the duration of offer period

It is no secret that we are a data-hungry nation. Provided there is no cap on the bandwidth, we go all out and use as much data as we want to. But let’s face it, some of us use it irresponsibly at times. Google’s free Wi-Fi service at railway stations has seen data usage which is 15x that used on cellular services.

With users having access to unlimited data in the Jio Welcome Offer, it was noticed that 20 percent of the users used disproportionate amount of data, which ultimately was creating issues for the remaining 80 percent of the users. Jio now has a data cap of 1GB per day for top 4G speeds, after which you will get throttled speeds. A lot of online chatter has expressed surprise at this move, some even being disappointed at dropping down the 4GB / day limit to 1GB / day.

1GB is the total bandwidth offered by a lot of telcos on a per month basis. Since September, we have seen some telcos increasing that limit to keep users happy, after Jio Welcome Offer was announced. 1GB per day on a smartphone is still a lot of data for high speed usage. Jio already has 50 mn users and with more users getting on board, if everyone is given access to unlimited data, congestion issues will keep cropping up.

Another reason I feel it is a good thing is that it will give enough time for people, specially the disproportionate users, to regulate their internet habits. So that when the offer ends on 31 March 2017, they are not caught off guard. It is a no-brainer that when you will get a data cap per month, and you will be paying for it, you usage patterns will drastically change. With this move, Jio seems to be making that process somewhat easier. So yes, while we do not like to see FUP being mentioned in our internet discourse, it is a fair move to ensure that 80 percent of the users who use the Jio service optimally do not suffer at the cost of the other 20 percent.

Three more months…

Three more months of free data and services will hopefully help Jio get more subscribers. It has set a goal of getting 100mn subscribers as fast as possible. Putting its networks to their limits with these huge numbers, in order to improve quality of service, while taking a hit with profits for six months, is something we haven’t seen any telco do before. With growing mobile subscriber base, it is in Jio’s interest to offer the best speeds and less congestion. Unlike other telcos, Jio is the only 4G player with a pan India network, so it has a considerably larger pallette to improve its networks across geographies.

Let’s not forget, Jio has ambitions beyond just telecom services. There are already speculations going on about Jio Fiber services being spoken about in the online world. In order to provide high quality data services, the next three months will be crucial. They will also determine which Jio customers stay on and who move on. At the same time, it will be interesting to see how incumbents ramp up their game.

All said and done, there are interesting times ahead for the Indian smartphone user.

Disclaimer: Reliance Jio is owned by Reliance Industries, who also own Network18, the publisher of Firstpost and tech2.