Our last post mentioned, “roll out of 4G LTE and imminent data price wars” in anticipation of the Reliance Jio launch. And, a couple of days before we posted the infographic, Jio opened up their ‘freedom offer’, which was restricted earlier, to everyone ; it’s now probably becoming the ‘welcome offer’.
My interest in Jio was piqued the moment I saw tweets with screenshots, especially this one, of the data plan from ANI_News, which was live tweeting the AGM. The reason was my current mobile plan. I use a Rs. 1,299* plan that my current mobile operator offers (with a discount of Rs.783, they call it a 3G promo offer) for which I get, “299 minutes of free talk time”, “200 free local sms” and “1GB data” on their 3G network. My primary reason for choosing this plan was the data pack. I calculated that I needed about 1 GB of mobile data for on-the-go occasions and for everything else, there was my unlimited home wi-fi of which I consume about 6-8 GB of data on my phone every month. Now, with the Rs.499-M plan of Jio, which is less than half of my current mobile plan, I can get 4x (and more) the data at 10x speeds. What’s more, I can do away with my home wi-fi connection! The only thing that stopped me from going in for a Jio connection earlier was that my mobile phone (Oneplus One, running CyanogenMod) wasn’t a device originally listed in their device FAQ.
The moment the phone compatibility issue was taken care of with the Jio4g voice app, I was in the queue for a Jio SIM. The Aadhaar card based activation was a breeze and I had the Jio SIM about 30 minutes later – most of which were spent standing in the queue. Barring the face-to-face interaction with the Jio representative at the store, experience with Jio at other touchpoints hasn’t been satisfactory. I couldn’t get through to the Jio tollfree number easily to enquire about the compatibility of my phone on their network. When I did, I had to wait about 20 minutes and then talk to an untrained customer care associate who asked me what the, “brand name and model was for a Oneplus One” (even the rep at the store wasn’t that clear, all he said was, “if you’ve got an offer code on MyJio app, the phone works”). Activation took about 3 days since the day I got the SIM, and I got to know about it only after another call to the tollfree number because the activation SMS didn’t reach me.
Having used the Jio network for almost a day now, the overall usage experience is nothing great to write home about. I couldn’t place any outgoing calls to numbers on other networks barring Jio ones and an MTNL landline. Calls from other networks, including MTNL, to a Jio number don’t go. While I could receive SMSes on the Jio number, the ones I sent out weren’t received on numbers on other networks. The much touted 4G data speed too wasn’t in sight. I was getting download speeds ranging between 60-500 kbps. There are also other minor niggles in the app which will hopefully be ironed out soon – the Jio4gvoice app is always on, draining the battery more than necessary and I found the 4g connection drops when I am on a wi-fi network.
While there is bound to be some confusion, delay and a few niggles with a new launch – especially one with such grand objectives , there are a few things that are a complete master stroke by Jio…
- Free welcome offer of 3 months (unlimited calls and internet):
- Though they haven’t lived up to their promise of “5 minute walk-out-working” Aadhar based signup, people are willing to wait days for activation because everything is free as of now
- It allows Jio to stress test their network with a lower number of users at higher usage before they ask more people to pay-up for less usage in about 3 months
- If these users are delighted with the network (in all likelihood they’ll be, at least with the data network), the word of mouth they’ll generate is going to a huge marketing push
- Not porting numbers right now:
- Though the FAQs say you can port, they aren’t doing it right now (or rather the Jio rep I met in the store told me so). Imagine the additional headache of training their entire team to answer additional porting questions from customers. Coordinating porting with other telecoms and then intimating date and time of porting to new customers. Worst still, service disruptions during the porting process lasting hours making thousands (or lakhs) of customers angry
- I suspect, this is also probably forcing customers that are unwilling to let go of a number they’ve had for ages, to use Jio as a second network more for data than voice (and they have an “activate data only” option as well).
- As an offshoot, in the near term, demand for low cost dual sim 4G phones is probably going to hit the roof
- With the data from those using voice on Jio, Reliance can negotiate better with incumbents for more interoperation points and lower charges. Thereby providing better voice experience by the time they launch paid services in January 2017. (Read more about it here: “Jio supporting their demand for PoIs for 22 million users quoting 50 million call failures”, “TRAI set to reject higher interconnection charges from telcos”)
- The other thing which I suspect is going to happen is that while Reliance Jio has full visibility of which networks people are coming from or going to switch from (thanks to the data they are collecting during the signup), the telecom operators are in the blind as to how many of their existing users are trying out Jio. Come 1st January, the blindsided operators, might lose millions of subscribers at one go.
- Possibly converting a whole segment of feature phone / pre-paid users to smartphone users :
- This is just a hypothesis based on observations of those in queues at a few Jio stores. If the free voice calls and free SMS lures enough of those using features phones on pre-paid cards towards smartphones, and if they experiment with downloading music and video and are satisfied with the experience, and if a sufficient number continue on the Jio network after Jan 1st, then smartphone usage would have penetrated a whole new segment. Three big Ifs, I recognise, but the combination has the potential to be a game-changer.
- Of course, a large chunk of these users may turn out to be shrewder / more value-conscious than we give them credit for and may stop consuming data for entertainment once they have to pay for it. They might yet continue with Jio for voice calls, in which case though Jio would have succeeded in switching users from competing networks, the task of changing their usage behaviour and increasing ARPUs would still remain. Worst case, if the voice connectivity on Jio networks is poor (as it is currently) , they may switch back to their old networks and it’ll be a bet gone horribly wrong – the mother of all promotional offers, one that induced a lot of free trial, but generated little conversion or loyalty.
- Having to install MyJio + Jio4gvoice apps to generate offer code prior to getting a SIM:
- Even before Jio gives out the SIM, they have access to pretty much everything on a prospect’s phone – read and modify contacts, call log, calendar, sms, location – via this placeholder of an app called MyJio. Add Jio4gvioce, they can have everything else from your phone – identity (personal and device), camera, media (photos and everything else on your phone and sd card), microphone. Not many users in India are educated or knowledgeable about how much data an app can access and transmit.
Anyway, returning to our last post…
- Price wars are imminent: Airtel has already cut prices. BSNL announced that it will match Reliance “tariff-by-tariff”. Vodafone and Idea are yet to announce their plans.
- Mobile data consumption is set to explode: In the previous post, we mentioned that there are, “33.9 Million mobile users (~11% of total mobile internet users) who consume over 2 gigabytes of data per month”. Now, Reliance Jio claims, ‘the average monthly data consumption per user has exceeded 26 GB’ in April-June quarter and they had, ‘over 1.5 million test users’ even before the test launch. That’s a 13x jump in average data consumption by a smart phone user! That might be the best case of course, but considering that one gets 4GB of daytime data and unlimited night time data over mobile networks and 8 GB over Jio public wi-fi hotspots, even in the Rs. 299 (pre-paid) and Rs.499 (post-paid) plans, these averages aren’t going to hold for long. This might be the stimulus the telecom industry needs during a time when the average data ARPUs are falling ( as data prices have largely remained constant while average ARPUs have been falling, my hypothesis is that new users being added aren’t consuming as much data).
- Collateral damage – voice calls: There has been much acrimony already between Reliance and other operators. Reliance Jio has accused incumbent players like Bharti Airtel and Vodafone of not releasing sufficient inter-connection ports to terminate a voice call in another network (news report 1, 2). I think it’s a moot point because, eventually, people using Reliance Jio (or other networks matching Jio’s data prices) are going to be doing a lot more of VoIP and video calls. Operators are not going to choke on incoming voice as they are currently claiming, they are going to choke on incoming data.
- Collateral damage – entertainment apps: The SOP 5 with the Jio SIM is, “Install Jio Apps” and the MyJio app installs a Chat, Cinema, TV, Music, Magazine, News, Storage/Drive, Money, Fashion app. My hypothesis is all the lesser used or upcoming or limited content or me-too apps in these domains are going to really find it difficult to survive. I also think DTH operators are going to suffer a bit. I definitely don’t find it worthwhile to pay for a big bundled pack every month when I view only 1-2 hours of TV a week. If I can access those few shows online, I am definitely going to cast them on my TV and disconnect my DTH.
- Data services as the imagery drivers: We also mentioned, “Indians are still more concerned about voice quality than data services” and that, “among smart phone users elsewhere, data speed is considered to be the most important factor in determining both network performance and satisfaction with an operator”. India is going to catch-up to this paradigm soon. The provider who has better data network and app content is eventually going to win and Reliance Jio has already built a huge lead in it.
The last time, Reliance launched a mobile network, it brought the voice prices down. Hope they do it for data now. All in all, exciting times ahead both for users and watchers.
In this blog post, we mentioned that India is the #2 market in terms of Internet users behind China. But did you know that India was the #2 telecommunications market in terms of subscribers since 2008?
The telecom revolution stated in India on July 31st 1995 with a mobile call between the then WB chief minister, Jyoti Basu, and Union communications minister, Sukh Ram. Since then, mobile phones have permeated everywhere in India. There are 1,036 million telecom subscribers, 97% of these being mobile subscribers. The urban mobile teledensity is a mind boggling 147, 3x higher than rural at 49 (overall mobile teledensity of 79.2).
With such high penetration numbers, every telecom operator is now turning towards data to increase revenues. The growing smartphone penetration in India, driven by cheap handsets is expected to fuel this. In 2016, smart phone shipments are expected to overtake that of feature phones with analysts pointing out factors that can drive the average price of a smartphone further down from Rs.10,700/- in 2015.
While users in India are still more concerned about voice quality than data services (and the leading telecom operator has tried to take the high ground on this aspect with the open network campaign), among smart phone users elsewhere, data speed is considered to be the most important factor in determining both network performance and satisfaction with an operator.
[Here’s a quick look at the data in the infographic above (2015 data) :
- 1,010.9 million wireless telecom subscribers
- 311.7 million wireless internet subscribers
- 60% of these connections are on GPRS/Edge networks
- 36% on 3G technologies such as HSPA/WCDMA
- & only 0.8% of connections are on 4g networks technologies such as EVDO/CDMA/LTE
- The average mobile connection speed was 1,016 kbps with…
- … the average 2G speed at 77 kbps
- … the average 3G speed at 1,932 kbps and
- … the average 4G speed at 9,415 kbps
- The average mobile-connected end-user device generated 149 megabytes of mobile data traffic per month
- Average non-smartphone generated 49 megabytes of mobile data traffic
- Average smartphone generated 430 megabytes of mobile data traffic per month
- 9x more mobile data traffic per month than a basic handset
- Within this, the average 4G smartphone generated 1,256 MB of traffic per month in 2015, compared to 430 MB for non-4G smartphones.
- Average tablet generated 1,671 megabytes of mobile data traffic per month
- 34x more mobile data traffic per month than a basic handset
- There are an estimated 239 million mobile connected smartphones, 23.9% of device connections, and they generated 69.1% of total mobile traffic
- Incidentally, India has overtaken Japan to become the world’s third largest smartphone market
- There are 3.8 million tablets, 0.4% of device connections generating 4.2% of total mobile traffic
- In India, mobile video traffic is estimated to grow 20.8-fold from 2015 to 2020, a compound annual growth rate of 83%.
- Currently, web and other data applications generate about 48% of mobile data traffic, Video generates 40% , streaming audio generates 10% and file-sharing the balace 2% of India’s mobile data traffic
- Currently web browsing, emailing and social networking are the top three internet activities on smartphones ]
What these numbers tell you is that Indians are embracing the internet on the mobile, not PC. And this mobile Internet is currently work and social networking related. Going forward it will be increasingly video.
However, the quantum of consumption is still low. For example, the 430 MB consumed at an average speed of 2.643 kbps by an average smartphone on an average mobile connection is good enough to stream about half a movie in SD quality from Netflix. And, if you are going to use a social network like Facebook exclusively, it will last you about 4-5 hours (1 -2 MB per minute). These are of course averages. There is always the pareto principle, 33.9 Million mobile users (~11% of total mobile internet users) consume over 2 gigabytes of data per month. And it is from survey of these users, that you hear the hype about mobiles and apps.
The next few years are going to be exciting in this space, launch of multiple high spec smartphones at Rs.10,000 price points, roll out of 4G LTE (and imminent data price wars) and better last mile connectivity will further fuel mobile data consumption.
- Ravindra Ramavath
Our last post was on the penetration of e-commerce and the proportion of retail sales contributed by e-commerce , across 5 countries. After reading it, one of our loyal readers asked us for some more information about e-commerce in India. Hence, this time we’re looking at the total value of e-commerce sales contributed by various categories of purchase / transaction.
The pie-chart above shows the proportion of e-commerce sales contributed by various categories in India :
(Data source: IAMAI IMRB Icube 2015 )
- In India, the total value of e-commerce transactions was a whopping Rs. 125, 732 cr in 2015, and it grew at 28% CAGR between 2012-15.
- That online travel drives a bulk of e-commerce revenue in India is a fact that anyone who reads a newspaper is aware of ; this chart adds the details – 61% of the total e-commerce revenue of Rs. 1.25 lakh crore was driven by online travel. Of this, domestic air tickets are the largest chunk, followed by railway tickets, and then international air tickets.
- While online travel grew at a CAGR of 30% over the three years from ’12 to ‘15, rail tickets (17% CAGR) and domestic ticketing (22% CAGR) are slowing down the growth
- What we typically call e-commerce and should more accurately be termed e-tailing – i.e. the purchase of various types of products online – is actually just 30% of the total value of e-commerce transactions.
- However, e-tailing grew at a CAGR of 80% from ’12 to ‘15
- The 3 categories within ‘e-tailing’ that are driving the growth are ‘Mobiles phones’ (126% CAGR),’consumer durables’ (135% CAGR) and ‘home furnishings’ (94% CAGR).
- The ‘Food delivery’ segment , albeit relatively small at just 1.4% of total e-commerce, also grew by leaps and bounds with an 89% CAGR from ’12 to ‘15.
Now that we’re familiar with the data for India, let’s compare the proportional split of e-commerce sales in India by category with that in the U.S. :
(Data source: IAMAI IMRB Icube 2015 ; eMarketer Apr 14 for US showing 2015 projection, validated through other sources )
- In e-tailing in India, there is an over-dependence on ‘computers, durables and consumer electronics’ as compared to the U.S. – almost 50% of total e-tailing in India vs. 22% in U.S.
- If we benchmark to U.S., most categories in India – e.g. ‘apparel’, ‘personal care’, ‘home furnishings’, ‘books’, ‘auto and parts’ – have the scope to grow faster than ‘computers, durables and electronics’. Of course, benchmarking to the U.S. is something that could led to wrong conclusions too, as so many e-commerce firms in the hyperlocal space have seen recently ; hence the need to tread carefully after investigating consumer needs, current satisfaction levels and the nature of the gap
- Interestingly, ‘Auto and components’ is something that hasn’t taken off in e-commerce in India at all, while in the U.S. it is 10% of e-commerce by value. The Indian online car market is limited to ‘second hand cars’ which is mostly a ‘classifieds’ business.
- Ravindra Ramavath
In Q4 ’15, India surpassed the US to become the #2 market in terms of Internet users behind China. However, e-commerce sales in India are nowhere near the value they generate in the U.S. or in China. So here’s a look at internet penetration, digital buyers and e-commerce sales of the top 5 countries by total retail Sales.
We’ve been interested in this topic for a few years now ; in this post almost two years ago we tried to gauge the penetration of e-commerce in four BRIC countries by comparing the proportion of their population that was active online vs. the proportion of population that actually shopped online. In today’s post, we’ve gone one step further and looked at the value of sales originating from those that shop online, i.e. the proportion of total retail sales value that is contributed through the e-commerce channel. For this purpose, the countries that we’ve chosen are those that are the top 5 in terms of total value of retail sales, namely USA, China, Japan, Germany and India, in decreasing order of sales value.
[Since there’s a lot of information in this infographic, here’s how to read it :
Each of these five countries is linked to two sets of concentric circles, one in the top half of the chart and one in the bottom half of the chart. The set of concentric circles on the top had population numbers and that at the bottom has sales figures. Now for the details.
Let’s consider India as an example. The outermost circle in the top set of concentric circles for India tells us that our country has 925 mn people aged 14 years or more. The circle inside it shows that of these 925 mn people, 221 million or 24% are internet users. The innermost circle shows that only 82 Mn – or 9% of the 925 mn people – are digital shoppers and make online purchases of goods and services other than travel and events.
The bottom circle linked to each country shows the total value of retail sales and the proportion that is conducted via e-commerce. For instance, total retail sales in India are estimated at 818 Bn USD, and that conducted over e-commerce is just 14 Bn USD, or 1.7% of the total.]
So in spite of all the hype around this channel and the huge spend on advertising by the e-commerce players, a mere 9 % of our population shops online, and these purchases account for only 1% of total retail sales. Why only 1% ? Either due to a lower frequency of shopping online vs. visiting a retail store and / or due to a lower value of goods being purchased online. The latter seems unlikely since a large proportion of online sales are for mobile phones and accessories, followed by apparel and footwear, so it must be the low frequency to blame. Two big obstacles for e-commerce to surmount are now clear – the low penetration of online shopping amongst internet users, and the low frequency of online shopping among those that do shop online.
On to our neighbour China. While 56% of their total population is online, over half of these make purchases online. No wonder that sales through the e-commerce channel are 15.9% of total retail sales in China, as the bottom circle shows.
Surprisingly, though the US has a far greater proportion of population that makes purchases online ( 65% of its total population buys through e-commerce), these account for only 7.1% of total retail sales. Wonder whether it’s the ugly frequency problem rearing its head again, or whether it’s due to low unit value of goods purchased.
- Ravindra Ramavath
Thanks to two readers of our blog, we have some more information related to our last post.
Click on this link to read about Geosmin, one of the molecules that plays a role in petrichor. In fact, its name is derived from the Greek words ‘Earth’ and ‘smell’. Another interesting point, the human nose is extremely sensitive to geosmin and is able to detect it at concentrations as low as 5 parts per trillion. Geosmin is responsible for the muddy smell in many freshwater fish ; Geosmin breaks down in acidic conditions and becomes odourless, hence vinegar and other acidic ingredients are often used in recipes to cook these fish. Thanks for all this info, Oinks.
And this link is about a fragrance called ‘mitti attar’ made in Kannauj, which captures that refreshing energising fresh smell of wet mud after the rain. Thanks for sharing this article, Ruks. This article that is quoted in the earlier one mentions one fascinating factoid , albeit unrelated to petrichor. Apparently after the Empress Mumtaz Mahal passed away, Shah Jehaan never wore perfume again , attars had been one of the couple’s shared passions.
As the monsoon advanced across South India, Wikipedia shared an apt factoid on twitter last week, ‘The smell of rain is “petrichor.” ’ The oxford dictionary defines petrichor as ‘a pleasant smell that frequently accompanies the first rain after a long period of warm, dry weather.’ No wonder most of us love that ‘fresh wet mud’ smell – it heralds an end to the sultry summer and the onset of cloudy breezy weather, but more about that in a bit.
The word petrichor is derived from a combination of the Greek words ‘petra’ meaning stone, and ‘ichor’, the fluid that flows in the veins of the Gods in Greek mythology. Petrichor was first described in a paper published in Nature journal in 1964 by Australian CSIRO scientists Isabel Joy Bear and Richard G. Thomas, and the process that gives rise to the fragrance we perceive is fascinating indeed.
During dry periods, plants exude an oil that retards seed germination and early plant growth, this oil is absorbed by clay – based soil and rocks (hence the words ‘petra’ and ‘ichor’). The smell itself comes about when increased humidity fills the pores of rocks, soil, etc. with tiny amounts of water. While it’s only a minuscule amount, it is enough to flush the oil from the stone and release petrichor into the air; this must be why we get that slight whiff of the rain smell before it actually starts raining. This process is further accelerated when actual rain arrives and makes contact with a porous surface; air from the pores forms small bubbles which float to the surface and release aerosols, such aerosols carry the scent and spread it. The article that I referred to for much of this information also has a super slow motion video released by scientists at MIT last year that helps explain this process.
So now you know it, Petrichor – that fresh fragrance that makes everyone’s spirits rise, is not the fragrance of the rain, neither is it that of wet mud, it’s actually due to an oil that’s released from the rocks or soil into the air just before the rain begins to fall. Did the description of the process in the last paragraph kill the romance of that fragrance for you, or make it even more interesting ? I hope it’s the latter, because more deconstruction follows – this time of why we find the smell of the rain so pleasant.
The reason petrichor makes our spirits rise may actually be hardwired into our memories, part of our collective consciousness – some scientists think it’s due to our species’ reliance on rain for a plentiful supply of plants and game animals throughout history. This article describes some evidence that may support this hypothesis. Anthropologist Diana Young of the University of Queensland in Australia, who studied the culture of Western Australia’s Pitjantjatjara people, has observed that they associate the smell of rain with the color green, hinting at the deep-seated link between a season’s first rain and the expectation of growth and associated game animals, both crucial for their diet.
So next time you draw in a deep breath of that fresh wet mud smell and feel invigorated, think of how that reaction connects you to your ancestors from centuries ago.
Next post : Now that we’ve serendipitously stumbled upon the topic of fragrance and the collective consciousness, we’re going to take this thread further – look out for more examples in our next post.
- Zenobia Driver