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The Jio effect: 8 predictions for the next 12 months that will shake up India

Our early thoughts on the likely impact of Jio's big announcement today, besides a drop in rates from incumbents of course!

Jio has launched its war cry for the Indian market, and it reads “Rs 50 per GB of data”. With free voice calls, zero roaming and 4G handsets below Rs 3,000, this is a good time to arm yourself with the big changes that will show up soon, and more that will play out over the next 12 months.
The Jio effect
1. The volatile, price sensitive handset market, especially the category between Rs 7,000 to Rs 15,000 could see some serious pain. Handsets between these price points were so far delivering a ‘fully loaded’ experience at a value price point. This has also been the favourite hunting ground, or to be honest, the most viable price territory for desi warriors like Micromax, Karbonn, Lava and more to sell volumes. All of that could be under threat and change, with margin pressure and outright migration to lower priced handsets that provide a good 4g experience at lower price points.

2. Video on demand to bloom: After struggling with iffy speeds, expensive broadband, and fierce resistance to paid content, video on demand players like Hotstar, Netflix, Ditto TV and Hooq could see a new wind in their sales, thanks to better data affordability and better quality.9read higher data speeds). In fact, singles and no child families might even consider these options over cable/dish and satellite TV now, with the added bonus of choice and flexibility at a nominally more cost.

3. Video content to gather fresh legs: While it is no secret that video content has been increasingly hogging the largest share of data, for consumers , video consumption will spike higher. And where consumers go, can marketers be far behind? Expect to see a lot more brands hop on to video content, even as incumbent users move to create even more content to stay in touch.

4. In a counter intuitive move, expect permission based marketing, and a greater demand for stronger anti spam measures and adherence to privacy laws to come centre stage. Free calls might sound like an invitation to non-stop soliciting on the phone, but it will inevitably lead to a stronger demand to enforce the rules on tele-calling, and better enforcement of DNC (Do not call) rules.

5. The Rs 251 or Rs 501 phone might actually happen: Combine the steep dive in smartphone prices with the attractive deals across services and products for first time users, and it is only a matter of time before someone manages to give away a free phone as long as you avail of these services within a reasonable period of time. Think about it: Between a first free ride from Uber and Ola, extra discount on your first food order, special cashback on your first utility bill payment and more, reaching 3000 or even 4000 of ‘value’ earned on your phone is far easier than you think. At least some manufacturer should wake up to this opportunity soon.

6. Let’s hope this one doesn’t come to pass, but porn consumption will shoot. And as and when it registers on the powers that be, attempts will be made (again) to control it somehow. Not a happy prospect for freedom of speech advocates, but a safe prediction to make for the next 12 months.

7. On a conservative estimate of 20-25 million users at an ARPU of Rs 400, expect the world’s largest Startup from Reliance to be on course for a run clock a run rate of over Rs 12,000 crores by year end for the full 12 month period starting Sept.

8. Non telecom categories to benefit? This one is a really tough one, but seems well worth the risk. With data becoming even more of a commodity and cheaper smartphones, expect some consumer segments to have their fill, and go back to spending some of the money saved on what else, other everyday needs. While there have been enough news reports and anecdotal evidence on how the poor are sacrificing product upgrades in the FMCG and other categories to buy their next data ‘fix’ , perhaps this drop will put some of the money back in the hands of consumers to spend elsewhere?

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