Reliance Jio Tariffs Seem Stupid

For the longest time I used a post-paid mobile phone. The hassle of recharging regularly, combined with the attractive rates available on post-paid “corporate” plans, meant that right from the time I graduated business school (in 2006) till I moved to England in 2017, I almost wholly used postpaid phones.

And then in England, I got a prepaid sim upon landing, and then soon discovered that it wasn’t more expensive than a postpaid (and there was no paperwork), and I kept the prepaid. Upon returning to India earlier this year, I’ve continued with a prepaid phone, with a Reliance Jio number. A few months back, I took an annual plan with Jio, paying for a year what I used to pay Airtel in less than two months before I moved out of India.

One of the reasons I don’t really mind having a pre-paid now is that it is far less of a hassle than postpaid. I have a 12 month program, for which I paid once, and until next May I don’t need to worry at all. There is one less bill to be paid each month.

And one thing that makes this “hassle-free” is that I don’t need to check my usage at all, either in terms of voice and data. It is a nicely bundled plan, with zero marginal cost for either calling or using data (the latter up to a (very high) limit). When there is a per-call charge, the balance notification at the end of each call places a mental cost (even if it is a low marginal cost), and you sometimes wonder if you need to call at all, or when you need to recharge.

The “current” zero marginal cost plan by Jio (I had a similar plan from EE in the UK) means that there is no such mental cost, and you can treat your prepaid mobile like you used to a postpaid.

Now things are changing. There are regulatory issues in India – on the “inter connection charge”. When a Jio customer calls an Airtel customer, Jio has to pay Airtel 6 paise per minute for Airtel’s service of completing the call on its network. This was earlier 14 paise a minute, which came down to 6 thanks to Jio’s lobbying, and was supposed to go away entirely in 2020.

When the entire market has settled on a zero marginal cost plan, like it is the case in the UK, inter connection charges don’t really matter. In India, however, there is massive asymmetry. People on older plans from Airtel and Vodafone still pay a lot for their calls, so they don’t mind paying a high interconnection charge, and want to receive a high inter-connection charge.

So over the last couple of months you’ve had massive lobbying, and hilarious exchanges like the debate among the major telcos regarding “missed calls” and how long the phone should ring.

Anyway, it appears that the inter connection charges won’t go away next year as planned. Jio is not happy. And in order to show its spite, it has decided to start charging for calling. A marginal charge of 6 paise a minute is going to be applied on Jio customers calling non-Jio phones.

I don’t see how this is going to be good for the Jio customer (I’m protected since I’d bought a long term plan earlier this year). The mental cost of calling comes back. You need to start worrying about what network the person receiving your call uses. You start getting that balance notification at the end of your call. You might need to recharge before your validity is over, creating more mental cost.

In other words, it seems like a rather dumb move by Jio. While it has clearly been taken to show that the operator is pissed off with the competition and the regulators, it is likely to hurt Ji0’s own business and drive its customers to the competition.

There were several smarter ways to handle this. Basically the problem is that Jio’s costs aren’t coming down as expected, so it needs to charge more. And there are several ways of charging more without imposing a mental cost.

One, the price point itself can be increased. Instead of Rs. 150 a month, it can charge Rs. 160. Second, instead of “unlimited free calls”, they can offer “1000 minutes of free calling per month” or something like that, with a different plan offering 2000 minutes of free calling per month. And so on.

But no. Reliance is more interested in making a statement than serving its own customers. And so it comes up with hare-brained schemes like charging per call “outside the network”. It will be interesting to see how their growth goes like over the next few months.

From STD Booths to Information Kiosks

An IT Action plan submitted to the first NDA government in 1998 had envisaged a plan to “turn STD/ISD booths to information kiosks”. Considering that this was at a time when most of India did not have even a basic dial-up connection to the internet, it can be thought to be pretty far-sighted.

The PIB notification says:

Internet access nodes to be opened by DoT and authorised ISPs in all district headquarters by January 26, 2000, and, until then, Internet access from the nearest node on local call rates; upgradation of STD/ISD booths into full-service ‘information kiosks’ offering e-mail, voice mail and Internet; and permission for the Railways, Defence, State Electricity Boards, National Power Grid Corporation as well as organisations like ONGC, GAIL and SAIL to use their fibre optic backbone to provide service to the public by interfacing with existing or new public networks.

In a speech in 2004, towards the end of his full term, then Prime Minister Atal Behari Vajpayee had mentioned the same idea. Speaking at the inauguration of the TIDEL Park in Chennai, he had said:

There is an urgent need to generate useful educational, commercial, and other types of content on the Internet in Indian languages. As an example, I would like to see information kiosks to become as common across the country as STD booths, where ordinary people can access e-mail in Indian languages and also receive useful information about programmes, schemes, and facilities made available by the Government, banks, and other institutions.

In 1998, after the panel had submitted its report, Vajpayee had set up a high-level ministerial committee to look into the recommendations and come up with an implementation plan. I’m not sure much came of it.

Speaking of STD booths and information kiosks, though, it is very interesting to see what New York is doing with its telephone booths. The Washington Post reports:

The city announced Monday that it had selected a consortium of advertising, technology and telecom companies to deploy throughout the city thousands of modern-day pay phones that will offer 24-hour, free gigabit WiFi connections, free calls to anywhere in the U.S., touch-screen displays with direct access to city services, maps and directions for tourists, and charging stations (for the cellphones you’d rather use). The devices will also be capable of connecting people straight to emergency responders, and broadcasting alerts from the city during emergencies like Hurricane Sandy.

This is very impressive. Rather than doing away with PCOs like they’ve done in the Netherlands, this seems like an extremely interesting way to make use of them. I hope we can implement some of these in India, too. Considering that it was under a BJP government that the STD Booth to Information Kiosk idea first came up, I hope that the current government takes steps to implement it.

The WhatsApp Effect

On the national data site ( the Telecom Regulatory Authority of India (TRAI) has put out some data on GSM telephony in the last five years. This has aggregate all-India data, and one of the data points available is “Outgoing SMS per subscriber per month”. The following graph plots this data over time:



Notice how the number of SMSs per user which rose sharply till mid 2011 then started suddenly dropping off! There seems to be a minor revival between March and June 2012, but apart from that it seems to be a secular decline. I can’t think of any reason apart from the profusion of smartphones and messaging apps on such phones such as WhatsApp, WeChat, etc. for this decline.

The total number of GSM subscribers also shows an interesting pattern,  going by the TRAI data. There is massive increase in the number of subscribers till 2012, and then the graph flatlines!



The only reason  I can think of for this is that there might have been some sort of a subscriber clean up in 2012. If you remember, when telcos introduced “unlimited subscription” plans for prepaid mobiles back in 2006, these so-called “unlimited plans” expired sometime in 2012. This was on account of re-auction of telecom spectrum that year. It is possible that users who were “active” only because of possession of unlimited plans were weeded out after 2012, and hence the flatline. Otherwise, the above trajectory is hard to believe.

Finally, what about the telecom tariffs? The supplied data set has information on the Average Revenue Per User (ARPU) per month, and the number of outgoing minutes of usage per subscriber. Assuming SMSs don’t cost anything (wrong assumption – since they do), we can calculate the telecom tariffs (in Rs. per minute). The following graph shows that:



Back in 2009, tariffs were close to a rupee a minute. However, between 2009 and 2010, tariffs dropped sharply, to the range of about 60 paisa per minute, which comes down to a paisa a second! Interestingly, tariffs have remained constant ever since.

Internet subscribers in India

The government data portal has released data on the number of internet subscribers in India over the last 5 years.

Going by this data, the number of internet subscribers increased steadily until 2012, but then decreased a bit between 2012 and 2013.



The market  grew 19% from 2009 to 10, 22% from 10 to 11, before slowing down to a growth of only 13% between 2011 and 2012, and actually decreasing by 5% to 2013.

The question is whether the market share growth varied by provider. The next two graphs show the total number of subscribers per provider and the market share of major providers, respectively. All data here is from



It is interesting that while BSNL continues to grow, the number of subscribers of MTNL has gone down. This graph also helps put perspective on how small Airtel is!

What would add to this analysis is data on how much data actually passes through the pipes of various providers – once that is taken into account, I think we should see that market share of providers such as Airtel and RCom (which supply to businesses) would b e much higher.