Faster, cheaper data key to 4th Industrial Revolution
By choice, I have made the Philippines my second home. I love everything here except the dreary and expensive internet, which is so un-Filipino in nature—because it lacks the fun, fast, helpful and accommodating attitude I see here in abundance.
Internet connectivity in the Philippines not just frustrates me, it also tests my patience to the hilt. Maybe because I am from India, where data is the cheapest in the world, and where I can consume 60-GB data and enjoy unlimited calls and texts for just P250 a month. A recent study covering 230 countries showed that 1-GB mobile data costs you just $0.25 in India against the global average of $8.53, and compared to $6.66 in the United Kingdom and $12.37 in the United States.
The International Monetary Fund and the World Bank have hailed India as the bright spot in a global economy that faces depressive headwinds. It does not mean that emerging superpower India is insulated from global crisis or does not have its own share of worries, from declining GDP growth to weakening domestic demand or dwindling exports. But I strongly feel the telecom industry has played a crucial role in making India that bright spot.
India telecom has undergone a major transition that, I feel, would make a good case study for the Philippines. The Indian market was once monopolized, and cutthroat competition was the hallmark of this growth story. India, like many other Asian neighbors, had its tasks cut out. Challenges were manifold, from the high cost of infrastructure required to crisscross the country’s 3.28-million-kilometer length and 2.9-million-km width, to the shortage of investments. Until a few years back, the cost of 1-GB data was almost $5. The drop in price since then speaks well for the industry’s radical transformation, which was made possible only with strong and liberal policy support, innovation-led approaches, new technologies, robust infrastructure and solid investments.
Things changed suddenly for the better in the last three years after the entry of Reliance Jio Infocomm, owned by Asia’s richest man, Mukesh Ambani, who disrupted India’s existing ecosystem. Jio has won 280 million customers within a short span of time by offering free domestic voice calls, dirt-cheap data services and virtually free smartphones. Jio has invested roughly $37 billion to create the digital infrastructure required, and make mobile data damn cheap.
Ambani is pumping a further $730 million into his company. And he can afford to do so, because his parent company accounts for 9 percent of India’s exports, and its market cap is $125 billion. With a net worth of $49.6 billion, he is among the 10 richest people on the planet, and the only Asian on the list. This 62-year-old is on Time magazine’s 100 most influential persons list, along with the likes of Mark Zuckerberg and Donald Trump. Ambani, who once lived in a two-room apartment, now occupies a $2-billion 14-story residence called Antilia that is the second most expensive home in the world after Buckingham Palace, with some 600 household staff.
All these personal tidbits apart, Ambani should be credited for making India ready for the fourth Industrial Revolution (Industry 4.0), which will be all about advanced analytics, big data, robotics and automation, artificial intelligence, internet of things and process digitization across the business value chain.
It is still a guarded secret how Ambani is going to gain returns on such a huge investment, but given his business acumen and background, he may just emerge as the biggest gainer at the end of the day. One argument is that he will capture the spending of Indian households through a comprehensive ecosystem for data, content and retail. As part of this push, his company is rolling out fiber-to-home broadband networks and betting big on retail to leverage this captive user base. India has over 430 million smartphone users, and it is one of the largest consumers of data in the world. That number is expected to be one billion by 2020.
But, along with Ambani, millions of Indians like me are also gainers. His cannibalistic price war has reduced the yawning urban-rural gap, disparities between privilege and poverty, and the divide between connectivity and capability. The overall impact of this revolution on the Indian economy is massive in terms of prosperity and economic growth. Cheap data and accessibility have created a favorable pitch for India’s startup culture and entrepreneurship. The hypercompetition has also led to fast advances in technology, and there is 4G coverage across every nook and corner of the country now. It has also led to a consolidation phase, as small players could not survive with such low Arpu (average revenue per user), which is again one of the lowest in the world.
Apart from ultracheap data, Jio has led to increased consumption of online content. Free voice calls, the proliferation of 4G smartphones, faster mobile data, improved broadband connectivity, increased online streaming services, the decrease in the need for multiple connections and higher investments in optical fiber network were among the many fruits of this one man’s bold and ambitious move.
I am sure the Philippines, my second home, also has the capability to learn from, duplicate and even outdo the success story of my first home.
Joseph Alexander, a former journalist who cofounded the media/brand consultancy firm Passion4Communication Ltd., has been married to a Filipino for over 14 years and is based in Manila.
