Billionaire Mukesh Ambani Has Shrunk The TV
Not just rival wireless carriers, the cheap data boom driven by India’s richest man now threatens to disrupt cable television services providers.
Nearly half of the customers of Mukesh Ambani’s telecom upstart Reliance Jio Infocomm Ltd. said they use their mobile internet connection “primarily” to watch live television, according to a report by Bank of America Merrill Lynch. “The telecom aggregation apps like JioTV and JioCinema are turning into one-stop places for consumers to view all content as they do not have to download the individual over-the-top streaming apps”.
BofAML’s survey also revealed that JioTV—the live television streaming app—was the most used among the bouquet of services that Jio offers. A similar trend was visible at India’s largest telecom operator Bharti Airtel Ltd. as well. The Airtel TV app has over 10 million downloads “despite Bharti being relatively late to the game,” the report said.
Data usage in India has rocketed since Jio started its operations in September 2016. An average Indian telecom user now consumes 2GB of data every month compared to 0.23GB before Jio’s launch, according to quarterly data from the Telecom Regulatory Authority of India. That number is expected to go up to 18GB a month in the next five years, according to consultancy firm EY.
This surge is fuelled by Jio's free services for the first six months followed by cheaper data tariffs, and now its 4G-supporting smartphones. Customers who were used to shelling out roughly Rs 300 for 1GB of data, now get it for about Rs 15.
A deluge of mobile data means they are watching videos.
Two-thirds of the 1,000 Jio users surveyed by BofAML said that they use data to stream videos online. About 68 percent of them download videos on their mobile handsets. Only 23 percent said that their data usage habits have not changed because of Jio’s entry.
YouTube is the go-to destination for a majority of those who consume content on their phones, the survey showed. The second most popular was Hotstar with other services like Zee5 andc Eros picking up the remains.
“We consider this as a new emerging theme in India and expect content companies to be beneficiaries of the telecom price wars,” the report said. “However, given the nascent stage of the market, we don’t see a clear winner in the OTT space.”
That could soon put cable television providers in a spot as millenials have started weighing if they should cut the cord. An overwhelming 62 percent of the millenials surveyed by BofAML are willing to remove their cable TV connection if internet speed improves and online streaming prices decline.
It’s not an immediate threat though. “As the average monthly cable bill in India of Rs 200-400 is very low when compared to a good broadband connection (Rs 500+), cord-cutting has not been considered a major risk,” BofAML said.