2G to 6G in the poll season

Reliance Jio's offer to equip thousands of 2G users with 4G-level data could bring India and Bharat closer ahead of the elections

When 2G, 4G, 5G and 6G (3G has been phased out by private telcos) are bandied around simultaneously in equal measure, one may wonder what’s cooking. Earlier this week, we heard the government and the industry talk back-to-back about the many generations of mobile telephony, sending out seemingly contrasting signals.

Reliance Jio, the established disruptor in the telecom industry, announced from its Mumbai headquarters the launch of 4G-powered feature phones priced at Rs 999. The company calls it Bharat Phone, seeking to win over a large chunk of the 2G subscriber base from rival camps residing in smaller towns and rural India, as the name “Bharat” suggests. The goal is to make the country “2G mukt’’, or free of 2G.

In New Delhi, just before the Reliance Jio feature phone announcement, Union Communications Minister Ashwini Vaishnaw was raising the pitch for 5G and the yet-to-arrive 6G platform. One new 5G tower is going live in India every minute, the minister told the audience at a telecom event. He also pressed the point that already 270,000 5G base stations have been set up across the country. This is out of a total of 2.5 million base stations in India, a large portion of which is catering to the swelling base of internet users estimated at around 900 million, up from 250 million a decade ago. The minister also launched the Bharat 6G alliance the same day, aiming to create a 6G ecosystem. The idea is to have at least 10 per cent of the 6G patents from India by 2030. He had something to say on 4G too — that the 4G footprint was currently at 99 per cent and would soon reach 100 per cent  with the help of the recent government grant of Rs 38,000 crore to expand coverage.

The almost coinciding narrative on 2G to 6G is sure to have significant ramifications for the overall telecom industry and the political scene, particularly in the election season.

Joining the party late, Reliance Jio had started with 4G. In contrast, Vodafone Idea, Bharti Airtel and state-owned Bharat Sanchar Nigam Ltd (BSNL) grew their user base on the strength of 2G subscribers over the years before shifting to higher grades as technology evolved. So, Jio is now trying to woo the low-Arpu (average revenue per user per month) and basic phone using customers of Bharti, Vodafone Idea and BSNL, with a low-priced 4G feature phone that enables plenty of data on the move. If this move succeeds as planned, Reliance Jio with 433 million mobile users would manage to fast-track its subscriber growth and widen the gap even more with the second-largest player Bharti Airtel, which has 371 million mobile users, 20 per cent of whom are 2G subscribers. Vodafone Idea, with a mobile base of 234 million, could be hurt the most at a time when it’s already extremely stretched. Almost 26 per cent of Vodafone Idea subscriber base constitutes 2G users and it has no 5G subscriber yet.

Jio’s cheap 4G option, the second time the company is doing it in six years, may also hasten the duopoly structure in telecom if Vodafone Idea fails to raise the much-awaited funds soon. Apart from the risk of losing their 2G customers to Jio, rivals Bharti Airtel and Vodafone Idea are also staring at another  crisis. That is, they will find it tough to raise tariffs at a time when Jio is playing the discounting game all over again. In a recent interview to this newspaper, Bharti Group Chairman Sunil Mittal said that the entire dream of Digital India rests on only a handful of telecom players and, therefore, it was important for them to be financially sustainable. He reiterated that Arpu for a telco should at least be Rs 300 a month. In the quarter ended March 31, 2023, Airtel’s Arpu was at Rs 193 against Jio’s Rs 178.

Even as India remains the cheapest destination for telecom tariffs, investments are huge in the sector. In the last two years, the top telcos have invested around Rs 1 trillion each, including on 5G spectrum and infrastructure. With low tariffs and discounting, such investments in the long run will be difficult if strategies don’t change and telcos don’t bite the bullet on raising tariffs.  

However, the telecom industry is only one side of the story. The need of the hour is to have all critical technologies at hand to woo the voter. The Rs 999 offer to arm thousands of 2G users with 4G-level data could translate into access to social media posts about successful central and state government schemes, as well as YouTube interviews of politicians with influencers. At the same time, the fast rollout of 5G base stations would mean a higher level of engagement with the people of the country through online education, transformative health services and more. Cearly, the interplay between these various “Gs” is set to unite Bharat and India as we prepare for the 2024 battle.