Reliance Jio Announces Progress, Amid Decreasing ARPU

Back in October we wrote about Jio reaching 250 million subscribers, now it has announced over 300 million subscribers up to March 2019. In fact their Q4 financial results summarises the results nicely, as can be seen in the picture below.

In summary:

• Total subscriber base stands at 306.7 million
• ARPU ₹126.2 (roughly US $1.8)
• Average data consumption 10.9 GB/ user/ month.
• Wireless Data Consumption across network was 956 crore GB (9560 Petabytes) during the quarter 
• Average Voice 823 minutes of VOLTE voice/ user/ month
• Jio network carried ~71% of 4G data traffic in India during CY18

One of the strategies that Jio has adopted is to bring connectivity to even the most remote locations. In a way they are forced to do this as they do not have legacy networks and rely on VoLTE for voice. VoLTE only works reliably with a proper 4G coverage.

In addition to providing voice & data, Jio is bringing unique Apps for not just keeping customers updated and in-control of their package, service and spending but also entertainment which is a must have nowadays for any service to succeed. Smart feature phones using KaiOS is letting them bring new users who are too reluctant to transition to smartphones.

OpenSignal report on India Mobile Network Experience, April 2019 pointed out that:

The story of Jio's network expansion is remarkable. Jio has been a fully-fledged 4G operator for less than three years, but has completely disrupted the market with its rapid network rollout and unlimited data plans. In our first report on the India market two years ago, Jio scored an outstanding 91.5% 4G Availability. Six months later the operator had passed the 95% mark, and its score has been steadily growing ever since.

To put this in context, Jio's winning 4G Availability score of 97.5% is the highest we have ever recorded at country level in any of our reports. In the U.S., two operators have scored over 90%, while in Taiwan four are over this mark — but none in either market have yet passed 95%. Even in the Netherlands, arguably Europe's most advanced mobile market, all the operators have 4G Availability scores over 90%, but only one has passed 95% — and only just, reaching 95.2% — while Japan has two operators over this benchmark. In a country with the sheer geographical size and population base of India, where the landscape ranges from huge cities to high mountains and vast agricultural plains, Jio's achievement of reaching 97.5% 4G Availability in such a short time is truly astonishing.

Jio has themselves committed to achieve all-IP 4G LTE network population coverage of 99% shortly. We will wait and see when this will happen but in the meantime, Reliance Jio has plenty to celebrate.

VEON: Rebrand and Revolutionising?

VEON came into existence early 2017, a rebrand of VimpelCom.

The Amsterdam-based telco was first founded in 1992 as Russian operator PJSC VimpelCom.  It took its current form in 2009 when shareholders Telenor and Alfa agreed to merge their assets in VimpelCom and Ukraine’s Kyivstar to create VimpelCom Ltd. In 2010 VimpelCom acquired Orascom Telecom Holding (operating in Pakistan, Bangladesh, Algeria) and Wind Italy from Egypt’s Naguib Sawiris.

VEON is among the world’s 10 largest communications network operators by subscription, with around 235 million customers in 13 countries.The company is in the process of shifting away from being a data services company, to internet via mobile devices.

VEON’s geographical footprint (September 2017) Source: VEON, STL Partners

It operates under a number of brand names in various countries for example: 

Source: VEON, STL Partners

VEON’s largest market is Russia, where it has over 58 million mobile subscribers, making up 24% of its global total. Pakistan and Bangladesh comprise its second largest markets by subscribers, while it has over 30 million customers in Italy under its Wind Tre brand, a joint venture with CK Hutchison.

VEON mobile customers by region, H2 2017 (millions)

Source: Veon, STL Partner

In July 2017, VEON announced that it was making progress in its strategy to reinvent itself as an online player by introducing its messaging and mobile services app in four new markets, including its largest in Russia and Pakistan.The messaging app, which is designed to compete with the likes of Facebook Inc’s WhatsApp and Rakuten Inc’s Viber, offers free services to customers via its mobile network without users incurring data charges as other apps do. According to Mark MacGann, VEON’s Group Chief Corporate & Public Affairs Officer : 

"VEON is not just communication application. It is a complete platform. We promise to completely revolutionise the digital landscape of the country and how Pakistanis communicate. We aim to disrupt the market and redefine the personal internet experience by offering diverse services to our subscribers like access to information and services and engage with the world even when they are out of balance. VEON will create its unique position in the market in the months and years to come."

At the end of October 2017 VEON announced that its App had reached 1 million downloads, in Pakistan, in the just the span of 19 days.

Two more markets where VEON will offer the app are Ukraine and Georgia. VEON aims to offer basic communication for free, while taking a cut of proceeds from partnerships with popular internet services it offers through its app, using data insights it can glean as a network operator.Deals are expected to range from streaming music to ride-hailing to retail to financial services offers. Early partners have included music streaming service Deezer and credit card company Mastercard.

It will be fascinating to monitor future developments with this operator and its markets.