All posts in the Telecom category

Smartphones / Apps : How Far Is Far Enough?

Published October 7, 2017 by vishalvkale

A stunning news on a news daily, relating to an App Interface of a very popular service brand, caught my attention : Uber may have been secretly recording your iPhone screen, even when the app is closed. Will Strafach, a New York-based security researcher, discovered that the taxi hailing app had received a special permission from Apple to access the screen-recording feature. The company, however, rejected the security breach fears, stating the code was installed to improve the experience on Apple Watch version of the app.

Now this is frankly stupidity on a colossal scale; accessing a user’s screen even when the app is closed … where are we going as an industry? By what stretch of imagination, strategy, morality or intelligence is this an advance? How far are we going to allow apps, internet and computers into our lives? This has now lead me to question the entire Smartphone aspect : I think there is a need for users to take their personal lives off the Smartphone. This has happened on Apple; how long before someone does it for Android? And it is already being done? We have no way of knowing! We, the Telecom, Smartphone, App industry have gone half a dozen steps too far. Calling for introspection!
It isn’t a question of the specific platform as much as it is a question of the extent of intrusion technology has on our lives, and the potential of possible misuse. Now Apple iOS is a very different thing to Android; hence – I am not making any insinuation, or comparison, for one cannot be made. The point is the potential capability of an app to intrude into the most basic aspect of your lives – a smartphone is nowadays an extension of your personal space; intruding into it in such less-obvious ways is not acceptable, and fraught with risks associated with data hacking and privacy loss.
Neither is it a question solely of this particular instance – as a simple google search will reveal, or a few days playing around in the app store for that matter. Even Credit Card information has been hacked more than a few times; thus, data security is one aspect of this. On the Desktop / Laptop versions, viruses have proven their intrusive capability; with their myriad types capable of cracking into the remotest part of your system, and accessing the most protected systems. We have our whole lives, right upto the Banking details, stored on our smartphones – which increases the risk profile of applications on smartphones manifold.

The key issue is “secretly” as the article reveals… meaning, as far as I can interpret, the users had no knowledge of this. And this is from a top and famous brand; which is deeply questionable on more parameters than I care to count. Further, keylogging – recording each keystroke – is eminently feasible; a smartphone is, after all, a software; and an app that can stay resident in memory and record everything secretly is old hat; such apps have been around for longer than I learnt to program! The vital issue is doing something on my device – note that, please – dear app developers and programmers, MY device, without my permission – how stupid, how amoral, how magnificently idiotic and how short-term is that?
The amorality is clear – you are giving yourself the ability to access the personal aspects of someone without his or her knowledge; the rest – stupidity, idiocy and short-termism is less apparent. In the modern world, how long before someone discovers what your app does? Evidence above! And what will the discovery of this do to your brand perception? How many users do you stand to lose? How can a responsible company dream of doing something on privacy without informing the customers? Doing anything along privacy issues is fraught with immense risk; and is not to be taken lightly. Sadly, this is a lesson we in the Smartphone trade have yet to fully absorb, it would seem.

How far is far enough? How far do we go before we, the trade, start to question ourselves, start to ask ourselves where do we draw the line? We don’t need to go too far – just think on long term perspectives and analyse. If my trade is thinking people wont find out – that is not feasible in the long or mid run; people are bound to find out sooner or later. There are people outside companies who are equally good or better than your people, and will reveal, sooner or later. And then – you stand to lose. Remember that. And neither is this limited to just the app permission, or privacy, as my future articles will go into deeper – there is a dire need to improve the user experience, but more of that later. For now – let me close with one question – for how far is far enough?


HT Article – Uber app can secretly record your iPhone screen, security researcher reveals

IMAGE CREDIT – Google Search

Analysing The Telecom Tangle 1 – Systemic Risks

Published June 14, 2017 by vishalvkale

The telecom sector has been in the news of late for all the wrong reasons – rising stress, high debt, loss making or low profitability, mergers, job losses and lot… this sector is one of the high-points of the India Growth story. For this to happen in this showcase industry seems strange from the outside… the reality is, in my opinion, the exact reverse. The seeds of the stress were sown right at the beginning; all hints to this reality were ignored, and by everyone. I do not recall anyone pointing these, self included; though I did come close, to be honest. Yet, when I now look back with my experience garnered since then – there can be no doubt : the seeds of the problems were inherent in the model itself…
It wasn’t, for the most part, deliberate; the decisions that were reached were all rational decisions made by rational people. They may not have been the right ones, as we know from hindsight, but they were decisions reached with a strategy in mind, as we shall see. Also bear in mind that this was a new trade, with no established learnings, norms, procedures, case studies. In essence we were creating them as we went along. And this was the first, most critical point – we went wrong, as we focused on the end-results – new customer acquisitions – in isolation; there should have been equal focus on establishing industry firsts, processes, learnings, sharing of good practices, deep analyses etc. None of this was done for the levels that mattered. The result is there for all to see!
The next error that happened was frankly, stupid in the extreme – I make no bones about it. It was simply inexcusable – and it was simply this : there was never any training imparted to new employees as they came into the company, beyond the perfunctory induction training & some technical training. This is fine for old established trades, with established learnings and processes, and in-built mechanisms at team level. This was a disastrous decision for a new trade with none of these. These first two factors taken together sowed the seeds for disaster, as we shall see how they connected years down the line to create hell.  As a matter of fact, in a brutal indictment of the Telecom & Handset Trades, these two trades stand as the only trades where I have not received extensive training on joining the company. s
Yes- there were other problems, as we shall see. You could make the case that the major issue was the investments are not justified by the market or its size. There may be some truth to this; an analysis of this is, however, not on the menu for this article. That too will be attended to, in the fullness of time. Please bear with me, as the aspect of the quantum of investments into the industry is deep, has many parameters, and ramifications in addition to a massive scandal associated with it from our past. So, let us leave that aside for the moment. My point is to first of all identify the systemic risks in the model of business as it was practiced on the field. This is because systemic issues create insolvable long terms, and become critical only over a long period of time.
So what do you do, once you have invested in the business? For starters – you are stuck with that decision, and then it is upto you to make the best you can out of it. And this is where the second phase of problems started, and right at the beginning. Mobile Telephony was a new concept to India; and the implied assumption might have been that customers don’t need education. This was especially so in the period prior to internet on mobile. You were in a new market, in a new industry, selling a new product. And when Data happened – this fledgling problem became a full-scale crisis…
The focus should have been on developing the market, deepening it; opening new customer lines; new markets; investing in finding new usages and the market sizes of these new usages {think data here}; studying how it can be a game-changer. If any of this happened-  it certainly didn’t percolate to the field levels, and most certainly did not show up in the customer communications. There was little effort to educate the customer, to create the market. The emphasis was always on acquiring new customers. That is by itself a laudable objective; the problem was that this  was the only present objective. By the time the realization sunk in that merely acquiring new customers is useless if they don’t contribute to the bottom and top lines of your company, the rot had set in.  
By this time, unfortunately, the teams were accustomed to getting customers by any means at their disposal – leading to a Brain Drain from the trade as well, as Channel Partners as well as elite employees realized early on that this was wrong, and quit back to their original trades. This was to hurt, and hurt the trade very badly indeed in the time to come. The complete absence of checks and balances to check misuse, {including out-and-out unethical tactics & short sighted approaches to sales} and short term tactics, or profitability over the long term, meant these practices became systemic- giving rise to a fourth systemic risk in the practiced Business Model.
There was never any genuine focus on profitable customer acquisition; this is something I did point out, and in my first few months in the trade, as I could not see the point of having a customer who purchased nothing! That said – I readily admit I did not foresee this getting to be an endemic serious and crippling issue in the trade. When the trade did wake up, the solution proffered was wrong; they started tracking calls, in the sense that sales targets were accepted basis first and second calls and so on. Will 2 or 3 or even 25 calls give you a profitable customer? Obviously not! The only answer should have been to move to revenue targets and per customer revenue, and all along down the line. This was never done, at least not till very late.
The core challenge in this trade is  the nature of the cash flow from Telecom service products, which is a service, and a recurrent revenue source. The employees had no idea of the accounting involved in such a different trade; being from product sales, wherein profitability calculations are far simpler. In this trade, a customer registers a profit only after regular usage of the service over a period of time. This should have been clear right from the start  till the last level of the organization – it wasn’t. I had to educate myself regarding the concept of profitability in such a scenario. The companies did not invest in training employees. It is only after studying the theory myself, including case studies {something laughed at by most salesguys} that I came to the realization of the risk of taking a strategy that did not cater to the risk imposed by the nature of the cash flows that emanated from the Business.
The result of this was a front, second and third line totally disconnected with profitability from operations. In a product sales scenario, so long as the pricing decisions have been & and are properly made, inventories planned out, and an intrinsic demand generated, profit is almost a certainly so long as demand continues to arise, and the scalability of the business attended to. However, this is not the case in Telecom Services, which is a recurrent revenue model, involving very different profit concepts. Unless the profitability is built into the strategies, the processes and the systems at field level – disaster is a foregone conclusion, at least at an industry-wide level.
The inability to ensure sufficient revenue per customer is a problem that has roots in this simple issue; it has, of course, since then grown into gigantic proportions, and with many other, more serious parameters now involved. We shall look at them in later parts of this Telecom Series. The key issue here is, had this been built into the DNA of the organization and the industry at the beginning itself, this would have been hard-coded into the entire company. Working with only  profitable customers would, could and should have been the buzzword for the trade. That it wasn’t the case is a Manifest Truth.
Yes, there are issues of marketing strategies involved – wherein you spread the net wide and then draw it in; was this strategy the best one feasible? Yes, in a fast-growth market, you need to grow in tandem with the Market- But that does not mean you incubate a series of deep systemic risks in your business model for too long, which is what happened! We know now, with the benefit of hindsight, that it clearly wasn’t the best way to go about it. The industry numbers tell the tale. A check was badly needed; had this check – that of profitable customers only – been there at the start, with a proper process and strategy behind it – in all likelihood, the situation would not have been as bad. For Business is always a matter of choices – and in this case, the choice apparently was between scale or profit. No one thought that it was feasible to develop a strategy of Building-Scale-With-Profit. And that was the biggest industry failure.

In the next parts – I shall go deeper into these systemic risks, and identify the way forward now for the trade, basis hard-core case studies from other industries I have since worked in, as well as my extensive reading of Business Literature from across the world. Stay connected! Furthermore, at no point do I deny the external factors that were to buffet this fledgling trade. My point is simply that the internal systemic risks made the entire system more susceptible to external environmental shocks…. 

The Facebook & Fake News Issues

Published April 15, 2017 by vishalvkale

The title of this article just about says it all… The Facebook Issue. This article is coming after a long self-examination and Facebook feed examination, with the explicit purpose of putting Facebook and its contemporary utility in Social Media with relevance to me as an individual. This deep introspective examination has lead to startling revelations to myself, which is what I am attempting place here, with an intent to support my decision to move my Social Media content away from Facebook due to issues arising out of the feed and the interaction that happens on it.
But first, the background. I came onto Facebook as a means to get in daily touch with family, find old friends, and keep connected with them. It then grew into a method of chronicling important events in my life through Photographs & Posts, that I could visit later. Both the above have given excellent results, and shall continue as important aspects of my digital profile with added security features, like sharing in Secret Groups, and strong personal security options.
Facebook then developed into a News Feed, as I liked the home-pages of all the publications I follow; it became an easy way for me to access the news as it happens. This has given superb results as well as  many, many discoveries and learnings through pointed articles. Not only that, it has also lead to my discovering other great Media Vehicles for topics of my interests. This is now becoming a major issue, and the most significant reason for my hunt for other options.
However, there has been a significant change in past few months, maybe an year or two, which has increasingly caused me to wonder how to manage my feed. The problem was it wasn’t as simple as cutting a few people – whose views I may not agree with, but with whom I am close. In other words, I place a greater value on my relationship with them, than disagree with their views. One doesn’t stop interacting just because you don’t agree; true relations thrive despite differences.
The other, bigger problem was the contamination of my feed with POVs which are rather disturbing, things which  are too close to my Value-Belief Matrix for me to ignore. Being mature, one can ignore once, twice, thrice… but there comes a time when your defences drop, and you end up responding to the views, which is not the way forward. However, this is again related to POVs of my circle, one which can be managed by the simple measure of disengaging, like I have done on Politics totally. This has helped preserve some relationships – indeed deepen them.
By far the biggest issue is the scepter of Fake News, which is rampant, and appears regularly on my News Feed. The reason is that Facebook is by far the most popular Social Media Vehicle. This is compounded by the belief systems of my circle, some of whom tend to believe in these fake news articles. What is more disturbing is that even I have fallen to these articles and, on occasion, believed in them – despite my rather excellent repertoire of reading on a wide variety of subjects as documented on my blog quite faithfully over the past 5 years and more. This complex of Fake News + Belief Systems amplifies this Fake News, making it appear all over my News Feed.

While I can disengage with my circle; that is easy to do – it is not so easy to disengage with these articles which keep popping up with disturbing regularity. That increases the risk of I myself falling prey to them exponentially, as quite a few people in my circle also read and circulate them. And that is what is not acceptable to me as a person. My primary usage of Facebook was as a News Feed and as a means to keep in touch with family. Now, there are options available that can fill some of my needs…

Whatsapp has filled a major gap; now it is easier than ever to remain in daily touch far more effectively. That apart, one can access Facebook once every day just to see what is happening with Friends and Family, achieved by cutting off all Social Media Engagements & Likes, which will purify my feed instantaneously. Sure, FF feeds will still appear, but, over time as my Facebook time falls, the quality of my feed will improve automatically, leaving all of us the happier in the bargain.
I cant disengage with Facebook totally; that would be stupid. I am just stating a smarter more strategic usage of the same. My blog still gets good readership from Facebook just to take another exampe, meaning it is valuable resource. All I am saying or rather advocating is the full usage of the other emergent technologies that are coming – like RSS Feeds, Email Subscriptions, Paid Subscriptions to content – and most of all Twitter. A judicious combination of these will fill the gap, give me a relatively clean and pure feed of news of my choice, keep me engaged socially as well.

Reason is that these vehicles are relatively uncontaminated as of now, especially Twitter, which is virgin pure almost. There is a near-total absence of disturbing nonsense as of now on Twitter, as it is not as populated and popular as Facebook. Likewise, RSS Feeds and Email Subscriptions, Paid content can be managed easily by regular monitoring. This will ensure the purity of my news feed, free from Fake News and disturbing content which is increasing by leaps and bounds on Facebook. And if Facebook’s attempt to clean up Fake News works, then maybe, some day, I can start re-engaging in the old fashion… 

Telecom Service Providers – Which Way Forward?

Published April 3, 2017 by vishalvkale

The first Telecom Big Bang has happened- Vodafone & Idea… with this, hope is being expressed that the Telecom trade is now beginning to settle down. I wish I were as sanguine as some of my friends on this point; I fear that this may be the tip of the iceberg. I don’t lay claim that more mergers may happen; though that cannot be ruled out. There have been many exits already. But for this to translate into on-ground sanity will require a  lot more to happen… to understand this, we shall have to glance at the industry statistics in some representative parameters…
There is no easy answer to this ills of the service industry in Telecom– the service industry isn’t in exactly a great shape. Let us look at a few examples to illustrate; Idea has a debt of 49K Cr, and has an ARPU of Rs. 157; Airtel has a debt of about 97K Crore, with an ARPU around 188, just to name two examples. Jio has already notched up 2,01,000 Cr Debt. Usage isnt taking off; the demograhic & income profile of the nation, demographic distribution are major issues, lower prices in the past 6 months notwithstanding.
The investments in this industry are very high indeed -as can be seen from the examples above. And the ARPUs aren’t what they could be, for one. Second, data isn’t returning the value as of now; it is a long haul in that aspect, as again we can see from the network speed and data ARPUs that are coming in. A rough calculation on Reliance Jio for 100 Million customers indicates an ARPU target of Rs. 434/- just to recoup the debt over a period of 10 years. This does not account for Opex and other expenditure, system ugdrades that will be needed in future… Agreed this is a simplistic calculation, and a lot more goes into it – but compare this with current ARPUs and you get the drift!
There are two revenue streams mainly – Data, and Voice. Both are under pressure from various sources. That should indicate a firming in prices; but the on-ground reality is different, as Jio has no option but to increase subscriber base to survive. That means, the other firms are in a catch-22 situation; the industry sorely needs an upward price correction – and yet the recent history belies this, showing a massive downward correction. If they increase prices – they run the risk of irritating a customer who may already be chafing under less than optimal performance. If they decrease prices – they exacerbate the problem… to that you add fresh cash flows and the hope of the future, and you get the scenario.
What the companies will do remains to be seen; but I for one most certainly do not foresee an upward trend in prices. And unless Prices firm up, this industry will continue to face massive pressures from all sides. The core problem remains,  not one company in this trade is able to hold onto a price premium for any length of time whatsoever. And that wont happen unless services improve, which in turn may require a further infusion of capital if the underlying systems are required to be augmented. Add to that the risk of Reliance Jio have a relatively fresh network {though, to be honest, it has issues of its own}
This is not an easy scenario to either analyse, or to take decisions in; several forces are intersecting. First, Jio; second – consolidation,  third – low overall revenue realization per user & fourth – crowded n fully covered market with many competitors. Jio is a threat, but for that threat to be most potent, the call setup has to be regular; that is, the calls should go through. I frequently am not able to connect with Jio numbers, meaning I don’t really have the incentive to switch my primary number to Jio. Add to that the competitive response of other brands, which has lowered prices and/or decreased tariffs. Here again, we see that increased tariffs have not come about!
That does not mean Jio wont succeed; it is only a matter of time before calling issues gets sorted; for all I know, it might already be under implementation. If that does happen – prices will come under more pressure, and go down. The low overall revenue per user means increasing per customer realization {ARPU} is a prerogative for all companies. But the competitive scenario does not allow any scope for that to take place as of now. It is a crowded market; we have over a Billion mobile users. A new entrant, and an already crowded market means there is little strategic space for a price premium.
As far as Data ARPUs are concerned, that is another story entirely; India is a nascent market, and requires a completely different strategic approach, one that builds, deepens and develops market. Sadly, that is not happening; this is one space where companies need to stop competing and come together in a solution mode to deepen the market! In June 2016, around 1.4GB per active smartphone user was the average data consumption; with the data rates being what they are, this is abysmally low. The market needs two divergent strategies for Voice & Data; will this happen? Let us see…
I am aware of reports claiming a manifold increase in both data consumption as well as 3G users in India. I don’t see that happening to that scale; the income and demographic profile of the country does not support such a contention. I don’t see 90% of the population using data regularly – not in the next 5 years, at any rate. Data consumption will decidedly increase; let there be no doubt of that. But the spread and frequency of the same will be as per the income profile spread of the nation; this will require a completely different strategy – one that is not mass, but niche or selective…

3G Vs 4G in Maharashtra and MP

Published February 23, 2017 by vishalvkale

TRAI has been publishing results of 4G speeds of various Telecom Service Providers, as reported by various news media {refer Bibliography of the article}; in the most recent update I saw, as well as the one in January, it was noticeable that most providers were providing speeds starting from 5mbps. This is surprising, and does not fully tally with my experience, tabulated in this article for the past 3 months or so. My speed tests have been done on; I have also downloaded the TRAI App today to crosscheck, and while the results are comparable, there are differences.
 trai main TRAI
4G : The Performance
Before we look at the exact performance as experienced by myself, let us look at some history. The one caveat I place here is that while I have recorded the speeds since Nov-2016, I have not kept a record prior to this. I have used 3G in large parts of Maharashtra where I work, and Indore city my home town. I clearly recall I used to get 3G speeds between 3mbps – 5.5mbps, though the speeds in excess of 4mbps for 3G was only in Mumbai. Let us keep this in the back of our minds as we look at the current performance of 3G and 4G. Reason – read the article from 2014 linked below, wherein I have pasted a test result of 3 year ago, showing a speed of 3.22mbps download. I further recall speeds of 4mbps as well on 3G. 

As can be seen from the chart above, there is a wild variation in speeds; also, please note that I used 3G till 1st January, and switched over to 4G on 2nd January. {Never mind the network brand; let that  be}. The overall 3G speeds I got during this entire period till 1st January was 2.36mbps download and 1.62mbps {all in Maharashtra} upload with a latency of 218.4. {Refer chart below}. After the switch to 4G on my visit to Indore, the experienced speed was 6mbps download and 4.98 mbps upload. In Maharashtra, I got speeds of 4.94mbps and 3.01mbps on average – which was a significant improvement over the 3G speeds I was experiencing.

Legend Explained : 3G —-> 
Total simple average of 3G Speeds
4G —-> Total simple average of 4G speeds Maharshtra + MP; 
4G-M —-> Total simple average of 4G speeds only in Maharashtra

But take a look at Latency : Latency is another element that contributes to network speed. The term latency refers to any of several kinds of delays typically incurred in processing of network data. A so-called low latency network connection is one that experiences small delay times, while a high latency connection suffers from long delays. {From Lifewire}. Latency numbers that we are getting – refer chart above –are upwards of 150 milliseconds on both 3G and 4G networks, as can be seen. The entire data is tabulated in excel for reader reference.

This data was collected over several months, on several networks –  I use two handsets, one a true 4G, one a LTE Band 1, 3, 7, 8 and 20 handset. This was observed on various locations – home, market, office, travel, various cities, and at various times as can be seen from the complete data set enclosed at the end of the article. I used three networks – 3G on two providers, and 4G on two providers; as well as broadband on 1 provider. In toto, I used 4 service providers while collating this data.

The Analysis
There is a significant improvement with the advent of 4G networks in my experience – the numbers are silent proof of that. However, the user experience is what matters; sadly, this cannot be quantified so easily. The actual  user experience, to be completely blunt, is that I could not notice a significant usage improvement in site loading or other internet usage, as compared to 3G. To understand this deeper, we will need to understand my internet usage.

I used the internet for video streaming quite extensively; I used email, games, net surfing various sites like news sites, google searching, recipe and cooking sites, LinkedIn, Blogging sites, telecom sites etc. I also downloaded videos, and my total data usage was in excess of 10-15GB per month in each of the three months. 

I could not notice any clear advantage that I achieved, for the most part. In Video Streaming, I noticed no difference whatosoever, as in other usages, including all. The only advantage I noticed was in Video Downloading, and that too wasn’t blinding fast; there was a difference, an improvement, but it was very small. But it was there.

And therein lies the key; 4G and 3G are products; Companies & an industry depends on them. If the customer isn’t feeling the difference, you have a major potential problem on your hands. As things currently stand, no one in the industry at levels that matters is paying any attention to this. The key lies in the data – high latency speeds, wild variation in actual speed experienced by the customer, and actual speeds around 5-6mbps average – which is only slightly higher than what 3G used to deliver before the advent of 4G networks in India, at least in the bigger cities. 

You sell a product or a service – your core focus should not be the fund flow, regardless of the health of your balance sheet. The corporate world abounds with case studies of companies that succeeded by focussing on the customer experience {I present one such case study next month – Google; stay connected with my blog}. This is what is required – focus not on activations / Churn / recharges, but on specifically the customer experience; given that the delivered result is not upto the mark. In the next article, we shall go deeper into this, examining specific usage examples  and deeper industry issues, identify specific usage patterns and issues at customer level, and chart a way forward. Let this suffice for now. 

There is no easy answer – the service industry isn’t in exactly a great shape. Idea has a debt of 49K Cr, and has an ARPU of Rs. 157; Airtel has a debt of about 97K Crore, with an ARPU around 188, just to name two examples. Jio has already notched up 2,01,000 Cr Debt. Usage isnt taking off; the demograhic & income profile of the nation, demographic distribution are major issues, lower prices in the past 6 months notwithstanding. 

The reasons for this situation are diverse – but these service providers need to understand that unless they improve the service quality to the customers, there is a near-certainty of rising Churn, as customers will try out newer options, and switch providers, much like I did. I ask the same question that I did 3 years ago – where is the market? {Internet and Digital Media – Big Hurdles} Show me the market! 

And if Jio manages to give 10mbps+ speeds  regularly, this could spell big trouble for the incumbents. As we saw in the Jio Business Model Analysis, it doesnt have a choice but to succeed. That is why, at least in the major pockets, the service providers need to look at their core product offering; they cannot afford laxity on this part… Starting day before yesterday! 

References and Bibliography
10)    Bharti Airtel Q3 net dips 54% on Jio woes

Data used for the analysis : 

Smartphones – India Vs China Markets

Published January 26, 2017 by vishalvkale

Recently, we saw a very interesting, and for Smartphone and Telecom trade pundits and employees, monumental occurring – a recent report of marketshare showing that the top 5 brands in the Indian Smartphone market are not Indian. On top of this is a constant lament by Media and Telecomists {to coin a new term} alike, that Indian Handsets Brands are not making it; that Indian  manufacturing is not picking up in this industry.
Let us try and place things in perspective first, before we try and understand what can be done to improve the situation; or, indeed, whether it can be improved. In this article, I focus only on the perspective, and an overall market analysis of the two markets in general terms as well as specifically Teleocm / Device terms. After that perspective, I then introduce the basics of the competitive scenario. The reason for that is you need to understand the two markets and their difference to make a meaningful comparison, as well as figure out the way forward.
Let us get something straight : we cannot compete against China as things currently stand. This isn’t pessimistic thinking, but a simple statement of facts. You cannot compare chalk and cheese, or as some like to state, apples and oranges. India is a low-income market, while China is approaching middle income levels. Indian Per Capita Income is dwarfed by the Chinese income. As of April 2015, Nominal GDP per capita of China was $11449, while India was at $2672. If you take PPP, even then we are dwarfed : $20004 vs $9327. There is simply no comparison feasible between two markets with such a comparative economic scenario; we are doing ourselves a massive disservice by comparing
Be it Steel Industry or Handset Industry, India is dwarfed in numbers, and this is something that is not going to change anytime soon. The markets as well as the manufacturing scenarios are completely different; China is a nearly 100 Billion dollar Smartphone market, with production in excess of 600 Million units in 2015, although 2016 may see a slight dip. Exports account for more than 2/3rds of these numbers – even so, you are looking at numbers in excess of 140 Million Handsets in 2015, which though comparable to India’s 100 Million plus/minus a few, is still a larger market. Of greater relevance is the footprint of Chinese Exports, which are 450 Million plus – and that is one hell of a lot.
Moving on, the higher numbers in terms of dollars for the Chinese gives them enormous financial clout, flexibility and strength to innovate. Also note that there is a price differential of a full 100-plus dollars in the average sale price of a smartphone in India vs China. That means, China is a more mature Smartphone market than India. Three, Smartphone penetration in China is also much higher, in excess of 68%  – there were 913 Million Smartphones in China in 2015, and 691 Million unique users. China had 208 Million Smartphone users way back in 2012! In & by 2016,  50% of China’s population had internet connectivity – a figure we are nowhere near. The internet advertising market in China is 3 times India’s.
I could go on; but I think the generic and the industry numbers quoted above or indicated above give a reasonably good feel of the two markets – India vs China. It stands to reason that the Chinese players will be more mature, with a better handle & understanding of the technology involved, with deeper pockets and a larger range of products. They are also ahead on the learning curve, and have been growing right in step with the technological developments in the trade; we are only now catching up in terms of keeping abreast in the technological space.
2010-2012 were the critical years for the Smartphone trade, with a rapid evolution in technology, a massive churning in the competitive space. These two factors combined to heat up the smartphone market from 2008-9 onwards, give or take an year. And the numbers tell us that the Chinese market was following closely on the heels of these developments; thus, making any India-China comparison an exercise in futility, and despondency if we are trying to outcompete them playing on their turf!
They have the money and the deep pockets; they have the manufacturing investments; they have the infrastructure; they have the competence in the industry in terms of economies of scale and captive markets as well as a much wider experience in the technology; they have the technology; they have the processes; all of these add up to a significant advantage. There is no point in beating around the bush; we cant beat them– so long as we are playing to their strengths. This does not mean we cant compete; our competitive response has to be formulated basis our market realities. This is what I look at in the next article, wherein I spell out the ground realities of the smartphone market and consumer in India
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JIO – An Analysis of Prospects and Challenges

Published January 15, 2017 by vishalvkale

JIO – An Analysis of Prospects and Challenges
A common refrain, question, discussion point among at least us Telecom Professionals {those outside Jio at least} centers around what it is doing, what it plans to do, what disruptive impact it will have on services as well as devices and whether it will achieve whatever objectives it has set out for itself. My humble submission here is one simple statement: the key question is not among the points being pondered above; the real question is whether it, or indeed we as a nation, can afford it to fail? Indeed, does Jio have a choice in the matter except do what it is doing?
Before we move into details, just look at the numbers involved: as per Telecomtalk & Economic Times articles dated January the 14th 2017, it has infused 1,71,000 Crore into this venture; another 30,000 Crore is being planned. That brings the investments to 2,01,000 Crore. Its current subscriber base is between 67-73 Million Customers as on date, and is expected to touch 100 Million subscribers as per the news articles above. That means Jio will have to rake in 600 Rupees per month per customer just to recoup this {what I think is} Capex assuming a payback period of 10 years for the same. This does not account for Opex and other expenditure, system ugdrades that will be needed in future…
But, increase this subscriber base to 100 Million, and the required ARPU rough estimate falls drastically to Rs. 434. At 150 Million, this falls even further to a much more realizable and realistic 289 Rupees, which is far nearer to what the current ARPUs are today. Thus, it doesn’t have a choice… and neither do we.
Rather than worry about the disruption – and there has been, & will continue to be, disruption – let us welcome it. It is a harbinger of better services to the customers. Yes – for the industry and the employees, it does mean a very challenging and yet rewarding time; yes – it does involve, pain in the short term, perhaps medium term for the employees into this industry as well as for some companies. But for the customer, the future is exceedingly bright, as this disruption and ensuing competition will not just depress prices {sadly}, but also, hopefully, unlock innovation and development of
Disruption is not always bad, though it is always and nearly without exception, painful. It forces industries to introspect, set things in order, cut the wastage and the incorrect steps, and move forward. Added to this is the impetus it gives on giving a better end-customer experience. Let us take the Jio example. I have not used Jio services, but have used others, and on 3 handsets. The experience is very revealing, if you consider from a customer usage experience
I have tested the 4G as well as 3G speeds for the past 2 odd years nearly half-a-dozen cities in Western India as well as on journeys. The average 4G speed I register is around 5mbps, and highest I have ever experienced is 14mbps {once only} and the lowest 4mbps. Now these speeds are 3G speeds or 3.75G speeds; 4G experience should be at least 7-8mbps, ideally or optimally above 10mbps for a superb 4G experience, perhaps higher. Let us not get too specific or technical here.
Now the entry of Jio will cause, or rather force the competitors to invest in upgrading their networks in order that the customer gets a superior experience; they need to do this – as indeed they already are beginning to do. This is the first positive impact of competition induced disruption. Second, it will expose customers to a superior service along with all its advantages, unlock greater uses and scope of usage, open up new usage avenues that the greater speeds will bring,. It will also further develop other nascent markets – like the online video and content space, as an excellent example. As market size increases – as seen above – prices crash, further creating new market space…
This brings us to the core ground reality+: currently, 4G phones are available starting around 4K; how many customers can afford that range, given our per capita income? How do you pull in new customers? You have to give a value offering; thus – the focus on a 4G experience at cheaper rates of devices. This will open new markets, as well as improve viability for Jio.
In one word – it has no choice either. Both in services and in devices, there is a felt need for new innovative thinking in terms of a variety of areas. Companies, though currently hamstrung due to earnings issues, will need to find the space and the capital to innovate and improve their offerings. Fact of the matter is neither wing of this industry is making bushels of money – services or devices. And I order to maximize stakeholder values, they need to solve this conundrum – Jio or no Jio… namely, how to get more customers into the 4G fold….