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Reliance Jio’s Voice over LTE: reality or myth in real India beyond the lobby of legacy versus the new

Vishal Krishna
posted on 1st November 2016
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Reliance Jio has been pushing Voice over Long-Term Evolution (VoLTE) for some time. Now whether VoLTE is available across the country is another debate. But 95 percent of the country is still on prepaid plans and 75 percent (around 600 million people) are in rural regions, using 2G networks. So there is no way that VoLTE is going to be big over the next one year. However, it has the potential to be huge over the next decade, especially since smartphone penetration would have reached more than 600 million Indians.

Here is why VoLTE will not fly yet:

  • According to TRAI 95 percent of India is on 2G.

  • It will take at least a decade for VoLTE to have scale.

  • VoLTE networks will reach 600,000 rural towns in 15 years.

  • VoLTE based calls will not have clarity when consumer makes calls to ordinary phones.

  • Only top 20 cities will enable VoLTE networks.

  • The current narrative is only in the realm of lobbying to push VoLTE phones.

Opportunities-with-Jio

Only around 30 million use 4GLTE on a postpaid basis. Even there, not every phone uses VoLTE. But that's where Reliance Jio is pushing people to buy phones that support VoLTE so that the amount paid to voice calls drops, therefore adding to their savings. No one knows what the savings could be because you still have to use legacy voice networks for people with older phones and older subscription plans.

Reports indicate that around 20 million people have signed up with Jio and its three-month free data plan.

But does Reliance Industries have the ability to manage network functions virtualisation (NFV) and software-defined networking (SDN), the core architecture for the future of telecom networks? “With new network technology they have to ensure great quality of service. We need to understand how effectively they use the spectrum to offer robust services, and cracking consumer psychology in India is going to be an opportunity and a challenge,” says Amresh Nandan, Research Director, Gartner Inc.

According to a recent report by Counterpoint Research, eight out of every 10 LTE capable smartphones shipped were VoLTE-based. Globally, around 300 million smartphones were shipped in the July and September quarter. While the narrative about rural towns buying VoLTE smartphones to use Jio's networks sounds very juicy, it is a reality that these smart networks are not in rural towns and the majority of India is on prepaid 2G plans.

Still a narrative

It would be interesting to study user behaviour in smaller towns and prepare organisations to serve these new consumers with VoLTE services. A farmer using VoLTE would be interested in price discovery and payment mechanisms. More than that, battery life is very important because there is no electricity in villages and towns around the clock. That said, the network will grow, and over the decade, along with smartphone purchases, the network operators have to figure out new-age services rather than saying that VoLTE will drop prices of voice calls, which is a fact.

They need to study how users will eventually adapt to consuming services on new-age networks. This research today will be limited to the city-based consumer who will use a lot of data. The narrative of championing the small-towners makes for good storytelling today. But executing new-age services in financial technologies and reaching information at speed to those who don't have access to aspiration is something that has not been thought through by any corporation as yet.

"Our drones capture information on SD cards and we don't want to use LTE to transfer information to farmers. It is not cost-effective in rural regions," say Kunal Sharma and Pranav Manpuria, founders of V DroneAgro, serving farmers in Bengaluru.

There are lessons to be learnt by operators. They can learn from the success of sub-one-ton truck manufacturers and FMCG companies who have understood the needs of the small towns and launched services that change their lives. Sub-one trucks help farmers ship their produce on their own without having to depend on aggregators. FMCG companies figured out the need to have small pack sizes. This is where the prepaid era of networks changed the way mobile penetrated India. Now how will modern networks change data consumption? Only upgrading from legacy will, and like everything else, we are still five years away from achieving that change. "This is where Jio will have an impact on other telcos in the short run," says Sanchit Vir Gogia, CEO of Greyhound Research.

Maybe it’s time we treat the smartphone and the network as a foundation. Now what rural people do with smartphones is something all operators including Jio must figure out rather than focus on voice over legacy and voice over modern networks.

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