Reliance Jio Soft Launches New 4G Service in India

Reliance Jio has begun what we might call a soft launch of its 4G mobile service in India, now selling phones and subscriptions from its website, after a period of employee testing and employee referrals.

Many expect a full commercial launch late in 2016.

The key question, of course, is how Reliance Jio might reshape the Indian mobile market. Some believe Reliance Jio will vault into the top ranks of the market within a few years, perhaps emerging as the number-three provider in the whole market, in terms of installed base.

Analysts at Macquarie Research expect Reliance Jio will gain at least 15 percent market share over four years.  

Macquarie predicts Idea Cellular will lose as much as seven percent of its market share. If that happens, it is likely Reliance Jio will vault into the top ranks of mobile service providers in India, trailing only Bharti Airtel and Vodafone India, while knocking Idea Cellular out of the number-three spot.

Will "Computing" Model Disrupt "Telecommunications" Leadership for the First Time?

Up to this point, the market dynamics of the "telecommunications" business have had a profoundly different pattern from dynamics of the computing industry.

To summarize at a high level, computing has gone through clear eras, with clear shift of market leadership. That, arguably, has not happened in "telecommunications." 

But one has to wonder whether that will remain the case, as the "access" function, and separation of apps from access, begin to morph. Already, in some markets, incumbent market share has dropped by more than half. In a few market segments, incumbents no longer are the leaders. 

In the U.S. market, cable TV providers already are the leading providers of high speed access services, for example. 

Some board members at Microsoft, though happy about Microsoft’s shift to cloud services, worry that the market could shift suddenly. 

Chairman John Thompson, for example, is said to recount what fellow director Chuck Noski, a former chief financial officer of AT&T, has said about the suddenness of technology-driven (and end user value perception) market shifts. 

Noski is said to have “watched the telecom carrier’s traditional wireline business evaporate in just three years as the world shifted to mobile.”

At the same time, one has to be mindful of history. So far, in the history of the computing industry, not one firm that has dominated the industry in one era has retained that leadership in the succeeding era. None.

Apple might be thought an exception, to the extent that it never “lead” the market during the PC era, even though it surged to prominence in the smartphone era.

But even for Apple, the issue is what comes next, in the coming era of computing. 

Historically, we have not seen similarly clear “eras” in the telecommunications business, even if key switch and access technologies have evolved. But one has to wonder--as “access” becomes part of the Internet ecosystem--whether we might see a huge break from the traditional pattern. 

The implications will be painfully clear, if so: tier-one telcos will not be the leaders of the access business in the next era, if the computing model applies. The leaders of every public company always face a huge problem: they must be truthful about prospects for their businesses. 

At the same time, they must protect the equity value of their firms. The two requirements can conflict, especially in rapidly-changing markets.

EU Tries to Balance Disruption, Incumbent Protection

A new EU policy framework document strikes a "balanced" approach to regulating new ride-sharing or lodging-sharing services. That stance suggests regulators think the economic benefits warrant the risk of some economic disruption.

When one sees the phrase “balanced and sustainable” as an approach to regulatory policy, it means policymakers are trying to encourage innovation, while also maintaining some regulations.

A new European Union  document on the “collaborative economy” that underpins ride sharing, room sharing and other forms of what many call “sharing” shows an effort to allow innovation that might harm the interests of established economic interests.

“The success of collaborative platforms are at times challenging for existing market operators and practices,” the EU policy document says, acknowledging the potential for economic damage to existing businesses.

Significantly, the suggested framework calls for what some would call a relative “light touch” to regulations.

That has not always been the approach--in Europe or elsewhere--to new developments in the economy that are potentially disruptive.

All too often, regulators have applied legacy rules to new technologies and business models that have the effect of protecting incumbents and harming challengers.

Application of legacy common carrier rules to over the top voice or messaging services provide clear examples.

“The collaborative economy is part of the digital economy but also overlaps with other economic sectors, mainly those providing services,” a supporting document says. The point is that the new businesses are significant enough in potential size that banning the new business models is deemed unwise.

Collaborative platforms operating in five key sectors of the collaborative economy generated revenues of EUR 3.6 billion in 2015 in the EU.18 In terms of gross revenues flowing to providers and platforms, the EU says.

it is estimated that collaborative platforms facilitated EUR 28 billion of transactions in 2015 in the EU.

The largest collaborative economy sector by revenue is the peer-to-peer transportation sector, which includes ridesharing and carsharing.

The peer-to-peer accommodation sector is the largest on the basis of commerce generated.

Communication Preferences Illustrate Shift of Value in Communications

It is impressionistic, but look at how U.S. consumers rank their communication preferences. Asked which channels are most popular with generations of consumers, contact center professionals say 90 percent of “Silent Generation” consumers prefer the telephone.

For Millennials, Internet web chat and social media are the preferred channels, collectively representing 48 percent of “first choice” votes.

Those behaviors and preferences have something to do with prospects for the telecom industry, in the sense that voice was a vertically-integrated, “owned” form of communication. Web chat and social media are the province of third party, over the top app providers.

source: KPCB

Generational Differences in Role of Technology

There is an argument that psychographics are more important than demographics. In other words, it often is argued, a consumer’s personality, values, opinions, attitudes, interests and lifestyles matter more than where a consumer lives, how much money a consumer makes, education attainment or age.

In actuality, both probably matter to some extent, though targeting relies more on psychographics than demographics.

Still, we might note that generations emerge in different technology contexts. The “Silent” generation grew up in the era of radio. The “Baby Boomers” grew up in the era of television. “Gen X” grew up in the personal computer era. “Millennials” grew up in the Internet and mobile era.

source: KPCB

Smartphones Cost as Little as 0.6% of Per-Capita GNI in Japan; 48% in Ethiopia

The cost of smartphones is very high in many developing nations, measured as a percentage of gross national income per person, according to KCPB partner Mary Meeker.

Where in Japan a smartphone costs about 0.6 percent of per-capita GNI, a smartphone can cost as much as 48 percent of per-person GNI in Ethiopia.

In Vietnam a smartphone costs 15 percent of per-capita GNI; in India 10 percent of per-person GNI. In other Southeast Asian countries, a smartphone costs six percent of per-person GNI in Indonesia, or five percent in the Philippines.

source: KPCB

India Internet Access Use Growing at 40% Annually

India Internet adoption is growing at a 40-percent rate, according to Mary Meeker's latest "Internet Trends" presentation. 

2016 Internet Trends Report from Kleiner Perkins Caufield & Byers