I’m sorry, but the facts are that india has (had) a remarkable telecom sector at inception.
The reason why I say this is because it’s VERY easy for the market structure to get flubbed and become only 2 or 3 firms which “compete”. (See america- invented the Internet, didn’t get the market right.)
India has some of the lowest, if not the lowest ARPUs in the world. The Indian telecom sector invented the 0 cost phone call (you give a missed call to a phone number, people call you back with offers)
Market structure is so important - you see it how the nascent Value added services market was destroyed by Indian telcos.
Back in the day one new area of innovation was VAS- but telcos were able to dictate the profit spread to VAS firms once they realized VAS was profitable. This killed the industry.
Telecoms tend towards rent seeking behavior (American telecoms say “this is the best service we can provide”, until google fibre turns up and magically those fibre installations get executed)
Data prices being high ignores the cost of calls and of infra issues the telcos were facing.
The spectrum auctions and the subsequent Supreme Court verdict destroyed our market - and there just isn’t the kind of market and economic acumen+Political power mix which will fix the market.
So they didn't cartelize, and only recently after the insane noise over the 3g auction which fizzled out, did we lose that market.
We've now essentially cartelized (all remaining firms raised rates in tandem), and the few players left are also teetering with Vodafone considering leaving.
This means that we will likely see Jio, and Airtel left, with BSNL constantly being denuded.
Their profits are terrible, and the debt burden because of arrears means they need a rescue, or the future situation will become - impressively - even worse.
You can check what ARPU and per individual costs were in the world comapred to India historically for calls. India has always been one of the cheapest places to have calls, and one of the lowest ARPU in any market - and it managed to get multiple mobile phones per person and has a thriving telecom market.
The 0 cost phone call is an example of the market working well - people at the bottom of the pyramid have no money to spend, and given what ARPU was, expecting even lower prices is the stuff of fantasies.
This is innovation at work. I don't know what people are expecting when what they had was already impressive for the time.
High-capital industries like telecom generally end up in oligopolies making if left unchecked. Before Jio entered and disrupted it, India's telecom market was also very consumer-hostile and gave terrible prices and service despite being one of the countries that had adopted both GSM and CDMA.
For US it might also be the case that WiFi hotspots are everywhere and mobile data isn't used as much.
> In case people aren't aware, the Indian mobile sector was one of the cheapest and most pioneering markets of its time.
Not sure in what way you mean pioneering but it was definitely not the cheapest! Everything cost money. Text messages, phone calls, data, roaming between states, out-of-state phone calls. Everything. All this in addition to the cost of the cell phone itself - no bundled offers with phone like AT&T did with Apple in the US.
Furthermore, you could get away with a connection from private companies like Airtel and Vodafone if you lived in a big city. Rural coverage by these players was notoriously bad. The only substitute available was the one provided by the government itself - BSNL - which got a reputation of having the "best coverage".
All that changed dramatically when Reliance came up with a Rs.500 phone which included a connection with free unlimited calls between two Reliance phones. That was the beginning of true mass adoption of cell phones in India.
> People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
This is not an example of a model working well. This is an example of a workaround to mitigate high call costs.
Lots of factors at play here. Till a few months ago, India didn't even have a competition commission. We have no anti-trust laws.
You also have to understand the history of telecom in India, especially the Value-Added-Services on mobile. They killed startups ( http://rashmiranjanpadhy.com/2015/04/12/airtel-kills-startup... ), they activated services without users' consent and so on. Can you imagine how big this fraud was in India where 40% of the people are not even literate? It was plain and simple fraud.
Everyone and his uncle learned to curse the telcos in that era. Now they're coming for the web, disparagingly calling it "Over-The-Top services".
India has (had?) a monopoly on telecommunications. My company couldn’t send voip phones to our Indian employees like we do for employees everywhere else.
Those are not the competitive days, those are pretty much classic examples of the chilling effect on our market after the SC forcing a re-auction.
An auction exposes market pricing information which was hidden before.
In case people aren't aware, the Indian mobile sector was one of the cheapest and most pioneering markets of its time.
People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
Stuff that was in sharp contrast to the mobile plans and service packs around the world.
While people argue about data, they forget how hard it is to set up the infrastructure and the massive boost forward simple phone calls were for people.
That was the era I am talking about, not post the SC verdict.
The amount of abuse that the American consumer takes from telecos - Incoming SMS charges, incoming call charges, ridiculous post-paid rates, the colour of your iPhone tied to your carrier contract - beggars belief. You guys are still living under the delusion that the invisible hand of the free market will protect you, but what you don't realize is that the invisible hand is too busy in the pants of AT&T and Verizon to care about you.
There are a lot of things wrong with India but the telecom industry here(at least up to around 2010) should be a showcase for regulation done right. Dirt cheap sms rates(around .001 usd), 3G rates, fixed monthly subscription charge for roaming, tower-sharing (multiple mobile operators share a cellular tower), number-porting, second-pulse billing,and around 10-11 operators to choose from.
Sure, the Telecom Regulatory Authority of India probably squeezed a little to hard and the 2G and 3G corruption scandals that followed reversed some of those trends to an extent; But the situation is still much better than in the US.
Market forces are slow in some markets. It's very hard to get started in the telecom industry in india, so you pave the way for an oppressive ologopoly instead. There's no reason to believe that Romania's telecom industry and market is comparable to that of India.
Basic telecommunications infrastructure in India is heavily regulated by a government that once actually proposed banning all VoIP services apart from the ones they offer at premium prices. Thanks to a high degree of corruption and bureaucracy, it is near impossible to enter the ISP game unless you have serious monetary or political clout. Simply starting a competing ISP is not really feasible.
Isn't India data cheap because one person who owns one giant telecom decided he wanted data to be cheap in India? Similar to the original Google Fiber philosophy.
In India this was the situation before 2016. Calling was expensive, data was a luxury. All telcos were rent seeking parasites who just wanted to extract as much money from their customers as possible while providing the bare minimum service.
A small company called JIO realised that people actually like it when they are not being abused this way. It launched a cheap service with a very simple payment model. Fast forward 5 years and all the other telcos are bankrupt or nearly there. Data is dirt cheap, calling is free. Even the remaining telcos have switched to the JIO model (and pricing)
For one, India's tech growth (even if it is in outsourcing) has been because it escaped the then watchers. They are more likely to build rules which help close partners to the government, or people who spend the time to help the government formulate their plans (Like facebook is).
Secondly, even in America, the one thing which is pushing adoption of better speeds in cities is the availability of a competitor like Google Fibre.
India had a lot more competition, but the recent Supreme Court judgement cancelled a lot of licenses which were given out, and many players were forced to requote for licenses in their circles.
As you can imagine, many smaller players were completely cut out, and today most of the market share for mobile telephony is distributed between 4 players.
Iteration can mean iteration of incrementally more regulatory capture each time.
For one, most major telecoms have folded beside airtel. Rest of them are shrinking or have merged.
Jio is a short term gain over long term problems most likely as they have started to creep up, internet speeds are once again abysmal, censorship and surveillance (why do jio apps collect so much data and need so many permissions?)
Jio is when you can cannibalize an entire industry in a few years just because you have money to give out for free until everyone switches. I think India is pretty great for this kind of plans as you can see, they are quick to switch and have no loyalty to anything. If you can kill out all the competitors before they can compete, you win.
Arguably, jio has improved many things and is a net positive so far but not for long enough. I won't claim anything on the specifics of government having connections with jio.
The reason why I say this is because it’s VERY easy for the market structure to get flubbed and become only 2 or 3 firms which “compete”. (See america- invented the Internet, didn’t get the market right.)
India has some of the lowest, if not the lowest ARPUs in the world. The Indian telecom sector invented the 0 cost phone call (you give a missed call to a phone number, people call you back with offers)
Market structure is so important - you see it how the nascent Value added services market was destroyed by Indian telcos.
Back in the day one new area of innovation was VAS- but telcos were able to dictate the profit spread to VAS firms once they realized VAS was profitable. This killed the industry.
Telecoms tend towards rent seeking behavior (American telecoms say “this is the best service we can provide”, until google fibre turns up and magically those fibre installations get executed)
Data prices being high ignores the cost of calls and of infra issues the telcos were facing.
The spectrum auctions and the subsequent Supreme Court verdict destroyed our market - and there just isn’t the kind of market and economic acumen+Political power mix which will fix the market.
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