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Will Reliance Jio shake Net Neutrality?

columns Updated: Jan 04, 2016 02:21 IST
N Madhavan
Reliance Jio

The arrival of 4G services in the country means that the elder Ambani jumps into a mature market in which connectivity is not the real issue, but how the overall business model works.(PTI Photo)

India witnessed two significant milestones in the history of its telecom revolution last week. The first was the number of mobile connections in India, which crossed one billion. To be sure, this does not mean one billion people are connected, but even half that number is significant enough by any global standards.

The second event was the launch of services by Mukesh Ambani-led Reliance Jio -- involving the entry of a giant as a late entrant in a fairly crowded market. The launch of the service is only for Reliance group employees for starters. We can expect visible fireworks circa April when the bigger game gets going. The arrival of 4G services in the country means that the elder Ambani jumps into a mature market in which connectivity is not the real issue, but how the overall business model works.

As a late entrant, Jio, parented by Reliance Industries Ltd, is at a disadvantage, but every sensible watcher of RIL knows to expect something else. For one, Reliance will offer its own Lyf brand handsets. To this, we may add that Reliance is already a player in the retail industry with its RelianceFresh and Reliance Digital brands.

About 15 years ago, the Ambanis had invested in Fabmart (which later became Fabmall and folded into IndiaPlaza.com). It was a doddering e-tailer ahead of its times, and signalled Ambani’s interest in e-commerce. Ambani, in his individual capacity, is also an investor in Tally Solutions, which supplies accounting software to thousands of small business establishments in India. Ambani is also a controlling investor in Network 18, a media conglomeration with interests in news and entertainment.

So, I would expect a grand collaboration, a Japanese-style “keiretsu” (a group of enterprises with interconnected relationships and/or shareholdings) in which retail, media and enterprise software work in tandem with a new-fangled 4G service. The complexity of the network needs to be watched.

A tantalising question: will this grouping violate the principles of Net Neutrality which is meant to separate content, commerce and carriage? Regulation-watchers, already tracking Facebook’s Free Basics programme to see if the social networking giant is colluding with telecom operators, may see a fresh episode in the drama.

Meanwhile, younger brother Anil Ambani’s Reliance Communications, separated in a division of family assets, is trying to tie the knot with Aircel (a Maxis brand) and MTS (Sistema Shyam)in a year that is bound to see more of telecom mergers, acquisitions and partnerships.

Will the Ambani brothers eventually edge closer, as some speculate they might?

From all indicaitons, the year 2016 is going to be the year of coming of age for India’s telecom companies.