Reliance Jio’s disruptive entry in September 2016 led to $ 10 billion in annual savings for consumers and will expand India’s per capita GDP by about 5.65 %, says a report.
Jio has made data accessible and affordable, with average prices per GB dropping to ₹10 from ₹152, bringing the internet within the reach of a larger proportion.
Such a drastic reduction in data prices has also allowed newer segments of society to use and experience it for the first time.
“As per our calculations, even the most conservative estimate shows that due to Jio’s entry, the annual financial savings to the consumers would be to the tune of $ 10 billion,” said the report by Institute for Competitiveness(IFC).
Through widespread network effects, Jio’s entry would boost India’s GDP by about 5.65 %, if everything else in the economy remains constant.
The effect on GDP growth due to higher internet penetration will not just be a contribution of the telecom sector but also the various externalities that arise out of the internet economy, it said.
IFC analysed Jio’s entry to measure the impact of internet penetration on economic growth. The model used data from 18 states from 2004-14 and showed that a 10 % increase in internet penetration
“Since Jio’s entry into the Indian telecom markets on September 2016, the face of the industry has not remained the same. It changed the basis of competition by offering free lifetime calling to its consumers in an industry that derived 75 % of its revenue from voice,” the report said.
Within six months of Jio’s launch, India became the highest mobile data user in the world consuming over 1 billion GB data every month.
Stating that before Jio’s entry there were hardly many avenues where such high levels of data could be expended by a consumer, the report said Jio offers its consumers a wide bouquet of digital applications that address a variety of consumer needs.
(With PTI inputs)