Airtel, Vodafone and Idea fear Reliance Jio’s tremendous voice capacity

reliancejioReliance Jio, India’s latest telecom company, has more voice capacity than Bharti Airtel, Idea Cellular and Vodafone combined and could unleash this tremendous capacity on the others, going by the latest submission by the Cellular Operators’ Association of India.

According to a report in the Economic Times, the COAI has written to Nripendra Misra, principal secretary at the Prime Minister’s office, claiming that its member operators do not have the capacity to carry the voice calls originating from Reliance Jio.

COAI said the huge amount of calls coming from 100 mln Reliance Jio users “will choke and financially destroy the competition” as they won’t be able to cope with the traffic.

WHAT DOES THIS MEAN?

The statement seems to imply that Jio currently has total voice capacity that is several times bigger than the carrying capacity of its rivals.

For example, Airtel, Vodafone and Idea have a total of about 550 mln users on their networks. These subscribers make or receive an average of 13 minutes of voice calls per day.

In other words, these 55 cr users currently generate or receive about 220 billion minutes per month, out of which about 180 bln minutes can be assumed to be generated by their own customers and the remaining from smaller operators like BSNL and Tata DoCoMo. Since they already carry about 220 bln minutes, their total capacity (incoming + outgoing) can be assumed to be 350 bln minutes or so.

The worry of the competitors seem to be that with Jio’s launch, the incoming traffic on their combined networks — which is probably around 40 bln minutes per month now — could rise to 300 or even 400 bln minutes, potentially overwhelming their networks, which can be estimated to have a capacity of only around 350 bln.

At the same time that this massive incoming traffic hits them, these operators will get some relief as the number of outgoing calls made by their customers will drop as people wil be using Jio SIMs for outging calls.

Assuming that the traffic from their own customers drops from to about 90 bln from about 180 bln minutes per month, this leaves them with an incoming traffic capacity of around 260 bln minutes (350 minus 90), out of which about 220 bln can be used up by Jio subscribers’ incoming calls (remaining for BSNL, Tata etc).

This would imply that, by COAI’s reasoning, Jio’s 100 mln subscribers could end up making about 220 bln or more of minutes of calls to other networks — or an average of 2,200 minutes per month.

Therefore, together with Jio-to-Jio calls, an average Jio customer can be expected to make around 3000-4000 minutes of calls per month or 100-133 minutes (2 hours) of outgoing calls per day — compared to about 6 minutes for other networks at present.
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