Reliance Jio is expected to further disrupt this market, after launching a low-priced feature phone supporting 4G services. This would give internet access to over 500 million users, who at present use mobile phones only to make calls. Feature phone users in India have remained restricted to 2G networks compared to their counterparts on 3G and 4G networks due to absence of devices. The report noted a 40 per cent drop in mobile tariffs in the past year, especially since Jio’s launch. While mobile data usage doubled to 1.3 GB (gigabytes) per user per month between 2013 and 2017, it is expected to reach 2.3 GB per user by 2022 before the usage stabilises, noted the report.
Although, mobile tariffs will drop significantly, they will remain at least 80 per cent more expensive than WiFi data. New subscription from rural areas, where data use is likely to be low, might lead to a slowdown in mobile data consumption. WiFi data use constitutes less than 20 per cent of total use in the country.
“The cost of offering services on WiFi is just a fifth of mobile, and speeds are significantly faster, too. We expect a sharp increase in WiFi hotspots over the next three-five years. This can be a drag on mobile data growth once penetration growth plateaus,” said Prasad Koparkar, senior director, CRISIL Research.