Telcos Offer Content to Bolster 5G Growth
India's telecom story is facing up to the harsh reality of slow growth in data consumption and all major service providers are eyeing content to bolster demand
The declining growth rates in data consumption has gotten the telecom industry worried to such an extent that they’ve gone back to that hoary old chestnut of “content being the king” as part of efforts to lure consumers back. All three major telcos in India seem intent on offering a richer and broader viewing experience to their customers.
Having paid massive amounts to secure 5G airwaves, these telcos need to ensure robust month-on-month growth in their data plans to make some profits in the foreseeable future. Else, they would be facing the same challenges that the telcos faced in the 1990s for having misread the usage patterns and payment capabilities of the urban middle class.
The offerings are same, not just similar
While the OTT streaming platforms are a ready hook for smartphone users today, they’re omnipresent across all service provider networks and cannot be perceived as a differentiator to the customers. Hence we have Reliance Jio, Airtel and Vodafone Idea working hard to provide their customers with richer and broader viewing experience through innovative offerings.
And the battle for such offerings could mean more spending as Jio recently found out. They had to cough up a mean amount to acquire the streaming rights of IPL, India’s cash-rich franchise-led cricket tournament, through its subsidiary Viacom18. Innovations such as multi-camera views are expected to add value to customers watching games via their network.
With more and more homes substituting satellite television for the smartphone and using their television for a big-screen streaming experience, 4K and 8K content is likely to make a difference going forward. Which explains why Reliance Industries, which also owns an IPL franchise, coughed up Rs.3285 crore for the 2023-2027 cycle.
Everyone seems to be chasing the same story
In spite of its struggle to stay afloat, Vodafone Idea is working on additional 4K / 8K content while Airtel appears to have shifted focus to audio streaming via its Wynk platform. Of course, the reason the three major players are going all out to create sticky content is the less than one percent monthly growth in data consumption during the October-December quarter. This also led to a slowdown in sequential revenue growth to about 1.8% from 3.2% a quarter ago.
What’s resulting in additional worry creases is the sharp spike in operating costs where higher sales and SG&A expenses have accounted for nearly 50% increase, fed by the growing instances of customer churn. With nothing to hold subscribers to a particular telco, they’re free to waft in and out based on the perceived best deals on data and calls.
Content is King, but we need many more kings
All of the above leaves the telcos with little option but to seek out the King. Hence the beeline for content yet again as that alone can provide enhanced engagement with videos, gaming and audios leading the way. However, the irony is that none of the players are yet talking about a decentralized approach to content, in a way that is similar to eCommerce via initiatives such as the Open Network for Digital Commerce (ONDC).
As we speak, there are state-level initiatives that map themselves perfectly into a decentralized content strategy that could hold unique value. The UP government has already initiated its one-district-one-product initiative and is said to be following it up with a one-district-one destination and events from these destinations.
All it would take for these telcos is collaborate with local talent and a centralized creation and curation team to deliver high quality local content for consumption. This would also be a welcome change from the existing content flow that relies heavily on just two popular elements – cricket and cinema (Bollywood).
All three telcos currently have offerings of a similar kind – a library of movies, television shows, web series and music. Not to mention the live sports feeds coming only from India’s cricketing schedule. How the big guns plan to create a differentiator to pitch their 5G airwaves around content is a matter of debate that will get resolved only with time.