It was the year of the big bang in telecom. Reliance Jio's disruptive entry into the sector threw an unorthodox gauntlet at its rivals, triggering a bruising war of words - and tariffs - among players.
But it was also the year which ended in a whimper for the telecom spectrum auction. The much-touted "biggest spectrum auction" proved to be a stupendous failure, marring the spirit of the industry.
Reliance Jio launched its fourth generation (4G) services in September -- offering free voice, forever. To sweeten the deal, it threw in free data till the end of the year, later extending it to March of 2017.
Voice is what telecom operators make their money on. Without that, how does one survive in a market as price sensitive as India?
"I assure you, we will not lose money," Reliance Industries Chairman Mukesh Ambani told his shareholders while announcing the Jio offer. This was taking competition to a whole new level.
"The free voice call offer by Reliance for the 4G roll-out was a major event -- it was disruptive," Rishi Tejpal, Principal Research Analyst for Telecom Business Strategy at Gartner, told IANS.
Jio's disruptive offer led to long queues at its outlets across the country. But then in mobile telephony, each network is dependent on the others for succesful completion of pan-Indian calls. Reliance Jio found a new turf war in the making. It accused incumbent players of not providing enough number of Points of Interconnection (PoIs).
As expected, the matter was dragged to the ministry level and the watchdog -- the Telecom Regulatory Authority of India (TRAI). The regulator proposed a heavy penalty of Rs 3,050 crore, in all, on Bharti Airtel, Vodafone India and Idea Cellular for "violating licence norms" by denying enough PoIs to Reliance Jio.
"The issue of limited interconnection points, as highlighted by Reliance Jio, impacted the customer experience it wanted to give its customers," Tejpal said.
The gauntlet thrown by Reliance Jio was, of course, picked up -- there was no way out. The three big telecom players in the country -- Bharti Airtel, Vodafone India and Idea Cellular -- brought in their own offers on free calls for pre-paid customers.
"The incumbents seem not to have lost comparable market share or seen a large movement of their customers to Jio," Mahesh Uppal, Director of consultancy firm Com First, told IANS
Losing market share is one thing; losing revenue is another and a more serious matter. "There is sufficient evidence that attempts by incumbent mobile operators to match Jio's aggressive pricing has dented their revenues significantly," Uppal adds.
The situation, therefore, would be a matter of concern for both sides, he suggests. The new year would decide who gets a bloody nose and who remains unscathed in this bruising fight.
By the end of September, the number of wireless telephone subscribers in India had already crossed the one billion mark, standing at 1,049 million, according to TRAI data.
Amidst the unhappiness over call drops and poor service -- often attributed to lack of enough telecom towers or adequate spectrum, the government was very hopeful that its "biggest spectrum auction" would bring in substantial revenue and ease the problems.
The big hope was to raise Rs 566,000 crore. It got commitments of only Rs 65,789 crore or 11.6 per cent of the desired figure, with the auction ending within five days.
The government was warned by experts and the industry that the high reserve price the regulator chose -- and approved by the Central government -- would not excite telecom operators. But the government's sight was set on garnering revenue.
A total 2,354 MHz of spectrum was put on the block for e-auctioning, but only 965 MHz was sold -- or just 41 per cent of what was on offer. The auction went through 31 rounds for seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz. There were no takers for 700 MHz and 900 MHz -- as cautioned.
"The spectrum auctions have successfully removed the long-felt shortage for spectrum but failed to deliver the revenues that the exchequer had hoped to receive. They reflect that companies do not find the powerful 700 MHz sufficiently attractive at the price the government expected. The government will now need to review its plans for future auctions," said Uppal.
Industry experts, though, say the service quality would improve with whatever was sold, replenishing or adding to the kitty of the telecom players.
The operators also moved to tackle the call-drop issue by planning to set up 60,000 telecom towers at a cost of Rs 12,000 crore.
"The industry has made consistent and significant efforts to optimise networks which have largely been completed, with more than 200,000 sites being installed in the last 15 months for 2G and 3G services across the country since Jan 1, 2015," Rajan S. Mathews, Director General, Cellular Operators' Association of India (COAI), told IANS.
Highlights of telecom industry in 2016:
* Launch of Reliance Jio Infocomm in September
* Spectrum auction: Ended within five days with a total commitment of only Rs 65,789 crore
* Reliance Communications and Aircel merger that resulted in asset base of Rs 65,000 crore
* Reliance Jio, Reliance Communications got government's nod for spectrum sharing