Xavier Niel is making $billions pricing as low as 40 euro cents. The wireless world is shocked by Reliance Jio's low price of $0.74/gigabyte. I picked up an Indian Express comment "Cheapest 4G-LTE data rates the world has ever seen." By some measures, that's true; by others, such as price/gigabyte at 50 gig, France and Finland are lower. The other Indian carriers are frantically trying to find a way to match Ambani's pricing without going broke.
European data demonstrate today's LTE networks are efficient enough to thrive on low prices. Datamonitor provides this handy chart of best European prices. For 20 gigabyte usage, Denmark is about the same price as Reliance. At 50 gigabytes, Finland and France are actually a little cheaper. In comparison, U.S. prices are astronomical. Germany and Italy, with only three carriers, are very high. (Data below)
Reliance does shine at 1-10 gigabytes. 10 gig is $7.40, a price range the Europeans mostly wouldn't consider, except Free. You can even buy 1 gig for $0.74 on a day pass.
Actual network costs will continue to fall rapidly, 20-50%/year. Three carrier aggregation is spreading around the world and high order MIMO is about to ship.
The right question is not why Reliance is so cheap but why others are so high.
Thanks to Leila Abboud, who pointed me to the Datamonitor chart in her article How to repel a billionaire about Xavier Niel's impending shakeup of the Italian market.
|Country||GB for €35||Price of 20GB||20GB-4G-Tethering-€35 met?|
|United Kingdom (UK)||20||€30.48||Yes|
|Latvia (LV)||13||not available||No|
|Croatia (HR)||10||not available||No|
|Spain (ES)||7||not available||No|
|Romania (RO)||6||not available||No|
|Belgium (BE)||5||not available||No|
|Czech Republic (CZ)||3||not available||No|
|United States (US)||2||€89.00||No|
|Slovak Republic (SK)||2||€68.00||No|
|Hungary (HU)||1||not available||No|
|Malta (MT)||0||not available||No|
|Bulgaria (BG)||0||not available||No|
Datamonitor http://dfmonitor.eu/ is from Rewheel, an outstanding small Finnish consultancy who describes themselves as Our senior management consultants work with mobile network operators, MVNO groups, regulators, governments, global tech firms and investors that share our vision for the proliferation of affordable, unconstrained, open mobile internet connectivity. Their sentiments are with the consumer, and I wouldn't be surprised if they chose very favorable comparisons. But the differences are so extreme I'm sure completely unbiased choices would come to a similar conclusion.