India’s telecom industry is in turmoil, and depending on whom you ask, one man deserves all the credit or all the blame.

It’s been 18 months since Mukesh Ambani, India’s richest man, entered with Reliance Jio Infocomm Ltd. The 4G wireless network is basically a $31 billion bet on data. Ambani made voice calls—the core offering until then of a dozen mobile operators—absolutely free.

Such audacity both stunned and stung his rivals. Since Jio’s September 2016 launch, smaller incumbents have sold out, closed down or filed for bankruptcy, while the ruling troika of Bharti Airtel Ltd, Vodafone Plc’s India unit and aluminium billionaire Kumar Mangalam Birla’s Idea Cellular Ltd are hemorrhaging. Vodafone and Idea are also merging. The industry is complaining bitterly about how the regulator is favouring Jio over everyone else.

Rajan Matthews, who heads the Cellular Operators Association of India, is wondering who will put up the $10 billion needed annually over the next five to six years to expand 4G and roll out 5G. Banks are so worried about deteriorating credit quality that they would rather recover what they’ve already lent than throw more money into a bottomless pit.

The one party not complaining is the consumer.

Take a simple regulatory change like the recently imposed ban on non-transparent, discriminatory price discounts that are quietly offered to select customers. The industry is livid. Vodafone has gotten a stay order from the Madras high court against the stipulation that operators must publish all tariff plans and promotional offers on their websites, the Economic Times reported over the weekend.

It’s not a trifling matter, as a senior telecom executive told me in Mumbai, describing the situation as “grim." Retaining only those customers they consider to be a flight risk already has a cost. If that now has to be borne across the entire subscriber base in a country of 1.2 billion cellular users, then companies will have no choice except to let the fence sitters go—into Ambani’s outstretched arms. While this may upset Bharti, Vodafone and Idea, getting the same deal for the same service is hardly unfair from a customer’s perspective. This should have been fought for a long time ago.

What Ambani is doing isn’t rocket science. Everyone knows Indians’ second-biggest passion after cricket is Bollywood. Jio TV is hooking up customers with movies. Why can’t the incumbents exploit the power of content?

Ambani’s is a carriage-content-commerce triple play. (His plans for mobile commerce are yet to take shape, though he has an existing retail business.) But for all the cash being spewed by its oil refining and petrochemical units, Reliance Industries Ltd isn’t the only company in India to brandish a strong balance sheet.

In 2009, the Tata Group, armed with a $2.2 billion investment from NTT Docomo Inc., said its telecom unit would charge 1 paisa ($0.0002) per second on voice calls, upending the common practice of charging for at least a full minute. The customer-friendly innovation was backed by the Tata Group’s well-diversified balance sheet.

Yet when the big guys matched the challenger’s price, Tata failed to ratchet up the competition. The entrenched trinity won; consumers lost; and last year Tata handed its unprofitable telecom business and 40 million subscribers to Bharti.

India’s telecom industry has been ripe for disruption ever since the country’s Supreme Court cancelled 122 licences in 2012. But Bharti, Vodafone and Idea had no interest in upsetting their well-laden apple carts, and the Tata Group meekly ran away from its own war.

Ambani, though, no longer bound by a non-compete agreement he had signed with his younger brother Anil, was readying to pounce.

If the incumbents had any doubt about how the regulatory regime would take the shape of water to accommodate Jio’s eventual entry, they should have dropped those notions in 2013. That was when the government changed its rules to allow Reliance to convert its pan-India broadband internet spectrum rights (it was the only one to have them) into a full-service carrier licence.

Now, Bharti, Vodafone and Idea can cry all they want about regulatory uncertainty; consumers are too busy watching movies on their phones to pay much attention.

Ambani isn’t the king; content is. Bloomberg Gadfly

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