There are about 250 million feature phone users in India, and many of them still use 2G phones and only for voice calls, according to the International Data Corporation
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The world may be moving on to super-fast internet speeds on 5G or even 6G, but masses in rural India are still stuck in the 2G era.
All that could change with a new $12 phone from Reliance Jio this week.
The telecommunications arm of Indian conglomerate Reliance Industries, has opened the door for more people to gain access to the internet through the launch of its new internet-enabled phone with a 4G mobile network. Feature phones are essentially non-smartphones that have a push-button keypad and a small non-touch display.
Reliance Jio’s new feature phone aims to reduce the mobile connectivity gap between rural and urban India by giving non-smartphone users a cheaper alternative to switch from 2G to 4G mobile networks.
“There are still 250 million mobile phone users in India who remain trapped in the 2G era, unable to tap into basic features of the internet at a time when the world stands at the cusp of a 5G revolution,” Reliance Jio’s Chairman Akash Ambani said in a press release.
5G refers to the next-generation mobile networks that offer data at very high speeds, and are needed to support advanced technologies like driverless cars and virtual reality.
The new phone, named Jio Bharat, serves as an entry-level phone for first time internet users that would just rely on the basic functions without being convoluted by the endless number of applications that can be found on a smartphone, Varun Mishra, senior analyst at Counterpoint Research, said.
India is already the world’s second-largest smartphone market and is likely to add 300 million new internet users, making it the fastest country to provide internet services to those who remain unconnected, Mishra said.
“With a familiar form factor and internet connectivity, this device can help users experience key services like digital payments, content, and more for the first time through Jio’s ecosystem,” Mishra told CNBC. “However, screen size can limit the experience a bit, but still good for first-time internet users.”
Customer retention
Jio has an upper hand against its competitors in the telco service space, such as Vodafone Idea — a partnership between Aditya Birla Group and Vodafone Group — as well as Bhati Airtelas and BSNL.
Apart from selling the phone at an extremely low price point, monthly plans from Jio are also very affordable — and the other telco companies could even start losing customers, Mishra highlighted.
Reliance Jio claims that their monthly plans are 30% cheaper than other telcos, and offer customers seven times more data.
Paying $1.50 will get users unlimited voice calls and 14 gigabytes of data, compared to almost $3 for other voice calls and just 2 gigabytes of data from other operators, Reliance Jio’s press statement claimed.
This is Jio’s tactic to attract more feature phone users to sign a plan with them even though they only offer 4G and 5G mobile network services, according to Navkendar Singh of the International Data Corporation (IDC).
Reliance Jio has rolled out 5G services in 406 cities in India.
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There are about 250 million feature phone users in India, and many of them still use 2G phones and only for voice calls, according to Mishra.
Reliance Jio attracts these consumers and take them away from “legacy operators” by offering more “palatable” price plans, Singh told CNBC in a phone interview.
“From what we understand, the main objective for Jio is to get more customers on the Jio platform and the Jio network, and they can then start cross-selling the services,” he said, explaining that customers can also tap on Jio’s payment and streaming services.
Additionally, Singh highlighted that Reliance Jio hopes first-time internet users who purchase the Jio Bharat will eventually upgrade to more advanced phones down the road.
“Right now, Jio gets revenue of about $1.50 to $2 a month, and when customers subsequently upgrade their phones in three or four years time, they would choose more advanced feature phones or low cost smartphones at some point in time,” he added.
Price war with other telcos?
Analysts who spoke to CNBC also agree that despite Jio’s cost-friendly plans, other telco companies are unlikely to significantly drop their prices.
“There’s been an ongoing tussle between Jio and other telcos in India,” said Nikhil Batra, research director of IDC.
“Lowering prices across the board will not be a viable option, but it will be a challenge for [other telcos] to create new customer experiences and product bundles to increase customer stickiness,” Batra said.
According to data from Macquarie Research, Jio currently has the biggest subscriber market share in Delhi (34%), Mumbai (35%), and Kolkata (42%), compared to Vodafone Idea,Bharti Airtel and BSNL.
However, other telcos could still benefit from those in India who continue to choose phones that do not let them surf the internet.
Macquarie data also showed that in rural areas such as Bihar, Jammu and Kashmir, and Himachal Pradesh, Bharti Airtel holds a larger market share than Jio.
India’s 5G rollout
India has the world’s second largest telecom industry with a subscriber base of 1.17 billion people as of September 2022, data from IDC showed. The growth trajectory of the sector is just going to get higher from here, the market intelligence firm said.
“The industry’s growth over the past few years has been primarily driven by lower tariffs, availability of affordable smartphones, launch of telecom services by Reliance Jio, expansion of 4G coverage, and higher data consumption by subscribers,” Batra said.
More consumers are also expected to purchase smartphones that have a 5G mobile network.
About 52 million 5G-enabled phones were purchased in 2022, an increase from 26 million the previous year, IDC data showed.
“India’s 5G rollout has been much quicker and smoother and is well on course to reach pan-India by Jio by the end of the year. Jio and Airtel already have 5G services, and Vodafone Idea and BSNL are expected to join in rolling out 5G by 2024,” Counterpoint Research’s Mishra said.
Men talk on their mobile phones in front of an iphone 14 advertisement, in Kolkata on September 27, 2022.
Nurphoto | Nurphoto | Getty Images
Counterpoint Research estimates there are nearly 85 million users of 5G capable smartphones in India, and 5G handsets had captured 32% of market share in 2022. Over 50% of smartphones shipped in April 2023 had 5G capabilities as well.
However, this is largely supply driven, Batra said. That’s because “brands are able to bring in more 5G devices due to the better supplies achieved by 5G roll out and demand for 5G phones in other countries such as China and Korea.”
“Consumers in India have not really demanded a 5G device until now, their purchases being driven by the availability as almost all smartphone models are priced around $300 and are 5G capable,” he added.
Despite regulation and telecom infrastructure challenges, “India will be a major market for 5G by 2026 and will dominate the 5G net additions just as China starts to mature and decelerate,” Batra said.
Technology is playing a much bigger role these days and “we can expect India to further accelerate and set an example,” he said citing the example of banking and Unified Payments Interface as an example.
“India leapfrogged the majority of developed nations in making digital payments convenient, accessible, and widely accepted, irrespective of merchant sizes,” he added.
OpenAI’s EMEA startups head Laura Modiano spoke at the Sifted Summit on Wednesday, 8 October.
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OpenAI on Tuesday announced a council of eight experts who will advise the company and provide insight into how artificial intelligence could affect users’ mental health, emotions and motivation.
The group, which is called the Expert Council on Well-Being and AI, will initially guide OpenAI’s work on its chatbot ChatGPT and its short-form video app Sora, the company said. Through check-ins and recurring meetings, OpenAI said the council will help it define what healthy AI interactions look like.
OpenAI has been expanding its safety controls in recent months as the company has faced mounting scrutiny over how it protects users, particularly minors.
In September, the Federal Trade Commission launched an inquiry into several tech companies, including OpenAI, over how chatbots like ChatGPT could negatively affect children and teenagers. OpenAI is also embroiled in a wrongful death lawsuit from a family who blames ChatGPT for their teenage son’s death by suicide.
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The company is building an age prediction system that will automatically apply teen-appropriate settings for users under 18, and it launched a series of parental controls late last month. Parents can now get notified if their child is showing signs of acute distress, for instance.
OpenAI said it began informally consulting with members of its new expert council as it was building its parental controls. The company brought on additional experts in psychiatry. psychology and human-computer interaction as it formalized the council, which officially launched with an in-person session last week.
In addition to its expert council, OpenAI said it is also working with researchers and mental health clinicians within the Global Physician Network who will help test ChatGPT and establish company policies.
Here are the members of OpenAI’s Expert Council on Well-Being and AI:
Andrew Przybylski, a professor of human behavior and technology at the University of Oxford.
David Bickham, a research scientist in the Digital Wellness Lab at Boston Children’s Hospital.
David Mohr, the director of Northwestern University’s Center for Behavioral Intervention Technologies.
Mathilde Cerioli, the chief scientist at Everyone.AI, a nonprofit that explores the risks and benefits of AI for children.
Munmun De Choudhury, a professor at Georgia Tech’s School of Interactive Computing.
Dr. Robert Ross, a pediatrician by training and the former CEO of The California Endowment, a nonprofit that aims to expand access to affordable health care.
Dr. Sara Johansen, a clinical assistant professor at Stanford University who founded its Digital Mental Health Clinic.
Tracy Dennis-Tiwary, a professor of psychology at Hunter College.
If you are having suicidal thoughts or are in distress, contact the Suicide & Crisis Lifeline at 988 for support and assistance from a trained counselor
Oracle Cloud Infrastructure on Tuesday announced it will deploy 50,000 Advanced Micro Devices graphics processors starting in the second half of 2026.
AMD shares climbed about 2%. Oracle shares sank 4% while Nvidia was more than 3% lower.
The move is the latest sign that cloud companies are increasingly offering AMD’s graphics processing units as an alternative to Nvidia’s market-leading GPUs for artificial intelligence.
“We feel like customers are going to take up AMD very, very well — especially in the inferencing space,” said Karan Batta, senior vice president of Oracle Cloud Infrastructure.
Oracle will use AMD’s Instinct MI450 chips, which were announced earlier this year.
They are AMD’s first AI chips that can be assembled into a larger rack-sized system that enables 72 of the chips to work as one, which is needed to create and deploy the most advanced AI algorithms.
OpenAI CEO Sam Altman appeared with AMD CEO Lisa Su at a company event in June to announce the product.
Read more CNBC tech news
Earlier this month, OpenAI announced a deal with AMD for processors requiring 6 gigawatts of power over multiple years, with a 1-gigawatt rollout starting in 2026. As part of the deal, and if the deployment goes well, OpenAI may end up owning as many as 160 million shares of AMD, or about 10% of the company.
OpenAI has historically been closely linked with Nvidia, whose chips were used to develop ChatGPT. Nvidia’s chips dominate the market for data center GPUs with more than 90% market share. Nvidia also invested in OpenAI in September.
But OpenAI leaders say the company needs as much computing power as possible, which means it needs AI chips from multiple suppliers. OpenAI also has plans to design its own AI chips with Broadcom.
“I think AMD has done a really fantastic job, just like Nvidia, and I think both of them have their place,” Batta said.
Tuesday at Oracle AI World, founder and Chairman Larry Ellison is set to take the stage and share his views on the latest OpenAI deal and what his company is doing to stay ahead of its main cloud competitors – Microsoft, Amazon and Google.
“Oracle has already shown it is willing to place big bets and go all in to meet the AI moment. The company must now prove that beyond capacity, it can capitalize on its massive underlying data and enterprise capabilities … to add meaningful value to the enterprise AI wave,” said Daniel Newman, CEO of The Futurum Group, on the sidelines of Oracle’s conference.
Aerial view of the Apple Data Center in Mesa near Phoenix, Arizona, U.S. on August 6, 2017. Picture taken on August 6, 2017. Apple plans to build its second data center in China at Ulanqab City in the Inner Mongolia Autonomous Region.
Jim Todd | Reuters
A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
The sudden surge in demand for data is fast creating new commercial real estate sectors – not just data centers, but so-called quantum real estate and powered land.
The former refers to structures designed to house specialized quantum computers. The latter is land prepared and ready for data center operations, with a focus on obtaining a reliable and sufficient power supply. That land would have to be secured with the permits, utility commitments and infrastructure needed to deliver power to a data center.
There are currently about 20,000 acres of powered land sitting under operational data centers around the world. Roughly 40,000 acres of powered land, almost 2 billion square feet, are needed to support current projections for data center growth over the next five years, according to a new research paper from Hines, a global real estate investment manager. That’s equivalent to just under the size of three Manhattans or about 1½ times the size of Paris.
Hines, which has been developing data centers for more than 20 years, has pivoted to a new business in just the past year. It is now securing power and entitlements for hyperscale sites. What that means on the ground is mapping grids, negotiating with landowners and providing financial guarantees to grid operators, who now demand it.
“The challenge isn’t building walls anymore. It’s getting megawatts to the site,” said David Steinbach, Hines’ global chief investment officer. “Hines is focused on this front-end work, making land AI-ready before the buildings even rise.”
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Steinbach said powered land has become its own investable asset class, because power rights themselves are scarce and valuable. Once grid connections and permits are secured, you’ve created a tradeable asset with clear demand from hyperscalers and operators, he said.
The competition for powered land is being led more by tech companies and energy producers than real estate developers, but Hines clearly doesn’t want to be left behind.
“The smartest capital today isn’t chasing square footage — it’s enabling computation,” said Steinbach, citing the recent Nvidia deal with Intel to co-develop chips for data centers and personal computers. “Nvidia‘s $5 billion bet on Intel isn’t just a chip deal, it’s a seismic signal that AI infrastructure is the new oil.”
In August, Silver Lake, a global private equity firm focused on technology investment, along with Commonwealth Asset Management, a real estate and infrastructure investment firm, announced the launch of a powered land platform aimed at data center development. It will deploy $400 million of capital “to assemble a global portfolio of strategically located powered land sites to address the key scarce input in meeting the escalating demand for data centers,” according to a news release.
The platform is currently operating in and targeting high-growth markets across the U.S., Canada and the U.K., where power access is becoming increasingly scarce.
“This investment represents a long-term commitment to not only meeting the immediate needs of AI-driven data center growth but also positioning the company as a leader in the future of digital infrastructure and a one-stop shop for rapidly growing developers and hyperscalers,” said Lee Wittlinger, managing director at Silver Lake, in the release. “Our innovative approach to land and power solutions, combined with strategic relationships with key energy partners, will enable us to meet the evolving demands of hyperscalers with a holistic, differentiated approach.”
Data center hubs will now have to expand beyond already crowded markets like northern Virginia and into power-rich regions in the Midwest and Texas. Hines’ research paper points to big opportunities right now in Europe, where undersupply and growing demand could mean big potential for both developers and investors. It also highlights the Middle East as an emerging market with growing potential as governments there invest heavily in artificial intelligence, renewables and grid infrastructure.
This is not to say that this new concept of powered land is without challenges, including securing the appropriate land, managing entitlement processes with local governments, and working with utility providers to obtain sufficient commitments.
“This isn’t just a tech story,” said Steinbach. “It’s a building cycle story reshaping how and where the real estate business develops for decades to come.”