airtel: Reliance Jio, Bharti Airtel and Vodafone Idea firm up plans to tap into emerging gaming and e-sports segment

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India’s top telcos Jio, and are firming up plans to tap into the emerging gaming and e-sports segment that is expected to see strong growth and investments amid faster speeds and low latency with 5G services to be rolled out in India shortly.

All three telcos said that gaming will form a core of their business strategy going forward as they look to drive average revenue per user (ARPU) by engaging more subscribers and increasing user stickiness. E-sports is a sub-category of online gaming, which is a multiplayer video game played competitively for spectators, typically by professional gamers.

A November 2021 report by the Boston Consulting Group and Sequoia India estimated the Indian online gaming industry, including e-sports, to clock $5 billion by 2025 from $1.8 billion in November 2021. 5G smartphone installed base in India has already crossed 50 million mark. Within a week of the close of 5G auctions, telecom market leader Jio announced its JioGamesWatch platform which will allow live streaming and creator-viewer engagement across multiple Jio devices.

The carrier was the highest spender in the 5G sale, picking up 24.74 GHz of airwaves for Rs 88, 078 crore. Adarsh Nair, chief executive officer, Digital, told ET that gamers are a critical cohort of customers for Airtel. He added that since gamers demand higher bandwidth and lower latency connection it makes this a key segment for the company’s broadband business and its future 5G business.

“Similar to Wynk Music and Xstream Video, we will launch soon an Airtel gaming app that caters to the needs of gamers. In future, cloud gaming and related products will also be part of the Airtel gaming initiative” he said.

Airtel was the second highest bidder at the auctions, picking up 19.867 GHz of spectrum for Rs 43, 084 crore. Monetization models for the app will include advertising, Nair added.

He expected gamers to prefer higher ARPU mobile and broadband bundles. The telco will look to actively engage with e-sports athletes going forward. “Airtel will support gamers early in their lifecycle as they stream, watch and compete. We hope to provide the platform where we create emerging talent that could then go pro and join professional e-sports”. Airtel will also look at partnerships with e-sports companies, a strategy to be followed by Vodafone Idea as well.

“We have a very clear roadmap to build out propositions across various facets of gaming – like cloud gaming, social gaming, game stores, e-sports.” said Avneesh Khosla, chief marketing officer, Vodafone Idea. The “gaming proposition (will) grow over the next few months and quarters”. Vodafone Idea spent Rs 18,799 crore to pick up 6.228 GHz of airwaves.

A FICCI EY Media and Entertainment Report 2022 estimates the size of the e-sports and casual gaming industry in India at Rs 2880 crore in 2021, growing 32% over 2020. The number of e-sports players in the country doubled in a year to reach 600,000 in 2021, and the country now has 100,000 e-sports teams. Significantly, the segment saw a steep rise in viewership – 2 million hours in 2021 from 600,000 hours in 2020.

The report estimated the overall online gaming industry, which includes fantasy sports, transaction-based games, casual mobile games, and professional e-sports, grew 28% in 2021 to Rs 10,100 crore. This is expected to reach Rs 15300 crore in 2024. Gaming and e-sports are expected to be used to create stickiness among consumers and attract them to the 5G proposition. “In the initial phase, gaming/e-sports would be used to onboard customers to the newly launched 5G networks,” said Pulkit Pandey, principal analyst, Communications Technology Team, CIO Industries Research Group, Gartner.

Analysts add that bundling will become very crucial to push 5G adoption among consumers, since simply raising tariff on 5G rollout may not find traction among consumers. Bundling of gaming and e-sports will help increase ARPUs as well. “For customer stickiness and increase in ARPU, we should expect to see a loyal shift of gamers on to the 5G networks (whenever they are launched), pertaining to the benefits of 5G,” Pandey added.

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