India is currently the world’s 2nd largest telecommunications market with a subscriber base of 1.183 billion and it ranks 3rd in the internet market. As the market of android users increased in India, India stands in 4th position in the app economy in the world.
JIO from Reliance is being linked as one of the biggest startup witnessed by the world, with an underlying venture of almost Rs 1.5 Lakh crore and it is one of the greatest greenfield advanced endeavours. Reliance JIO has a current market share of 13.71% in terms of wireless subscribers (4th largest service provider) according to the TRAI data of December 2017. Six years down the lane in making, with Reliance Industries Limited buying 96% stake in IBSL i.e. Infotel Broadband Services Limited for Rs. 4,800 crores (approximately) in June’ 2010, that had picked up the BWA spectrum range in 22 telecom circles inclusive at each one during the spectrum auctions that occurred earlier in that year. Later proceeding as RIL’s telecom auxiliary, Infotel Broadband Services
Limited was renamed as RJIL that stands Infocomm Limited in January 2013.
After the commercial launch of RJIO on September 5, 2016, with free services, we can see a tremendous growth of about 77.7 million in total subscriber base in Quarter 4 in 2016. All the 12 service providers in India were eager to capture new customers and also to retain the existing customers after the launch of Reliance JIO. These players could not retain their existing customers due to many reasons. Some of these players were not having a technology like 4G and VOLTE to compete with Reliance JIO.
There was a huge reduction in revenue for major players like Bharati Airtel (1124.23 Crore), Idea (529.28 Crore), Vodafone (524.54 Crore) and BSNL (694.42)in Q4, 2016 soon after the introduction of Reliance JIO free services. The overall revenue of the major players in 2017 was much less compared to the revenue they obtained in 2016.
Strategies adopted by Reliance Jio to capture the Indian market
The spotlight i.e. three-pronged on broadband networks, reasonable smartphones and data services, and the approachability of rich element and applications has endowed Jio to make an incorporated business procedure from the initial preparatory point and today, Jio is equipped for offering an exceptional mix of telecom, rapid info, computerised trade, media and payment services.
Marketing Disruption: Free voice, JIO apps, SMS & data initially: SIM’s was initially given free to attract the customers. The customers were asked initially to use whatever amount of data they like later they made into a restriction of data to 1GB/day. The customers were made addictive to data by giving them free. This strategy really pulled 100 million subscribers to take JIO within 170 days.
Pricing disruption: Affordable Pricing: Reliance JIO offers free voice calls, free roaming and 100 SMS per day at affordable prices after their free services.100Rs from every customer was collected for prime membership every year by Reliance JIO. JIO offers various plans like 84GB data for 84 days at Rs 399. All the plans in JIO offer free voices and 100 SMS daily. Before the launch of reliance Jio most of the service providers were providing 1GB data for approximately 190Rs.This pricing was made affordable by Reliance Jio.
Operational strategy: The operational strategy was focused mainly on the five performance objectives such as quality, speed, dependability, flexibility and cost. The operational decisions were made in three different areas such as:
• Construction of towers & laying fibre optic cables
• Construction of international networks like BBG gateway
• Investments in licenses
• Investments in the spectrum
• Sharing of spectrum & acquisitions of wireless infrastructure from RCOM
• Technological Advancements like Voice over Long Term Evolution (VOLTE) • 4G Data Speed
• More margins and schemes to distributors and retailers
• Fast and digital SIM activations through eKYC
• 4G smartphones and other merchant devices for retailers to start Business
Telecom major Reliance Jio Infocomm on Thursday reported a 65 percent increase in its standalone net profit for the October-December 2018 period.
Its standalone net profit stood at Rs. 831 crores in the third quarter of the financial year 2018-19, against Rs. 504 crores reported in October-December 2017-18, the company said in a statement. Reliance Jio’s operating revenue during the period under review stood at Rs. 10,383 crores, 50.9 percent higher than the Rs. 6,879 crores earned during the corresponding period of the last financial year.
Its subscriber base as of December 31, 2018 was 280.01 million. Earning per subscriber marginally moderated to Rs. 130 per month from Rs. 131.7 previously.
“Jio has sustained its pace of underlying subscriber additions with net addition during the quarter of 27.9 million (as against previous four-quarter average of 28.4 million),” said the statement.
Further, average data consumption per user per month was 10.8GB and average voice consumption was recorded at 794 minutes per user per month. Video consumption drove most of the usage, increasing to 460 crore hours per month, it said.
It can be logically derived that JIO’s strategies – Marketing, Pricing, Operational, Distribution, Capacity Management – have been successful in disrupting the Indian telecom market and achieving commercial success in a short period of time.
Kshitiz Verma – Global CTO, Olialia World