How Reliance Jio set the Indian telecoms market on fire
Type the phrase ‘How Reliance Jio_’ into Google and you will be presented with suggestions such as ‘How Reliance Jio is monopolising the telecom sector’, ‘How Reliance Jio changed the Telecom landscape’, and ‘How Reliance Jio is revolutionising the Telecom sector’. If you wonder what Reliance Jio is, and why is it being described by such illustrious terms, then, unless you are from India, you are not alone.
Reliance Jio is the latest global sensation that is rewriting all the normal rules of conduct in telecoms operations history. It launched its operations in September 2016 and is now the biggest operator in India, and the second biggest in the world – on a single platform – behind China Telecom. This is the company that has made the incumbents such as Bharti Airtel and Vodafone India look like complete amateurs! In retrospect, they were.
Jio’s story started with one of the most infamous siblings rivalries of recent times, when Mukesh and Anil Ambani fought it out for the control of their late father’s business empire, Reliance. Through a deal brokered by their elderly mother Mukesh was given control of the oil arm of the business and Anil was given control of the telecoms, power, and finance arms, with both retaining rights to use the Reliance brand.
When Mukesh’s Jio went live, Anil’s RCom was already one of India’s leading broadband providers. But by the end of 2016 Jio had already amassed 72 million subscribers – and fast forward four years it has close to 400 million subscribers! This relentless growth has happened at the expense of all its competitors, large and small, forcing RCom and other operators either to consolidate their businesses or go under. Even the mighty Vodafone had to do that to keep its head above water!
How did Jio manage to achieve such an otherworldly feat?
Jio’s market entry strategy was based on the following pillars: Establishing the best broadband network; supply of cheap devices; provision of attractive content; superior customer service; and a reasonable tariffs system.
In 2015, when South Korea, Japan, and China had 42 million, 82 million, and 415 million LTE subscribers respectively, India had 1.6 million subscribers only! But a year later that number had ballooned to 72 million – mostly reflecting Jio’s 72 million subscribers then! Instead of going for higher value services, India’s incumbent operators had chosen to maintain the status quo, at the expense of innovation and economic progress. Jio instead believed that the market desired the best and decided to launch a nationwide LTE only network, leaving the complexity of supporting both 2G and 3G services behind. The market repaid this trust with a tremendous response.
Moreover, Jio, operating under Jio Platforms, has established the most comprehensive content ecosystem of all operators in the world. This is important because revenues from traditional voice and SMS services, and in some cases even data, have plateaued. However, few operators have dared to venture into the content and app business, leaving those in the arms of tech giants such as Google, Facebook, and Netflix. But Jio went for a wholesale market disruption: you pay for data and you get voice and SMS free! Therefore, by pushing its services such as music streaming, live TV streaming, video-on-demand, messaging, payments, and online grocery, Jio managed to add great value to data products resulting into a tsunamic increase in data utilisation.
This approach has also transformed how Jio positions itself too – less as an infrastructure provider and more of a content provider. A telecom operator’s sweet spot. Having supervised over a fundraising craze where dozens of investors – including Facebook and Mubadala – injected $16 billion into Jio Platforms in less than six months, Jio is now well positioned to challenge the likes of Google, Amazon, Alibaba and Tencent. Jio’s bet into the least travelled but very sensible path appears to command respect from everyone near and far and has propelled Mukesh into the top ten of the world’s richest.
It is difficult to tell Jio’s story without struggling for adjectives. Gigantic. Remarkable. Colossal. Revolutionary. Tremendous. Sensational, etc. All are fitting in describing Jio’s staggering growth story.
So, what is the relevance of this to a market such as Tanzania’s?
It is simple: These are markets calling for major disruptions. I have been saying this for a decade now – from the days where my job was to develop relevant use cases for technology solutions for Tanzanian operators. I have published several articles questioning the strategies that operators are using, but why listen when everything appears to be working, huh? Yes, until another operator comes to make a public spectacle of these operators’ failures.
What Jio has shown is that being an incumbent matters little when someone with enough capital and disruptive strategy comes around. This disruption, as has been shown in India, has precipitated many positives, especially in catalysing adoption of LTE and related services. What I am hoping is that someone – possibly Azam Telecom – will do the same thing to this market.
The market is there for the taking. So, for the love of God, new entrant: don’t be timid!
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Charles Makakala is a Technology and Management Consultant based in Dar es SalaamCharles
