Jio Revolution 2.0

Reliance Industries has done it again. The Mukesh Ambani-led diversified conglomerate took India’s highly-competitive, fragmented telecom market by storm when its wholly-owned subsidiary Reliance Jio went for the commercial launch of its telecom services in September 2016.

Touted by some as the world’s biggest startup with an initial investment of a staggering Rs 1.5 lakh crore, Reliance Jio notched up 16 million subscribers within just a month of its launch. This feat was sort of a world record as no other telecom operator achieved such a feat in such a short span of time.

Jio’s subscriber base crossed 50 million in 83 days before hitting 100 million milestone in February this year, even as its rivals scrambled for cover. Jio’s marketing strategy was a revelation as it offered free calls, free 4G data for several months to millions of customers, forcing other telecom operators to launch similar plans or reduce prices drastically. It will be naïve to think that Jio is doing all this for free.

As a commercial entity and part of the India’s biggest private enterprise, the new kid on the telecom bock will obviously squeeze profits out of its operations sooner or later. But its biggest achievement is that it has succeeded in making high-speed, high-quality data affordable to millions in the country. Moreover, it offered free voice calls on its plans and that itself is a revolution.

But there is a problem here. Though Jio has made data affordable and offered free voice calls, people can avail of them only if they have smartphones. However, owning a smartphone is an expensive option for many. Therefore, many Indians, mostly from lower income groups, are not able to enjoy Jio services now.

Apparently sensing this, Mukesh Ambani, known for his smart business acumen, pushed his Jio team hard to come up with an affordable solution for this. The result is Jio Phone which was unveiled by Ambani at Reliance Industries’ AGM on Friday.

The Jio’s new mobile device is smart-like feature phone designed and developed by Jio’s technical team. It will be offered free to all the Jio customers. All they have to pay is Rs 1,500 refundable deposit.

However, they can return the phone and take back their money after three years. This is obviously a masterstroke from Reliance Jio which, with this move, made connectivity, data affordability and device affordability possible at one go. This can be called as Jio revolution 2.0.

But as Jio transforms itself into a telecom colossus gradually, telecom industry watchers warn that monopoly will not be good for the Indian telecom industry. Existing players are also not happy as many of them took a bit hit on their top and bottom lines in the aftermath of Jio’s entry.

Also, efforts of companies like market leader Bharti Airtel and Idea to have a floor price for voice and data services, failed to yield positive results as the telecom regular Trai rejected their proposal outright. That proposal was obviously aimed at preventing Jio from offering free voice services. So, Jio revolution is here to stay!