The Telecom Sector in India is hyper competitive, with multiple groups trying to capture the market. ‘Reliance Jio Infocomm Limited’ entered the sector last year and it’s not just winning the game but rewriting the rules altogether.
One question that seems to be on everyone’s mind is how the company will make a profit when their rates are so low. To answer this question, one needs to understand Mukesh Ambani’s grand ambitions, not for the present but the future.
Let’s start with 2 basic facts of the Indian Telecom market before JIO entered it.
1. There were more than 1 billion mobile users in India, out of which only 34% were connected to the internet.
2. Only 12 percent from these 1 billion used 3G data or above
Now spend a minute or two analyzing the above two facts and you will know the next big movement in the telecom industry is…
“Internet data and not voice”
Networks like Airtel, Idea, and Vodafone knew about this but they did not price their plans aggressively because back then they did not feel the need to, as no other company was there to take away their subscribers. So if any company manages to capture the data penetration in India, they virtually will own the telecom sector in the entire country. Then came JIO which took the market by storm by offering Data Centric plans and free promotional data for nearly a year to make people realize that for an internet power user 1GB data a day is not really a lot and called it “Welcome Offer” then came the “Happy New Year offer” The next in line was “Summer Surprise Offer” and after it was banned by TRAI (Telecom Regulatory Authority of India), the same wine in a different bottle was …. “Dhan Dhana Dhan offer”.
Now let’s see the Basic Difference between JIO and others!!
The Biggest difference is JIO’s Optical Fibre Network. An optical Fibre is a wire that converts your data signal into light and transfers them at the speed of light. You know how fast is light. Reliance JIO has the longest fibre optic network in the country, ranging over 2,50,000 Kilometers and 90,000 eco-friendly 4G Towers to provide unmatchable 4G Coverage in all of India’s 22 telecom circles. Having that kind of fibre optic network is not a Joke; it requires a lot of money.
- Can you imagine how much money??
Reliance JIO invested 1,500 Billion to put this in perspective – this is more than two times the combined investment of Airtel, Idea, and Vodafone in the 4G Segment, to give you a comparison Facebook has bought Whatsapp for around 1,200 Billion, so how can JIO do justice to the 1,500 Billion investment?
- Their planning basically consists of 5 steps:
Step One: Undercut the market price by giving attractive discounts and free promotional Data.
Step Two: Let everyone switch to JIO or at least buy a JIO sim to experience data for free.
Step Three: Unleash the power of fibre optic network to give super fast internet and make people realize that 1GB data is not really much.
Step Four: Grow your subscriber base by having good customer care and awesome plans.
Step Five: Recover your investment using the large number of users accumulated
Once you have already laid down the fibre optic network, the cost of operating is not very huge. On the contrary, you can operate the network at minimal cost; therefore the only focus is to get more internet users. If you do the math, you will be able to realize that if 60% of the people in India use 1GB internet per month then JIO can recover the initial investment in 3 years. The whole master plan is based on one single thing and it is “Volume”. JIO’s ambitions aren’t limited exclusively to mobile internet. The company plans to rake in profits from its mobile apps which include a variety of services.
Mukesh Ambani’s business philosophy is a simple one
“Nothing Ventured Nothing Gained”
He has recognized mobile internet to be the most profitable venture in the long, he thinks, a business needs a purpose beyond just making profits. In an interview, he said, “I believe that if you create societal value, customer value and employee value, and if you focus on these, the economic return is a by-product.” Going by the current scenario, in which Reliance JIO is certainly creating societal and customer value, the company will very likely generate monumental revenues in the future
Fun Fact: Before the commercial launch of JIO, less than 15 percent of India had access to 4G connectivity, a figure the telecommunication industry wishes to push to a whopping 90 percent by the end of 2017.
First day first show movies in the luxury of your home
The much-awaited Jio Fiber home broadband services will commercially roll out on September 5 with subscription prices starting Rs 700 per month, going up to Rs 10,000 per month. The company confirmed that there will be a lot of bundled services and value additions that the Jio Fiber subscription will offer. The one that perhaps stands out the most is what is referred to as ‘First Day, First Show’.
At the AGM keynote, Mukesh Ambani announced that Jio Fiber subscribers will be able to enjoy the movie premieres in the comfort of their homes, on the same day as they release in cinema halls and movie theatres in India. This service will roll out in the middle of next year and will be available to all Jio Fiber users.
Products by Jio
Favourite games now on TV
During a demonstration, Reliance Jio directors Akash Ambani and Isha Ambani showcased how one can play games using the Jio set-top-box. The interface did look interesting and the box is said to be “at par with the leading gaming platforms globally”.
A quick demo of FIFA 19 with multiplayer support was also showcased at the event. It is also said to support almost all gaming controllers and your smartphone can be used as a virtual controller as well. Paired with the Jio Fiber network, users can expect zero-latency, for an uninterrupted experience. Jio is also confirmed to be partnering with popular gaming publishers like Tencent, Gameloft, and Microsoft.
Shop using 3D model of yourself
Along with gaming, the Jio set-top box will also be capable of offering Mixed Reality (MR) experiences. Reliance Jio has partnered with a start-up by the name of Tesseract for this feature and also announced Microsoft HoloLens-based headset called Jio HoloBoard. The Jio set-top-box along with Mixed Reality will offer three use cases- shopping, education, and entertainment. Using the headset, one could have a realistic experience while shopping by trying on clothes on a 3D model of themselves.
Free 4K TV on offer
As part of the Jio Fiber Welcome Offer, the company says they will be offering a free HD/4K TV and a 4K STB for free to anyone who subscribes to the Jio Forever Annual Plans.Also, the Jio Fiber broadband service will bundle the subscriptions to popular over the top (OTT) streaming services, as part of the subscription.
Slashed call rates, single family bill and concession on rate of data with Jio Postpaid Plus
The Jio Fiber broadband users will be eligible for the Jio Postpaid Plus offer, depending on which subscription plan they sign up for. This will, Reliance says, entitle them to “platinum grade service and product experience”. What this means is that if you wish to buy a new Jio mobile connection or switch your existing mobile connection to Jio, you will get priority service at your doorstep to set-up your SIM card and activate the connection.
Secondly, Reliance Jio will offer family plans that will let you share a single data plan and have a single bill for multiple Jio mobile connections at home. Reliance Jio will also offer reduced calling rates for ISD calls.
The study concludes that the respondents felt that the Reliance Jio is the best service provider due the exclusive services provided and though they also many faults which are rectified eventually as the time evolves. Hence Reliance Jio is the people’s favourite services provider. This was the goal that was to be achieved by reliance Jio which now has been achieved due to their exclusiveness and their friendly services.