A

CASE STUDY ON
Impact of reliance jio in telecom industry

SUBMITTED TO

BALAJI INSTITUTE OF INTERNATIONAL BUSINESS

BY --

Rohit ghosh

SRI BALAJI SOCIETY

BALAJI INSTITUTE OF INTERNATIONAL BUSINESS (BIIB)

S. NO. 55/2-7, TATHAWADE, WAKAD, PUNE - 411033

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 DECLARATION

I, ROHIT GHOSH a student of Balaji Institute of International Business, Sri Balaji Society,
Pune, hereby declare to the fullest of my knowledge and belief that the case study
presented is solely done by me for understanding how the Impact of reliance jio in telecom
industry success was made possible as a partial fulfillment of Post Graduate Diploma in
Management - (PGDM).

Place: Pune ROHIT GHOSH

Date: 28th Feb 2018 (IB-1614138)

PGDM-IB 2016-18

BIIB, PUNE

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TABLE OF CONTENT

CHAPTER NO. TITLE PAGE NO.

1 EXECUTIVE SUMMARY 4

2 INTRODUCTION 5

3 OVERVIEW 6

4 ORGANIZATION HISTORY 7

5 ANALYSIS 8

6 STATUS 10

7 CASE SOLUTION 13

8 ANNEXURES 14

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EXECUTIVE SUMMARY
Reliance JioInfocomm Limited, more popular known as Reliance Jio, recently shot to
news when MukeshAmbani announced the ideas and plans of Jio which shook the
industry. Share prices of Airtel, Vodafone, and Idea fell considerably when the launch
of Jio was made. Though the Lyf phones and Jio sim had already started doing the
rounds through preview offer, this was the first proper launch event that took the
industry by storm.

In 2005, Reliance Industries Limited split and there was one major de-merger of note
for Mukesh Ambani. His dream project- Reliance Infocom became a part of Anil
Dhirubhai Ambani Group. Mukesh Ambani went on to acquire Infotel Broadband
Services Limited. The company was the only successful bidder for pan-India 4G
network. Reliance then worked on establishing base for high-speed optical fibre 4G
network. It is actually capable of much more than 4G.
Then slowly and steadily, Lyf phones made foray into the market with Jio preview
offers. Free unlimited data for 3 months and free voice calls and sms was the way they
entered the market. Lyf phones seemed a decent deal, but it was Jio sim that caught
people’s eyes.

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Overview-

Indian telecom Industry, largest growing industry, has massive potential to serve people and
improving day by day. With awareness in young generation about this sector, the public
demand is all time high and still increasing. With upgradation in technology and demand all
major services providers from across the world entered in this sector
Telecommunication industry is one of the most emergent industries which face evolved very
speedily in last decade. Currently India is the world’s second largest telecommunication
market and still growing.

Mobile economy in India is increasing very fast and will add significantly to India’s GDP.
Indian telecommunication market is a excellent opportunity for network providers from
native and exogenous Players.

Both Indian network providers’ international providers receive considerable market share in
the Indian mobile industry. Recently Reliance Jio has gave a big jolt to Indian telecom
industry, schemes like free internet, free calling, 4g network provide a serious threat to
others. Reliance Jio emerge a new choice and other service providers face a new kind of
challenge and find difficult to cope up with new circumstances. This research paper discusses
the features of the jio and also through some light on the competitive edge over other service
providers.
Throughout the world telecom sector is one of the prevalent sectors. Study stats that India
would be a speedily escalating hub for internet users, with market expected to be $9 billion
by 2020 (Deloitte, 2017). Indian telecom sector is becoming backbone for fast growing
Indian economic of this decade. Jio came up in Indian telecom sector with a idea to make
huge revenue by providing quality service at a very cheaper rate. It came with advantage of
first biggest 4G network coverage across all 22 telecom circles in India (Jai Bhatia, 2016)
According to Paulasset, 2016 reliance jio is working according to Indian market; it gives best
quality services at much less price. Reliance Jio also giving challenge to more than 30
businesses because it also enters in other service sector related to telecom sector.

Objectives of the study

To examine the impacts of Reliance Jio on Indian telecom industry.

To analyze the major strengths, weakness, opportunities, and threats to
Reliance Jio in Indian telecom industry.

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Introduction-

Reliance Jio

Reliance Jio Infocomm Limited announced the launch of its digital services with JIO in
Mumbai on 1st September 2016 with Jio Welcome Offer. With the permission of Telecom
Regulatory Authority of India, users will have access to unlimited LTE data and national
voice, video, messaging services, Jio applications and content, free of cost up to 31 December
2016.

Reliance jio Vision:

(i) The best quality broadband network with the highest capacity;
(ii) A world of affordable, cutting-edge devices;
(iii) Compelling applications and content;
(iv) Superior digital service experiences;
(v) Affordable and simple tariffs.

Reliance Jio Market strategy

1. Digital solution for Education, Healthcare, Entertainment and Entrepreneurship.

2. Vo-LET technology with more features
3. Digital currency
4. Cloud Storage with Jio Drive

TELECOMMUNICATION SECTOR IN INDIA

The Department of Telecommunications (DoT) was set up by the Government of India (GoI)
in the 1980s. Its function was to manage all telecommunication services within the country.
In 1986, the GoI sought to modernize the telecommunications facilities in the country and it
established Mahanagar Telephone Nigam Limited (MTNL) to look after services in Mumbai
and New Delhi, and Videsh Sanchar Nigam Limited (VSNL) to handle overseas services.
The rest of the nation’s services were to be run by the DoT. In 1994, India ranked sixth in the
world in terms of number of installed fixed lines. The GoI introduced the National Telecom
Policy (NTP) in 1994 to improve India’s position in global telecommunications. The
introduction of the NTP led to a metamorphosis of the industry as it allowed the private
sector to invest in telecommunications..

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ORGANISATION HISTORY-
JIO ENTERS THE INDIAN TELECOM MARKET
Reportedly, Jio’s launch had been in the making for about six years. Jio was established
based on Ambani’s belief that mobile internet was the revolutionary technology of the 21st
century. Ambani re-entered the telecom sector by acquiring a company that had bought a
pan-India 4G spectrum in the 2300 MHz band in 2010. In 2010, RIL entered the broadband
services market with the acquisition of Infotel Broadband Services Limited (Infotel), which
was the only successful bidder for the pan-India fourth-generation (4G) spectrum auction
held by the Government of India. RIL had paid Rs. 48 billion to Infotel to pick up 95% of its
stake. Infotel had its name changed to Reliance Jio Infocomm Limited (RJIL) in January
2013....

JIO-A GAME CHANGER

Access to the Jio service was facilitated from September 5, 2016. Jio had introduced Aadhaar
-based digital Jio SIM activation across 3,100 cities and towns in India. This allowed the
customer to complete the SIM activation procedure within minutes using his/her Aadhaar
number. Reportedly, people across cities in India waited in serpentine queues to buy an RJio
SIM card. Application forms which were supposed to be free were reportedly sold in the
black market for Rs.100 each. Jio even started home delivery of Jio SIMs in December 2016.
One could register to get a Jio SIM home-delivered and it could be activated within 5 minutes
through eKYC. This service was active in 8 cities of India – Mumbai, Delhi (NCR), Kolkata,
Chennai, Bangalore, Hyderabad, Pune, and Ahmedabad.....
COMPETITIVE PRICING
Jio, which disrupted the Indian telecom market with its six-month-long free data services,
started charging customers from April 1, 2017. Ambani announced Jio’s tariff plans in
February 2017, including the special Jio Prime membership and the “Everyday More-Value”
offer. The Jio Prime membership offered 1 GB high-speed 4G data and free calls for Rs. 10 a
day for a year. The membership fee for Jio Prime was Rs. 99 per year. The unlimited free
voice, free data offered in the ‘Happy New Year’ scheme would be available to Jio Prime
members till March 31, 2018, at an introductory price of Rs. 303 per month. Jio Prime
members would also be able to enjoy all Jio’s applications worth over Rs. 10,000 absolutely
free till March 31, 2018. Jio in addition to its own tariff plans, also came up with the
‘Everyday More-Value’ offer in March 2017 under which its customers had the option to
choose a Jio plan that matched the highest selling tariff plan of any of the other leading
Indian telecom operators and would get 20% more data than other operator offered.....
MARKETING
RIL had aggressively promoted Jio even before its launch by promising free data and voice
calls. About fifty customer acquisition and relationship managers were appointed to hire
teams that would target signing up users. The launch of Jio was a massive event attended by a
who’s who from politics, Bollywood , and Indian and international media to ensure that the
offer reached out to the maximum number of people with multi-channel coverage...

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Analysis-
SWOT Analysis

Strengths

1. Reliance Industries is strong parent company backed up MukeshAmbani.

2. Company has begun with 4G service with no tariff. It has strong financial
capability to stand with initial losses.
3. Strong brand image due to excellent marketing and advertising strategy
4. It has brand ambassadors like shahrukh Khan and Amitabh Bachchan who has
deep influence on masses.
5. It has technological advantages i.e. 4G LTE services with VoLTE.
6. It has built strong national nework with investment of around $20 billion.
7. Its network covers all the 22 circles across the India.
8. Jio apps are offering wide range of features like movies, shopping, chat, cloud,
games etc. under one umbrella.
9. Jio compact with affordable LYF smartphones would increase the brand.

Weaknesses
1. Advertisement showing PM picture would raise new controversies.
2. Mobile number portability is not very smooth and jio is expected large
number of customers would migrate from existing service providers.
3. Company has to depend upon data consumption for profitability due to making
voice calling free.
4. Jio made late entry would make difficult to increase market share.
5. Earlier company’s telecom venture CDMA was unsuccessful.
6. Company has inadequate fide optic capacity.

Opportunities

1. The company can offer telecom services at competitive rates.

2. India has huge market for telecom services because of large scale availability of smart
phones.
3. At international market company has huge opportunity in many developing countries.
4. Due to technological edge company can also promote exclusive services to
consumers.
5. Company reliance communication has a huge infrastructure over the country.
6. Lower data tariff plans may further attract advertisement industry with option of e-
marketing.

Threats
1. People would not like to use jio after free services are over.
2. The initial phase of rapid increase it is very difficult to maintain a large
consumer base to cross breakeven point.
3. Existing strong competitors having broader and loyal consumer base would tough to
compete.

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PORTERS FIVE FORCES MODEL OF RELIANCE JIO-

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 Status-
Here’s a look at 7 ways the telecom industry changed after Jio’s entry.-

1. Ultra-cheap data: Before the entry of Reliance Jio, data was rather expensive and consumers
had to shell out up to Rs. 450 (on some networks) for 1GB of data. The highlight of Jio’s
launch offer was the free data it was offering to consumers, with 4GB of high-speed of 4G
data per day, followed by continued data at 128kbps speed. Eventually the company had to
launch chargeable plans after incumbent operators protested, but even then the tariff was so
low that consumers paid roughly Rs. 10 per GB of 4G data - something other operators also
started to offer in response.
2. Increased consumption of online content: India saw an exponential rise in the consumption
of online content with the availability of free data. Jio claims India’s data consumption went
from 20 crore GB to 120 crore GB in six months, adding that the average consumer
nowadays uses 10GB data per month.
3. Free voice calls: Voice calls became free for all consumers across networks when Jio
launched operations. The company has said both local and STD calls will always be free on
its network, to all networks. Rivals eventually followed suit, offering prepaid and postpaid
packs with bundled free minutes for STD and local voice calls to all networks. Jio claims its
network presently carries 250 crore minutes a day of calls.
4. Proliferation of 4G smartphones: The market for 4G smartphones exploded after Jio
services were launched as everyone had access to the company’s 4G network for free. While
4G handsets were seeing some traction in the affordable segment since late 2015, post-Jio,
4G VoLTE-capable smartphones started hitting the market for as low as Rs. 2,999. In fact, 95
percent of the smartphones sold in the country in the first quarter were 4G-capable, according
to data by IDC and Morgan Stanley Research.
5. Faster mobile data: With 4G becoming the norm in the market, mobile data speeds rose too
considering most people were on 3G networks before that. According to the latest data by
TRAI’s MySpeed app, Jio offers average download speeds of around 18Mbps, while the
incumbents deliver roughly 10Mbps speeds.
6. The death of 3G: While 4G was the biggest buzzword in the telecom industry since 2015,
most operators still delivered 3G speeds while upgrading to 4G. However, with Jio starting
operations, the migration to 4G networks speeded up, and 3G networks are finally being left
behind. In fact, almost all smartphones sold today are 4G compatible.
7. A record in user acquisition: In February, Jio claimed its telecom network had garnered 100
million users in less than six months of operations. At the time, Chairman MukeshAmbani
had said this growth is faster than even what global giants such as Facebook and WhatsApp
recorded. The Jio user base currently stands at 130 million.

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AREAS OF IMPROVEMENT-
The Reliance Jio launch has aroused huge interest among subscribers. The telco has added
more than 50 million subscribers to its network and aims to reach the 100-million subscriber
target set by Reliance Industries chairman MukeshAmbani.
Recently, Ambani unveiled Reliance Jio's Happy New Year Offer through a live stream.
Under the latest offer, all new users from December 4 will get free services till March 31,
2017. Also, the existing Jio customers will get the extended benefits on current SIMs.
However, after the launch, a number of issues related to the new services have surfaced
which could pose a challenge for Ambani in the days ahead as Jio battles it out with other
telcos.
Though the new network is still functioning under a 'Welcome Offer' that doesn't charge for
its services, these issues are quite consistent with the new subscribers.

Voice call failures: Reliance Jio has been stuck in a dispute with incumbent operators over
points of interconnectivity. Jiohas accused Bharti Airtel, Vodafone and Idea Cellular of
providing insufficient points of interconnectivity leading to call drops. Jio put out data for
September 22 saying over 12 crore out of 15 crore call attempts by its users failed. Of the
6.13 crore call attempts made to Airtel network on September 22, 4.8 crore or 78.4 per cent
of the calls failed. The failure on Vodafone network was higher at 84.1 per cent with 3.95
crore call drops out of 4.69 crore calls. Calls to Idea saw 3.36 crore call drops out of 4.39
crore calls made.
Bharti Airtel has hit back at Reliance Jio saying network connectivity issues and call drops
are due to Jio's own "under-preparedness", insufficient testing efforts and acquiring a large
number of customers at the pre-launch stage itself.

Decreased internet speed:With addition of users to the Jio network, the speed of Jio's 4G
data services has come down drastically after September 5. Now, the internet speed has come
down to 6-10 Mbps from 50Mbps during the launch stage.
On paper, the difference is huge but in terms of average customer use, even a speed of 8Mbps
should work flawlessly. However, the Jio connection faces frequent fluctuations hampering
the user experience. Users have also complained about varying speeds despite no change in
location.

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Buggy Jio apps: The Reliance Jio apps have not shown consistent performance but the idea
of free content sits pretty well with the Indian audience.
The Jio TV app is subjected to frequent crashes and has a long boot-time, which is also the
case with most apps released by Jio. In our experience, the Jio4GVoice is one of the most
glitchyJio apps. The app often fails to load and when it does, the experience is pretty laggy.

Lack of VOLTE support in older phones: All those who don't have VOLTE technology-
supported phones cannot make voice calls without the use of Jio4GVoice app which, as
mentioned above, seems buggy. This one drawback makes the lucrative free voice-calling
feature obsolete for most new consumers.
Apart from the VOLTE support, most Indian smartphone users are still stuck with 3G phones.
The Jiosims won't benefit them in any way.

Battery consumption: Reliance Jio has launched its internet services on the 4G band. With
not much difference in the rates of 2G or 3G services and 4G connection, new users are
inclining towards Jio. The only constraint with 4G services is that they take a toll on the
phone's battery, forcing the user to charge it repeatedly. With no 2G or 3G options, the user
can't switch to a slower connection to save battery.
The merging of Jio's 4G services with Reliance Telecom's 3G and 2G services might solve
this problem in the near future.

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Case solution-

1. Reliance jio must focus on the network and connectivity .

2. Currently it is good in urban areas but in rural areas it is still not up to the mark.
3. Currently there are many customers those who are using reliance jio as an alternative sim
just for data surfing so reliance should focus in improving of voice quality and better
connectivity which eventually will make the customers to use it as main purpose sim.
4. Acquiring of the market share has been greatly done by reliance jio but retaining of them
would be a big task .

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ANNEXURES

References:
1. Jai Bhatia Economic & Political Weekly Oct8, 2016 vol. II no 41.
2. http://www.ibef.org/industry/telecommunications.aspx.
3. http://www.rcom.co.in/Rcom/aboutus/overview/overview_milestones.html
4. https://www.budde.com.au/Research/India-Key-StatisticsTelecommunications-Market-
andRegulatory-Overview
5. https://www.geckoandfly.com/13143/50-things-smartphone-replacedwill-replace-future/
6. Press releases on subscriber data, March 2013. Telecom Regulatory Authority of India.
www.trai.gov.in
7. Parasuraman A., Valarie A. Zeithaml, and Leonard L. Berry. (1998). SERVQUAL: A
MultipleItem Scale for Measuring Consumer Perceptions of Service Quality. Journal of
Retailing, Volume 64, Number 1, Elsevier Science Publishing Company Inc., pp. 12-40.
8. Philip Kotler. (1995). Marketing Management – Analysis, Planning, Implementation, and
Control, (8th ed.). Prentice Hall of India, New Delhi, p. 444

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