Reliance Jio’s commercial launch in September 2016 sent shockwaves through the telecom industry in India. Mukesh Ambani-led venture has set a world record when it comes to acquiring users. The service acquired 16 Million subscribers in the first month of its operation. It moved on to acquire 50 Million subscribers in just 83 days from launch, another world record. Now, Jio has acquired 100M users in 170 days, setting another world record. If you look at the other records as well, every second record linked to the telecom industry in India is held by Jio right now.
Speaking at an event, Ambani, Chairman, Managing Director and largest shareholder of Reliance Industries Limited, said,
Jio’s offering saw record additions of seven new members per second, every single day for the last 170 days, enabling it to cross the 100 million mark within six months of commencement of services. This growth is the fastest achieved by any technology company in the world, including the likes of Facebook, WhatsApp, and Skype.
How significant this achievement has been can be understood by the M&A strategies the other companies in the industry are employing just to be able to compete with Reliance Jio.
There is no doubt that this growth and acquisition of customers at such a pace has been because of the introductory offer introduced by the company that offered free 4G data and voice calls for all its users. Fearful of the uncontested domination such an offer would afford Jio (around 70 percent of the industry’s revenues come from voice), India’s biggest mobile network operators appealed its illegitimacy to the Telecom Regulatory Authority of India (TRAI). But TRAI found Jio’s offer to be legal and instead levied massive fines on Bharti Airtel, Vodafone, and Idea Cellular for trying to undermine the Reliance Industries Limited (RIL) subsidiary by not providing sufficient points of interconnect to its SIM card users.
While the rest of the industry is still wondering how they are going to fight it out with Jio and stop its exponential growth, Jio is ready to offer a ‘gift’ to all its current users (if free 4G data and voice calls wasn’t enough). Reliance Jio is now looking to woo its subscribers with ‘Jio Prime Membership’.
The existing 100 million-plus Jio subscribers can avail of the special ‘Jio Prime Membership’ programme, which comes with several special benefits.
- Jio Prime Members will be able to enjoy unlimited benefits of the existing Jio Happy New Offer for another year or till March 31, 2018, for a nominal, one-time enrolment fee of just Rs 99 and a rock-bottom introductory price of only Rs 303 per month or effectively at just Rs 10 per day
- The programme will enable Jio Prime Members to enjoy the full bouquet of Jio’s applications absolutely free till 31 March 2018. This translates to additional benefit worth over Rs 10,000 for the Jio Prime Members.
Jio Prime Members will enjoy other attractive deals and offers from both Jio and its partners. The Membership is available only for existing Jio customers and the enrolment window will remain open from March 1 to 31, 2017. Enrolment for Jio Prime Membership can be done through MyJio app, the www.jio.com website, or in one of the partner stores.
Fuelled by an investment of Rs 1,50,000 crore and backed by partnerships with eight global carriers — British Telecom, Deutsche Telecom, Millicom, MTS, Orange, Rogers, TeliaSonera and Tim — Jio has successfully created the largest only 4G and LTE networks not only in India, but in the world. A 2,50,000 kilometres route of fibre optic cables and 90,000 eco-friendly 4G towers work to provide unmatchable 4G coverage in all of India’s 22 telecom circles (call zones which differentiate between local and STD calls).
While all the existing network providers are using a modified 2G/3G infrastructure to provide 4G in India, Jio has set up a Greenfield network (created from scratch) that offers higher bandwidth and faster speeds. The Jio network is also future-proof and capable of offering 5G and 6G connectivity as and when the technology materializes.
One question that still troubles a lot of people is how does Jio plan to make profit?
From what it appears right now, Mukesh Ambani is banking on the future rather than looking for a short term profit.
Despite having a massive user base, internet penetration and speed in India is woefully low when compared to other countries. Only about 24.3 percent of the Indian population accessed the internet through mobile phones in 2016. But the figure is expected to rise to 37.4 percent in 2021 as the Indian population, particularly in rural areas, becomes progressively ‘digital’. As an increasing number of people will require mobile and internet connectivity in the coming decade, Reliance Jio will be in the prime position to capture the massive untapped market.
Will Relaince Jio and Mukesh Ambani win with their high risk high reward strategy? Let us know your views in the comment section below.