Republic Day 2018 | Jio the Good Life

2017 changed the landscape of Indian telecom industry, which once boasted of lowest voice tariffs across the world. Courtesy Mukesh Ambani, voice call on mobiles is now free for lifetime. This paradigm shift was triggered with his new telecom venture Reliance Jio, which entered the fray in September 2016 with its 4G services, where voice calls were free and data was being offered at dirt cheap prices.

Since then, there’s been no looking back. It earned the distinction of garnering 100 million users within months of launch. With the virtually free data, India has now been placed as one top data consuming markets in the world.

Ambani is now being credited for taking internet to the masses. This is his second stint in telecom. In 2002, Reliance Infocomm was launched which also created a wave in the industry that time. But, he had to part with his pet telecom project after the split of the empire between the two Ambani brothers. And interestingly, the big brother is now buying the wireless assets of Reliance Communications, which he had to part ways with after the split.

At events during the past year, Ambani has mentioned that India is now number one in the broadband connectivity index as against 150th before Jio’s launch. “Data is the new oxygen, new oil for 1.3 billion Indians. Our aim is to not only provide high-speed data at affordable prices, but also affordable smartphones to help people connect better with the Internet.” 

For competitors such as Bharti Airtel, Vodafone, Idea Cellular, this meant an aggressive competition, wherein they were forced to match every offer doled out by Reliance Jio. This also led to a consolidation phase where mergers and acquisitions played out, and where only four private players will be left apart from a telecom PSU.

Though, mobile consumers had a gala time after the launch of Reliance Jio, the financials of the telecom industry saw declining profits and margins. No wonder, Ambani led the list of ‘Global Game Changers’ by Forbes in 2017 because of his accomplishments with Reliance Jio. His business strategies and style of working has a big influence on many in India as well as across the world. The list included business leaders who are ‘unsatisfied with the status quo’ and transforming their industries and changing the lives of billions of people around the globe. 

Pertinent to mention here that, it took six years of planning before the actual launch of services by Reliance Jio. A whopping $30 billion has gone into this venture and it turned profitable in the third quarter 2017-18. Not only 4G services, Ambani also rattled the handset market with the launch of his own Jio Phone, a 4G feature phone. The new phone was ‘effectively cost zero’ as buyers would be able to get the device for a one-time refundable security deposit of Rs 1,500. This was done to tap the feature phone market, which is over 500 million. 

After creating a disruption in telecom, he has his eyes focused on e-commerce. Contrary to Amazon’s and Flipkart’s high investment plans towards online segment, Ambani has zeroed in small kirana shops to create a wave in this space. He has plans to link manufacturers and kirana stores to his Reliance Jio subscribers.

Reliance Jio will offer its subscribers digital coupons to buy goods at kirana stores at discounted rates. It will not spend its own money on discounts. It will only mediate between manufacturers and kirana stores to benefit its subscribers. Also, there would be set of digital tools, which will be rolled out for small retailers. It will help rural entrepreneurs to benefit from its 4G network. A pilot project would be implemented in West Bengal first and then taken across the country. In fact, RIL’s 4G foray with RJio is being looked upon as a major driver of online retailing for the company given its penetration and reach across the country thereby changing the face e-commerce in India in the coming years.

Reliance Retail enjoys a leadership position across most formats it operates in. The company is gearing up to become the largest online retailer challenging the likes of Amazon and Flipkart who are currently fighting for the top position in the country. The main business, though, continues to be oil, refining and petrochemicals. In 2010, he built the world’s largest petroleum refinery at Jamnagar. Both petrochemicals and refining business continues to grow at a strong pace giving the liberty to pump cash into telecom and e-commerce business.

In June last year, RIL, in partnership with BP Plc, announced investment of Rs 40,000 crore over next 3-4 years in its KG blocks. Benefits of the large investments in petrochemical business are beginning to show with the segment reporting its highest ever earnings during the third quarter ended December 2017, the company said.