Three years after launch, Reliance Jio is ready with more disruptions

At the heart of Reliance Jio Infocomm’s (RJio) success, undoubtedly, is disruption. Three years after it started commercial operations, the company, led by billionaire Mukesh Ambani, is now the country’s largest operator by subscribers.

Long story short

When it launched services on September 5, 2016, RJio, the latest entrant in the telecom sector, was just another beginner backed by behemoth Reliance Industries Ltd (RIL).

Now, with a subscriber base of more than 340 million, RJio has emerged as the second-largest and the fastest-growing telecom operator in the world. (China Mobile Communications Corp, with 900 million subscribers, is the largest.)

For the quarter ended June 30, 2019, RJio’s net profit jumped 45.6 per cent to ₹891 crore from ₹612 crore a year ago, as it reported a market share of 31.7 per cent Adjusted Gross Revenue (AGR).

On AGR terms, the company has become the largest in the country, according to Telecom Regulatory Authority of India (TRAI) data. RJio, a wholly-owned subsidiary of Reliance Industries (RIL), is also hailed for making 4G a dominant technology in India, adoption of Internet Protocol version 6 (IPv6) and increase in data consumption and penetration.

“The company’s success rides on the fact that RJio offered voice services free, while data pricing was very competitive and affordable. In addition, the geographical reach of its services was also commendable, while the network coverage and capacity have increased over these years,” Rajan S Mathews, Director-General at Cellular Operators Association of India (COAI) told BusinessLine .

RJio is also signing up more than 10 million new customers every month, and is looking at a 500 million-customer mark. While the company did not specify a timeline for the 500 million users, analysts peg it to be roughly two years away.

Broadband access

“Today, India is ranked 155th in the world for mobile broadband Internet access, out of 230 countries. Jio is conceived to change this. I have no doubt that with the launch of Jio, India’s rank will go up to among the top 10,” RIL Chairman and Managing Director Mukesh Ambani said at the company’s AGM in September 2017.

India had the world’s highest data usage per smartphone at an average of 9.8 GB per month, and was expected to double this to 18 GB by 2024, per Ericsson’s Mobility Report released in June this year.

“The opportunity for RJio is huge because it’s not about a consumer’s home broadband but it’s a chance to serve the under-penetrated SME market and large enterprises and brining in IoT applications. RJio is the only company with a complete portfolio — from devices to cloud,” Neil Shah, partner and research director at Counterpoint Research, said. RJio had entered into a series of partnerships for its digital initiatives. In July this year, RJio and Facebook announced a digital literacy initiative named ‘Digital Udaan’ to offer digital literacy and understanding of the Internet. Later, in July, RJio partnered with the GSM Association to bridge the gender gap in digital adoption and digital literacy among women in India.

On August 12, RJio and Microsoft inked a technology deal.

“The partnership with Microsoft with enable the company to bundle cloud with broadband connectivity to SMEs, a move that will help small industries transform digitally much faster. The biggest benefit RJio will bring is in digital commerce by providing points of sale for kirana stores, bringing them online,” Shah added.

RIL and group companies have invested in as many as 18 companies (see table) in an attempt to expand their digital presence and build capabilities. This included Haptik, a conversational AI platform, which counts Samsung, Coca-Cola, Future Retail and Mahindra Group as its marquee clients.

Jio Fiber

The next disruption from RJio is ‘Jio Fiber’, which promises free voice calls for life from landlines, minimum 100 MBPS broadband speed at subscription rates starting from ₹700 a month and free HDTV sets on a commitment to an annual plan. The services are set to be rolled out on September 5, coinciding with its third year of operations.

Jio Fiber promises free voice calls for life from landlines, 100 mbps minimum broadband speed at subscription rates starting from ₹700 a month and free HDTV sets on a commitment to an annual plan.

The company’s plan is to reach 20 million residences and 15 million business establishments across 1,600 towns, while it intends to install the world’s largest blockchain network in the next 12 months.

“Broadband is the focus for all mobile and cable operators, and to provide quality service, maintain high-speed and throughput, they need fibre connectivity to both to towers and homes. All operators are now focusing on fibre and looking at how soon they can provide connectivity, and now there will be an opportunity for sharing of these assets too,” COAI’s Mathews added.

RJio is also setting up a pan-India Edge Computing and Content Distribution network, as it readies to bring the Internet of Things (IoT), home broadband, enterprise broadband and broadband for SMEs.