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In June 2015, Jio tied up with domestic handset maker Intex to supply 4G
handsets enabled with voice over LTE (VoLTE) feature. Through this, it plans to
offer 4G voice calling besides rolling out high-speed Internet services using a
fiber network, in addition to the 4G wireless network. However, in October
2015, Jio announced that it would be launching its own mobile handset brand
named LYF
On 25 January 2016, the company launched its LYF smartphone series starting
with Water 1, through its chain of electronic retail outlets, Reliance Retail .Three
more handset models have been released so far, namely Water 2 Earth 1 and
Flame 1.
JionetWiFi
Prior to its pan-India launch of 4G data and telephony services, Jio has started
providing freeWi-Fi hotspot services in cities throughout India
including Surat, Ahmedabad in Gujarat, and Visakhapatnam in Andhra
Pradesh, Indore, Jabalpur, Dewas and Ujjain in Madhya Pradesh, select locations
of Mumbai in Maharashtra, Kolkata inWest Bengal,Lucknow in Uttar
Pradesh,[41] Bhubaneswar in Odisha, Mussoorie in Uttarakhand.Collectorate's Office
in Meerut,[44]and at MG Road inVijayawada among others.
In March 2016, Jio started providing free Wi-Fi internet to spectators at six cricket
stadiums hosting the 2016 ICC World Twenty20 matches. Jionet was made available
inWankhede Stadium (Mumbai), Punjab Cricket Association IS Bindra
Stadium (Mohali), Himachal Pradesh Cricket Association
Stadium (Dharamshala), Chinnaswamy Stadium (Bengaluru), Feroz Shah
Kotla (Delhi), and Eden Gardens (Kolkata) in India
Jio apps
In May 2016, Jio launched a bundle of multimedia apps on Google Play as part of its upcoming 4G
services. While the apps are available to download for everyone, a user will require a Jio SIM card to
use them. Additionally, most of the apps are in beta phase. Following is a list of the apps
MyJio - Manage Jio Account and Digital Services associated with it.
JioTV - A live TV channel service
JioCinema - An online HD video library
JioChat Messenger - An instant messaging app
JioMusic - A music player
Jio4GVoice (earlier JioJoin) - A VoLTE phone simulator]
JioMags - E-reader for magazines
JioXpressNews - A news and magazine aggregator
JioSecurity - Security app[
JioDrive - Cloud-based backup tool]
JioMoneyWallet - An online payments/wallet app
JioSwitch - Transfer content
Affordable 4G Phones
Reliance Jio has teamed up with Google to manufacture affordable 4G handsets. These
phones will run exclusively on Jio network.The two companies are also working on
developing a software for smart-TV services. Both are expected to launch in 2017.
JioFi
Later in July, a PIL filed in the Supreme Court by an NGO called the Centre for Public
Interest Litigation, through Prashant Bhushan, challenged the grant of pan-India licence
to Jio by the Government of India. The PIL also alleged that Jio was allowed to provide
voice telephony along with its 4G data service, by paying an additional fees of just 165.8
crore (US$26 million) which was arbitrary and unreasonable, and contributed to a loss
of 2,284.2 crore (US$360 million) to the exchequer.
The Indian Department of Telecom (DoT), however, refuted all of CAG's claims. In its
statement, DoT explained that the rules for 3G and BWA spectrum didn't restrict BWA
winners from providing voice telephony. As a result, the PIL was revoked, and the
accusations were dismissed
Strategy of Reliance Jio in 3 points
1) Quality Subscribers: Analysts doubt the strategy of Reliance by citing that that with its
schemes Jio will attract low quality, treacherous customers who will jump to other networks
once the freebies end. But Reliance doesnt believe so. It is offering free 4G data which means
itll occupy the primary sim slot in the smart phones 4G phones. Also customers will switch
to Jio from their broadband or the Wi-Fi services and possibly will stick to it even after the
promotion period ends. In addition to that it is offering free calling, so it is aware people will
be using the number for calling purposes for the next three months. Three months is a
sufficient time span for people to experience the super fast speed and the quality services and
permanently transfer to the network. Now assume that Jio reaches 75% of its planned
subscriber base of 100 million. So by the end of the year, Reliance ends up with 75 million
subscriber base. Indias total 4G user number is believed to touch the mark of 143 million by
this year end. So within 3 months of its official launch, Jio would have acquired more than
50% of the market share. Even if many subscribers leave the association with Reliance, still
Reliance would be left with significant market share. What an Idea, Reliance!
2) 100 million mark: Mr. Ambani has expressed his ambitious plans of
to reach 90% of Indias population. The company plans to acquire 100
million subscribers in the first year of its launch. By luring the population
with free data and calls for the initial few months, many doubt if this
could result in financial gains for the company. But by doing this it is
stretching its operational and strategic bandwidth. Reliance Jiyo has
pumped total 1.5 lakh crore for 4G. Reliance Jios 4G network will
cover 18000 cities and town and over 2 lakh villagers. Now assume 50%
of the users opting for 149 Rs plan and the remaining for higher price
plans, Reliance can easily make 400 Rs per customer. If Jio manages to
acquire a subscriber base of 100 million customers, itll recover the
cost within 5 years and start reaping huge profits after that (only if the
existing technology doesnt obsolete!) Mukesh Ambani is betting on one
single thing: User base.
3) Oligopolistic market: The market for service providers is oligopolistic where
the participants fight for market share and profits on the basis of prices and
differentiated products. Reliance jio has both. It has differentiated its product by
setting up a huge bandwidth to handle the traffic of enormous data. And the plans
they are offering is at amazingly cheap rate. Masses are overwhelmed by the
announcement of unlimited free calling. Jio has an IP network hence all the calls
will be routed through internet just like whatsapp calls and skype calls. And once
the huge optical fibre network infrastructure is built, there isnt any marginal cost
for the company for providing call service. In an oligopolistic market if some player
creates such kind of ripple it forces other players to slash the prices. The strategy of
other players in the market is solely dependent on Relaince Jiyo. Well played Jio!
The approach of Reliance Jiyo is benefiting the customers as they are getting twice
the value for money while the Reliance is confident that this will garner hefty
profits in the coming future. It is a bold move by Reliance and only time will decide
its impact. Till then enjoy the free 4G internet.
HIGHLIGHTS
Vodafone had over 200 million subscribers and Idea about 177 million subscribers in August while the
subscriber count of Aircel stood at 89.7 million. Telenor's came in at 53.2 million and that of state-owned
MTNL was about 3.6 million at August-end.
Bharti Airtel's broadband base (3G+4G) read 35 million. Vodafone and Idea together have 25 million
broadband users.
They achieved these numbers in about 15 years while Jio has got 16 million broadband users in less
than a month.
During the first week of launch, Jios applications were ranked within top 15 in Google Play store and
Apples Appstore.
HIGHLIGHTS
Future plan to bring 1Gbps broadband to 100 Indian cities is unlike any in the world today.
BSNL is the only company that might put up a challenge to RILs plans because theyre the only
broadband operator offering 100Mbps plans in 97 cities. In terms of bandwidth, however, they will
be off by a factor of 10.
Considering the above, 1Gbps coverage in 100 cities will truly revolutionise internet access in India.
HIGHLIGHTS
Biggest fiber optic network Reliance Jios sign-up process is completely digital
has laid 250,000 Kms of high quality fiber as they are using Aadhaar card based e-
optic cable and established a network KYC process, which takes only a few
capable of handling even 5G with ease , minutes to complete. This paper-less eKYC
covering 18,000 cities and over one lakh process has been launched across 4100
villages, with the aim of covering 100% of cities and towns.
the nations population by 2018.
HIGHLIGHTS
Nationwide
free voice
calls to any
network. No
roaming.
Call sent as data (VoLTE) This Jio SIMs are available free of cost. You
is a first in the Indian market and need not pay any price to any dealer to get
specifically designed for 4G your SIM. Even the Jios services like
technology. They will send calls in data, voice, video and other applications
the form of data through 4G itself. are available free of cost till 31st of
The experience would be December 2016.
something like a Skype call in
much better quality.
FACTS- GROWTH OF INTERNET USERS IN INDIA
Indias telecom network is the second largest in the world based on total number of telephone
users
(both fixed and mobiles). Mobile phone user base of 929.37 million.
It has worlds third largest Internet user base. According to DoT,as on March 2016, India has
302.55 million internet connections.
5 Myths about a Reliance Jio 4G SIM
Myth-1. SMS is unlimited
While Reliance Jio announced that the SMS will be free on its network, the detailed tariff
plans make it clear that there is a cap on the number of SMS that one can send.
For the tariff plans between Rs. 19 and Rs. 149, the subscribers can send a maximum of
just 100 SMSes on the whole. This means for 28 days. Users of tariff plans priced Rs. 299
and above can send up to 100 SMSes per day.
Myth-2. Unlimited night data
This is again a myth. The tariff plans state that there will be unlimited night data and it
might seem to be a nice deal. But, you need to keep a check on the time. The unlimited
night data usage is applicable only between 2 AM and 5 AM.
Bascially, it is only for three hours a day and that too at the wee hours of the day.
Myth-3. Enjoy unlimited data plan
Enjoy unlimited data plan This is a point that has to be noted. Everyone believes that there
is unlimited 4G data plan under each tariff that Reliance Jio is offering.
But, you need to understand that you will not get super fast connectivity after 4 GB data
usage per day. Once you cross this limit, the data speed will reduce to 128 kbps.
Myth-4. Jio apps access is totally free
Reliance Jio claims that users can enjoy unlimited access to its apps and the services.
The Jio apps include JioCinema, JioTV, JioMags, JioMusic, JioNewspaper, JioCloud, and
JioSecurity. The company is offering a free subscription for these apps until December 31.
However, the fact o note is that he usage of these apps will be counted again your data.
Moreover, these apps can be accessed only while you are connected to the Jio network and
not to Wi-Fi.
Myth-5. Rs. 50 per GB
There is a belief that Jio will offer Rs. 50 per GB of 4G data. But, you need to understand that his is
not for the cellular data, but only to JioNet.
Along with 4G services, Jio will be deploying public hotspots called JioNet.
For every plan, you will get cellular data and data that can be used when tethering to JioNet.
You will get Rs. 50 per GB of data only on crossing the limit of JioNet usage and not cellular data.
APPLICATION
OF
STRATEGIC COST MANAGEMENT
CONCEPTS
SWOT - STRENGTH
Low tariff
Company has launched its 4G service with highly competitive or rather very low
tariff. Company has strong financial capacity to withstand initial losses
Brand Name
Brand Value of company is very high.
SWOT - WEAKNESS
Late entry into telecommunication sector
The telecom sector had grown exponencially in its initial phases which started around two decades
earlier. Presently market has seen only modest growth and it has become highly competitive due to
entry big players such as Vodafone, Idea etc.
TIME
Quality
Functi-
onality
36
Calculation of Value
Value = Perceived Benefits/Price or cost to the Customer
To increase value, increase the benefits or decrease the price
Preferably do both
Decisions in the Value Chain: Vertical Integration Vs. Outsourcing Jio
started making Handsets too under the brand name LYF
Jio followed to keep price low thereby increasing the value
37
Sales & Marketing
Pricing: Reasonable
Brand Loyalty: Customers may switch to old service providers after
utilizing the free services.
Stores and Galleries Outlets for superior customer service
Marketing at low cost
38
Service
Support:
Call centre
Online
Galleries and stores
39
Strategic Alliances
JioMoney, the PPI wallet offered by Reliance Payment Solutions Ltd, and Uber
announced an agreement that will enable Uber riders to pay for their rides using
JioMoney and thereby enhance the digital transaction ecosystem in India.
This leads to long term win-win situations for Jio and Uber.
Nine operators have come together to build a new partnering operator alliance
that will allow partner businesses to more efficiently bring products and services
to customers around the world. Members of the alliance include BT, Deutsche
Telekom, Reliance Jio Infocomm Limited, Millicom, MTS, Orange, Rogers,
TeliaSonera and TIM. It is expected that it is via these companies, a potential
customer base of around 1 billion customers in more than 80 countries can be
40 reached.
Cost Drivers: Structural
Scale Reliance alone added over 16.2 million in November 2016 taking its total
subscriber base to 51.87 million within three months of launching its
commercial services .
Scope Vertical Integration looks high as it has In June 2015, Jio tied up with domestic
handset maker Intex to supply 4G handsets enabled with voice over LTE (VoLTE) feature
Experience Has good experience as its presence in country it more than 6 years.
Technology Reliance Jio has the longest fibre optic network in the country, ranging over 2.5 lakh
kilometers of fibre
Complexity Has many tariff plans however plans like 303 and 309 seems good number of
subscription
41
Cost Drivers: Executional
Work Force Involvement Well trained representatives helps to build strong relations with customers
Capacity Utilization
Layout Efficiency Jio owns spectrum in 850 MHz and 1,800 MHz bands in 10 and 6 circles, respectively, of
the total 22 circles in the country, and also owns pan-India licensed 2,300 MHz spectrum.
This makes the Jio to enable services all over India
Product Configuration Apple is known for fulfilling the customers requirements before the customer
themselves know about it
42
Revenue Management
Faster Cheaper Better Mantra
Jio adopted the Cheaper and Better mantra
Attracting more subcribers
Performance Evaluation through EVA
On On
the the
mendmend Star
Star Performer
Performer Jio is at
(Reward busniess
(Reward
for for
improving) (Reward for
(Reward for
vialibility
improving) performing)
performing) category ,
EVA
however , soon
will in the on
the mend tab
when revenues
Business viability
Business viability under Living
Livingon
on past glory
past glory will be initiated
under doubt (No .
doubt (No reward) (No
(No reward)
reward)
reward)
44 EVA
Balanced Scorecard
Financial
Perspective
Learning &
Growth
45
Internal Business
Customers Peers
People started using Internet
Free services for voice call, sms
Get more into strategic alliance to reach out to customers
Financial Perspectives
As of now negative EVA evolved , but this will be taking U- turn soon.
Expected returns at 1000000000 subscibers
http://www.ril.com/DownloadFiles/ComposingFinalFiles/Reliance%20Jio%20Infocomm%20Limited.pdf
Biblography:
http://economictimes.indiatimes.com/news/company/corporate-trends/reliance-jio-expects-to-gain-over-50-per-cent-of-revenue-
market/articleshow/57445933.cms
http://www.ril.com/DownloadFiles/ComposingFinalFiles/Reliance%20Jio%20Infocomm%20Limited.pdf
https://www.quora.com/What-is-the-business-model-of-Reliance-Jio
https://en.wikipedia.org/wiki/Jio
SUGGESTIONS
Though competitive tariff is very important to become an important player in the market, the
customer satisfaction is equally or even more important for long term perspective. Handling
customer grievances in effective way and continuous improvement based on customers feedback
are key priority areas to become a dominant player in the market. For eg. BSNL could not be a
dominant player in market due to poor customer satisfaction even though tariff is highly
competitive.