IMPACT OF RELIANCE JIO ON INDIAN TELECOM INDUSTRY

SUBMITTED TO
CHITKARA BUSINESS SCHOOL (BBA – BCOM department)

INTERNAL EVALUATION OF BUSINESS STATISTICS

RESEARCH PAPER
IMPACT OF RELIANCE JIO ON INDIAN TELECOM INDUSTRY

SUBMITTED TO:- SUBMITTED BY:-

DR. RAJINI BALA APURVA 1820993024
KUNAL 1820993059
LOVELEEN 1820993062
TANIYA 1820993117

CHITKARA BUSINESS SCHOOL

CHITKARA UNIVERSITY,2020
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ACKNOWLEDGEMENT

It was a great experience working on a research paper. We would like to thank DR. RAJINI BALA for
giving us the opportunity and guiding us throughout the work. We would also thank the respondents and our
friends who helped us collect all the necessary information for our research.
We gained knowledge on the subject and also got to know in detail about the techniques of data collection
and way of writing the research. We gained in depth knowledge about our topic and also new about the
customers data. The assignment was completed on time and submitted as per the guidelines provided.
We would surely use the knowledge gained during our further studies and make the best use of it.

SIGNATURE
APURVA, KUNAL , LOVELEEN, TANIYA
1820993024,1820993059,1820993062,1820993117
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CONTENT
S.NO PARTICULARS PAGE NO.
1. INTRODUCTION 4-5
2. REVIEW LITERATURE 6-7
3. RESEARCH METHODOLOGY 8-9
4. DATA ANALYZES 10-
5. CONCLUSION
6. REFRENCES
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INTRODUCTION

Abstract
Indian mobile industry is one of the fastest growing industries in the world. Indians are habituated to
touch mobiles within a short span of a time. In the world India is second largest market for mobile
service providers and it is a good avenue for network providers from indigenous and exogenous
entrepreneurs. Not only Indian network providers but also global providers occupied and earn
significant market share in the Indian mobile industry. Reliance Jio’s free tsunami creates lot of radical
and unexpected changes in consumer’s behaviors and competitor’s strategies. The impact of this new
entrant affects equilibrium in the mobile industry and makes rivals vulnerable that they resort to
mergers and acquisitions in Indian mobile network providers. The major giants in the industry viz,
Airtel and Idea strategically responding in a similar way. To strengthen themselves in the industry,
Airtel and Idea acquiring Telenor and Vodafone respectively. The present research paper makes an
attempt to examine the impact of new entrant R-Jio on competitive strategies of rivals in the industry.
Keywords: Mergers and Acquisitions, Indigenous &Exogenous and Price sensitive.

Introduction
The rain bow of Indian telecommunications sector is one of the backbones for fast growth in all aspects of
Indian economic scenario of this decade. In the world, telecom industry is most developing and profitable
industries of the world. Different forms of communication media such as smart phones, internet, Wi-Fi,
broad band services are dealt in communication industry. It creates remarkable changes in the minds set of
consumers, business entities, legal frame work, ideologies of entrepreneurs, philosophy of the government’s
policies and procedures. It is a mega path for new waves to open employment opportunities, better standards
of living with fast communication as a global village, and accumulation of its share in our GDP
continuously. The telecom operators continue to focus on providing a high quality, consistent network
experience offering the speeds and coverage expected by customers.Net work techno-providers are expected
to do more to leverage their potential in usage analytics, packet probing and pushing content based offerings,
all in a bit to protect
their challenged revenue base. The Indian regulatory authorities are likely to face new challenges from these
new trends and keep their commitments for providing a quality service, doing so transparently and
responsibily. Our market will settle on five major sector players and one state owned one. The infusion of
Jio free creates new combinations may come in form of outright mergers or spectrum sharing’s such as
recently announced by Idea,Vodafone and Airtel-Telenor. These two new consolidations exists with many-
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fold manifestations like one is sustainability or remove from battle field and another one is to compete with
free gigantic market leader and so on. Because of its immense importance, the proposed research is going to
explore the mergers and acquisitions in Indian telecom sector.
Telecom sector is one of the fastest growing industry in the world, it has immense capacity to serve the
people directly or indirectly. Telecom sector provides business and job opportunities to the people and help
in increasing GDP of the country. In India the telecom sector is flourishing and growing at the rapid pace
from last five years. The sector like telecom, education and hospital is affected by the population of the
country, India has very large population base in comparison to the other countries of the world. India is
currently the second-largest telecommunication market and has the third highest number of internet users in
the world, the telecommunication sector has various associates who are making the picture perfect, like the
mobile manufacturers Indian as well as foreign companies who are either having manufacturing units in
India or exporting to India. The companies who are having license of the mobile spectrum and serving the
Indian market with their services voice and data. The other associates’ falls under service segment like
mobile repairing and recharging the voice and data services to the mobile subscriber, as the technology
upgrades the new mobile devices are coming to the market the shops selling smartphones from different
vendors as multiband shops as well as branded shops for specific mobile brand. India is currently the world’s
second-largest telecommunications market and has registered strong growth in the past decade and half.

From the above facts and figures it is made clear that Telecom subscriber base expands substantially in
India, whether mobile device manufacturer, mobile service provider, foreign investment etc. is targeted to
the Indian market. In this contemporary scenario the market is full of alternatives to the customer it is a
buyers’ market with a lot of alternatives to choose either mobile devices or service provider. More or less the
market is stable people are having their mobile connection and enjoying the services of voice and data from
their respective providers. The Reliance has given a new alternative to the customers in the name of “JIO”.
Jio is the brand from the Reliance with its pre-launch offer to the customer voice and data free up to certain
time and with own brand “LYF” smartphones to the market. The “Jio plans” and “LYF” brand are available
with a wide range of alternative choices and range.
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REVIEW LITERATURE

Twenty papers were considered for literature review to gain knowledge about customer preference, customer
satisfaction in mobile network service providers. From that 4 papers were eliminated from consideration due
to insufficient information for the concern study.

Pritish and Saxena (2015), overall socioeconomic development of India is contributed significantly by
Indian Telecom Industry and it is a vital means for the advancement of a nation. Growth of industry is
increased by the several telecom service providers who bring the deal for data and voice facilities to the
consumers through diverse counties of the nation.

Kalyani (2016), in this review paper, composed facts and data are very vibrant that market is achieved by
“Reliance Jio Effect”. 15 to 25 years aged individual, bearing more end mobile devices for collaborating and
amusing requirement. They are making use of the smartphone for the purpose of gaming, online purchase,
instant messaging and so on, and using for “free” data and voice Reliance has directed the same. In
worldwide area, Reliance Jio connection has built its network in a very short time frame and don’t have the
roaming data from one vendor to other vendor.

Boobalan and Jayaraman (2017): The service provided by Jio customers are satisfactory as customer is the
backbone of the company treating the customers as a friend is one of the best way to attract them and make
them always come back. It will help in building strong businesses relationship. In this study it is found that
there is an important bond between income and gratification and there isn’t any noteworthy bond between
age and awareness level.

Haq (2017): Internet startups by more customers that have means is more internet users. Jio marketing
approach is pretty simple that attract the customers or users by free-calls and cheap data. It should not be
difficult for convenience to user to use more and more data because user habit is formed. Jio break the
record and drop the rates of other data and competition will drive with Idea, Airtel and others. In all over
country, Jio is going to be an explosion of new data users in next few years.

Mahalaxmi and Kumar N (2017) studied on a particular geographical region and concluded that Jio services
are same to all in spite of the people monthly income. The services provided by the Jio tariff like mobile data
and free calling were able to convince the students. In future, competitors (other network services) can
fluctuate the market by giving the competitive policies. Jio network support only in the 4G handset, not in
3G handset. If their offer will be for the 3G handset then Jio would be in high rate. This study was made on a
particular region. So, accurate result cannot be obtained. Future scope of Jio network, will face the
competition by more innovative marketing strategies.

Priya and Sathiya (2017), in this study, computing the stage of preference and satisfaction of Jio customer
and improving their network coverage and to wipe out the calling congestion by Reliance Jio Company that
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is recommends by researcher. By the comments of customers, Company can accomplish the 100%
satisfaction and also customers might notswitch over to other network that shall create willingness for
company.

Satyanarayana, Rao and Naidu (2017) proposed that the consumer’s behavior and competitors’ strategies has
been changed racially and unexpectedly by the introduction of Reliance Jio’s free. After providing the
services, other mobile networks are facing problems. To compete with Jio, there is need to make strategies
and to strengthen themselves in the industry.

(Gupta, 2015) , examined the perception of customers towards cellular phone services. His study revealed
that price is a very considerable factor for selecting any service provider with lowest price schemes and they
should concentrate on the problems which are faced by the customers like busy network, cross talks, range
of mobile connectivity.

(Shah, 2012) , examined Consumer preferences for mobile service providers – An empirical study in
Bardoli. His study revealed that large proportion of the respondents have chosenan MSP operators
recommended by their family members, friends and peers. His study also revealed that customers are very
keen on service quality and brand image.

(P. Vijay, 2016) ,examined Customer preferences towards the mobile network service provider – A study
with the special reference to Coimbatore city. Their study exposed that the majority of the respondents have
given top preferences to Airtel and least preferences to Aircel in preferring the network service providers.
Their study also revealed that their respondents had given top preferences to service quality, Value added
services in preferring the network service providers.

(Chakraborty, 2013) , examined Customer satisfaction and expectation towards Aircel, A research conducted
in West Midnapore. His study revealed that there is a big scope of further penetrating into the current market
scenario by more innovative marketing strategies. His study also revealed that, the people has less awareness
towards the usefulness of VAS, WAP, etc.

(M. Ashok Kumar) , examined a Survey on customer Perception of Mobile Phone Service Provider in
Tirupur District. Their study revealed that most of their respondents were using a particular service provider
for 2 -4 years. Their study is also exposed that most of their respondents preferred a network for cheaper call
rates.
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RESEARCH METHODOLOGY

OBJECTIVE OF STUDY

To study the demographic profile of the customers of Reliance JIO Mobile service provider.

To identify customer’s preference towards the Reliance JIO mobile service provider.

To know the customer satisfaction level towards Reliance JIO Mobile service provider.

To examine the impact of new entrant R-Jio on competitive strategies of rivals in the industry.

To analyze the major changes in Indian telecom industry

SCOPE OF STUDY

The suggestion from the study is based on the responses given by the consumers. This study will helpful in
getting an insight into the impact of consumer’s preference and satisfaction towards reliance JIO.

Our study was concentrated upon telecom providers namely Airtel , Jio , Idea, Vodafone and BSNL.

IDEA - Idea Cellular is the subsidiary of Aditya Birla group founded in the year 1995.The Idea has gone far
ahead of the major competitors and occupying incremental revenue market share of 33% from last three
years. Now Idea offers 3G and 4Gs LTE services on its own spectrum auction in 13 circles of telecom
service areas and 340 towns in all over the India. Idea strengthened its customer base after launching mobile
number portability. Idea is India’s third largest mobile operator and it has 191 million subscribers, Rs.354
Billion (US$5.3 billion) Revenue and Net income is Rs.31.92 billion(US$470million) for the year ending
31st 2016.In January, 2017 it was announced that Idea talks to merge with Vodafone in Indian operations.

Airtel-Sunil Mittal was founded Airtel in the year 1995.Airtel is an indian Global third largest
telecommunications company.it operates in 18countries and proveds GSM,3G and 4G LTE services with
400 million subsribers. Airtel was ramed India,s second most value brand in the first ever ranking by
“Milliward Brown and WPP plc.” Airtel is credited with pioneering the business strategy of out sourcing all
of its business opertations with minute factory model of low cost and high volumes. Its strategy has since
been adopted by several operators. The transmission towers are maintianed by subsidiaries of Bharti group.
Airtel served first time low call rates in India. The revenue of Rs. R966.021 billion, EBIT is Rs.341 with net
profit of Rs.54 billion for the year ending 2016.The Jio,s trumph have stung Airtel which reported a 55% fall
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in third –quarter net profit to Rs.504 crore.in 2016.it is the big moment to make restructuring it stategies to
compete the market leader with Telenor.

Vodafone- It is a Brtish based multinational telecommunications company.it was establised in the year
1991. Vodafone is now ranked in world second largest mobile operator in number of connections. It owns
and operates networks in 76 countries and also IT services to corporate clients in 150 countries. Vodafone
was entered in India sep.2007.It has been expands its operations across the country over all 22 telecome
circles and service to 203 million indian customers. This journeyis a strong testimony of Vodafones,s
commitment and succes in competitive and price sensitive of Indian mobile market. The free price war of
Reliance jio,s impact results accumulates continuous loss doubled to $5.5 billion from last two quarters of
2016.But its home market is a bright spot.

Jio- The Reliance Company commercially launched its services on 5 September 2016. Jio crossed 100
million subscribers end of February 2017. This is the fastest ramp-up by any mobile network operator
anywhere in the world. Jio owns spectrum in 800 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.
The spectrum is valid till 2035. The company has a network of more than 250,000 km of fiber optic cables in
the country, over which it will be partnering with local cable operators to get broader connectivity for its
broadband services. With its multi-service operator (MSO) licence. Jio offers its not only 4G broadband
services but also providies data, network, instant messaging, live TV, movies on demand, news, streaming
music, digital payments platform and free Wi-Fi hotspot services etc.

LYF Smartphones Jio tied up with domestic handset maker Intex to supply 4G handsets enabled with voice
over LTE (VoLTE) feature. Jio launched its own smart phone series with Earth, Water 1& 2, Wind and
Flame through its chain of electronic Reliance retail outlets.

Research Methodology

Descriptive Research Design is used in this study. This study adopts Non – Probability Convenience
sampling method, since the population of JIO users in Trichy region is unknown. Questionnaire method.

Data Collection Source

This study is carried out with both primary and secondary data. The primary data is collected through
structured questionnaire from a sample of 50 respondents from a specific area. Secondary data is also being
collected from articles, journals and websites.

Data Collection Tool

The Primary data was collected through a structured questionnaire comprising of mixed questions (open &
closed end, dichotomous, polychotomousandlikert scale questions)
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DATA ANALYSIS

We collected the data of 50 respondents in form of Google form.

The data is collected from family and friends. It involves various age group both male and female.
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Service provider:- As per the data of 50 respondents we got to know the service provider currently used by
them. There are only 34% of jio users. While the majority users are of airtel with 42%. There are few other
users also BSNL with 12% and Idea 8%. The data predicts that the current status has not impact much of the
service providers. There are variety of services provided still be used. Jio hasn't had much impact on Airtel
users as per current service provider records.
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Service type:- The data was collected from 50 respondents to know about there preffered mode of service .
40 out of 50 respondents were using prepaid sim . The rest 20% used post paid connection
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Reason for selecting the particular service provider?

The population had different reason for selecting there preferred network operator. 20% of the population
are using the particular network because of low cost. For 34% the quality of the service was there to priority.
14% went with the value added services provided along with the network. 9 of the people were influenced
by the friend and family circle. Only 3 were influenced by advertisement. 10 had influence of retailer on
their choice. 3 people had their personal reasons for using the particular service provider.
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SERVICE PROVIDER USED:- As per data the majority of users were of Airtel. The launch of Jio had
impact on major service provider but the airtel users were still in majority as per the current provider. But
combing the data of both we can know the change in airtel users was less compared to other service
providers. There was a huge impact of the launch of Jio on BSNL and Vodafone and idea, infact the launch
of Jio led to the merger of Vodafone and Idea. In the data the users of vodafone and idea comprised of
26.5% total while currently there are only 8% users of the both.
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SHIFT TO JIO:- As per the respondents we can see in the above picture that out of 50 respondents 64% did
shift their service provider to Jio. The data tells that at the time of launch people did shift and prefer Jio
which reflects that it had a huge impact in the telecom industry. The other service as per the survey did face
the loss from the shift to the Jio. Only about 36% remained to use the same old service provider.

CONCLUSION

India market is the world’s 2nd biggest telecom market and delivers job and business prospects to the people
which will aid in growing the GDP of the nation. On the other side, Reliance Jio is producing the most
widespread and futuristic connectivity in India. It will probably deliver the coming age group a legacy free
digital facilities with an attempt to end all IP network that can impeccably be elevated even to 5G or beyond.
Jio’s Mobile data services convinced most of the students to prefer this network. For small companies it is
difficult within the industry to create a noteworthy share in the market. The only choice to become mightier
to contend with Jio is to create tactical groupings with other contenders. In near future the contenders can
again vary the market by demonstrating competing policies.

Reliance Jio’s free introducing offer creates lot of radical and unexpected changes in consumer’s behaviors
and competitor’s strategies. The impact of this new entrant affects equilibrium in the mobile industry and
makes rivals vulnerable that they resort to mergers and acquisitions in Indian mobile network providers.
Since the exit barriers are present in the industry, they can not get out of the industry. It will be too difficult
for small players in the industry to make a significant market share. The only option to becomemore stronger
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to compete with Jio is to make strategic alliances with other competitors The major giants in the industry viz,
Airtel and Idea strategically responding in a similar way. To strengthen themselves in the industry, Airtel
and Idea acquiring Telenor and Vodafone respectively.

REFERENCES

Singh, R. (2017). Impact of Reliance JIO on Indian Telecom Industry: an empirical study. International
Journal of Scientific Research and Management, 5(7), 6469-6474.

Haq, N. (2017). Impact of reliance JIO on the Indian telecom industry. International Journal of Engineering
and Management Research (IJEMR), 7(3), 259-263.

Satyanarayana, D., Rao, K. S., & Naidu, S. K. (2017). The impact of Reliance Jio on Indian mobile industry-
A case study on mergers and acquisitions of idea–Vodafone and Airtel–Telenor. IJAR, 3(3), 209-12.

Mishra, K., & Tarannum, A. (1991). Impact of Reliance Jio on Indian Telecom Industry

Kalyani, P. (2016). An Empirical Study on Reliance JIO Effect, Competitor’s Reaction and Customer
Perception on the JIO’S Pre-Launch Offer. Journal of Management Engineering and Information
Technology, 3(5), 18-36.

Mahalaxmi, K. R., & Kumar, S. (2017). Changing the Indian telecom sector: Reliance Jio. International
Journal of Advanced Research and Development, ISSN-4030, 2.
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Mahalaxmi, K. R., & Kumar, S. (2017). A study on service quality and its impact on customer’s preferences
and satisfaction towards Reliance JIO in trichy region. International Journal of Advanced Education and
Research, 2(3), 35-41.