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Reliance Jio: Disrupting the Indian Telecom Industry

Reliance Jio: Disrupting the Indian Telecom Industry
Case Code: BSTR519
Case Length: 15 Pages
Period: 2016-2017
Pub Date: 2017
Teaching Note: Available
Price: Rs.500
Organization : Reliance Industries Limited
Industry :Telecommunications
Countries : India
Themes: Business Strategy
Turnaround of Indian Railways: A Tough Road Ahead?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about how Reliance Jio Infocomm Limited (Jio) rose to become one of the leading telecom networks in India. Jio has captured a large market chunk and achieved numbers that took the competition over a decade to achieve. It is India’s only network which is solely 4G and its USP is the free services that it offers. The company adopted a predatory pricing strategy to enter the Indian telecom market and offered free voice, data, and message services in the name of its “Welcome Offer” from September 5, 2016, to up to December 31, 2016. Later, the offer was extended up to March 31, 2017, as the Happy New Year Offer. Reliance’s move disrupted the competition in the Indian telecom sector and major competitors like Airtel, Idea, and Vodafone were facing huge losses and framing defense strategies to sustain their market share. They were forced to resort to lowering their tariffs with an eye on retaining customers. They also tried to block Jio sales by submitting petitions to the Indian Government and TRAI against the offers of Jio.

But the chief of Reliance Jio, Mukesh Dhirubhai Ambani (Ambani), was undeterred by the competitors’ moves and announced that Jio had crossed 100 million subscribers. Jio offered different apps like movies, music, chat etc. which could be used with the Jio SIM. The subscription process for the Jio SIM was also simplified and there was a huge response from Indian customers. Jio faced certain challenges like sharing of telecom spectrum, problems with other players related to Points of Interconnection, declining internet speed, number portability, etc. Apart from that, Jio planned to start its commercial operations from April I, 2017, by charging the customers under different tariff plans. The crucial challenge for Ambani was to hold on to Jio’s subscribers even after the free offers expired. He has the big responsibility of framing an efficient customer retention strategy after March 31, 2017...

Issues

The case is structured to achieve the following teaching objectives:

  • Analyze the market penetration strategy of Reliance Jio
  • Understand the issues and challenges faced by Reliance Jio in sustaining the market leader position of the Indian telecom industry
  • Examine the efficacy of predatory pricing in enhancing brand image and sales
  • Study the impact of Reliance Jio on its competitors
  • Discuss and debate the future challenges of Reliance Jio

Contents

Keywords

Reliance Jio,Indian telecom industry,Predatory pricing, Welcome Offer,Voice over long-term evolution (VoLTE),Happy New Year Offer,Competition,Disruption

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