Reliance Jio's Audacious Bet: Disrupting India's Mobile Telephony and Data Market

Reliance Jio's Audacious Bet: Disrupting India's Mobile Telephony and Data Market
Case Code: BSTR547
Case Length: 20 Pages
Period: 2017
Pub Date: 2018
Teaching Note: Available
Price: Rs.500
Organization: Reliance Jio Infocomm
Industry: Telecommunications
Countries: India
Themes: Disruptive Innovation
Reliance Jio's Audacious Bet: Disrupting India's Mobile Telephony and Data Market
Abstract Case Intro 1 Case Intro 2 Excerpts


The Journey of Jio

Reliance Industries Limited (RIL) was started by Dhirajlal Hirachand Ambani (Dhirubhai) as Reliance Trading Corporation (RTC) in 1958 with just Rs. 50,000. Prior to this, Dhirubhai had worked as a petrol pump attendant and then as a clerk in an oil company.

In 1966, Dhirubhai set up his first textile mill turning out polyester cloth under the Vimal brand.

In 1976-77, RTC recorded an annual turnover of Rs. 700 million...

Jio's Big Bang Disruption

Having established the infrastructure, Jio had to overcome the next hurdle of acquiring customers. The company planned to lure consumers by offering high speed mobile internet at affordable prices. As of 2015, less than 15 percent of the Indian population had access to 4G connectivity. Jio had ambitious plans to offer 4G connectivity to 90 percent of the Indian population by 2017....

The Jio Effect

By the end of September 2016, Jio had successfully disrupted the market, garnering 16 million subscribers – an all-time record for any telecom player. In addition to this, the demand for VoLTE enabled handsets was increasing. According to a report by market research firm, Counterpoint Technology, 80 percent of LTE compatible smartphones shipped during the July-September quarter (Q3) were VoLTE enabled, as compared to 63 percent in Q2 and 30 percent in Q1....

Allegations Against Jio

The telecom companies considered Jio’s offer as being anti-competitive and predatory. Airtel and Idea complained to the TRAI and urged it to look into the matter. In response to these allegations, Jio stated that these promotional offers would only be valid up to December 3, 2016. According to the TRAI directive, promotional offers could be allowed for up to 90 days...

Competitors Follow Suit

With Jio increasing its subscriber base by the day, competitors gave in to the price pressure. In January 2017, Airtel launched its own free data and calling features for a year. Under the deal, the telecom operator offered free data to its customers who took a 4G connection for Rs. 9,000 for a year. Some telecom companies also offered a 30 to 50 percent discount on night usage data packs...

Jio's Game Plan

By launching Jio, Ambani did not aim to target high-end customers with the company’s telecom services. It sought instead to target 100 million users within the first year of its launch. In addition to launching its services in the mobile telephony and data market, Jio launched Lyf mobile phones priced between Rs. 4,000 and Rs. 19,000 – a segment where most of the device makers were aiming to capture a portion of the pie. According to Jio, the unique selling proposition of these devices was their ability to convert an ongoing voice call to a data call at a single command without interrupting or disconnecting the call...

The Results

By the end of March 2017, Jio stood as the top wireless broadband service provider with 108.6 million subscribers (Refer to Table II for total number of subscribers of telecom companies). The telecom major also stood as the fourth largest telecom player after Airtel, Vodafone, and Idea...

Will Jio Maintain its Momentum?

Some industry observers believed that Jio had disrupted the Indian telecom market forcing incumbents to reduce tariffs. They felt that the Prime membership program could help Jio maintain its momentum.....


Exhibit I: Difference between Voice Networks and Data Networks
Exhibit II: Total Subscribers of Telecom Companies (March 2016)
Exhibit III: Market Share of Telecom Companies
Exhibit IV: RIL’s Five Year Financial Summary (in Rs. Billion)
Exhibit V: Falling Revenues and Operating Profits of Indian Telecom Companies
Exhibit VI: Jio’s Falling Monthly Tariffs

Buy this case study (Please select any one of the payment options)

Price: Rs.500
Price: Rs.500
PayPal (11 USD)

Custom Search