How Reliance Jio Disrupted the Indian Telecom Industry

At the recent Annual General Body meeting of Reliance Industries, MukeshAmbani spoke about the ambitious and risky Jio project.  It included just too many freebies like free voice calls, cheap 4G devices and cheap 4G rates, unrestricted internet access and much more. The markets just plunged down with the announcement and even Reliance went down by 3%.

Understanding the pros of Jio

Image Source : IndianExpress.Com

  • In several parts of rural India, data can be very expensive for the average user. Urban areas where people can afford the high rates face connectivity issues. People tend to switch off their phones to prevent excess or accidental use of data, people refrain from sending texts on festivals as the cost is hiked in the name of congestion. The advent of Jio seems to have brought us into a phase where there will be data abundance.
  • Jio does not have any national roaming charges. Voice calls are free and free data packages are being offered
  • In Wi-Fi Jio has come up with separate categories that areJionet and Hotspot. A user using a package of Rs 499/- will get a data of 4 GB. Depending on the tariff chart interpretation one can get data ranging between 4 GB and 8 GB if the user connects to the internet hotspot.
  • The lowest data pack of the company will be at Rs 19/- and the call rates and data rates will not be hiked on days like Independence day, Friendship day etc.
  • Data usage for e-commerce services, streaming services, FB, Google etc is going to be on a high with such cheap Jio rates for the next three months.

The disadvantages of Jio



Image Source : IndianExpress.Com

  • Reliance head has claimed that Jio will reach 90% of India’s population by March. This claim of connecting the unconnected is a little over ambitious
  • Reliance hopes to recover its investments with the help of Jio app ecosystem which contains app for TV,cinema, music, Jio magazine and newspaper application and a personal digital wallet. This entire package would be charged at Rs 15000/- per year. This sounds similar to the VAS ecosystem which was a failure. Also, if you peep into the past you will find that instead of an open ecosystem, third party applications are always found to be better.
  • The billing cycle would be a 28-day cycle which means that consumers will be billed for 13 cycles in a period of 12 months

Jio v/s its competitors

Image Source : HindustanTimes.Com

  • In the month of August, complaints were given against Jio by different Telecom Providers to Telecom Regulatory Authority of India (TRAI). They claimed that Jio was giving full services to the customers in the name of trials.
  • Everyone knew that the Jio rates are going to be pretty low. Therefore just one week before Jio was launched Bharti Airtel, Vodafone and Idea Cellular brought down the prices of their data services.
  • There is a verbal war going on between Airtel and Reliance on the matter of extra inteconnect points. There are problems with Vodafone and Idea as well on the matter of interconnect points
  • Reliance has ambitious targets of reaching 100 million customers by December 2016 and there are chances that competitors may see a shift of its customers to Jio for voice and data requirements
  • Jio has the highest earnest money deposit or EMD. Therefore it seems to be the only company which has the capacity to buy the impending spectrum allocation by the government in most circles at a base price.

With the ambitious plans looks like Jio is going to be a disrupter in the telecom industry. The fact that with the mere launch of Jio,Bharti Airtel’s market price dipped by Rs 12,000 crores is a clear indication of what lies in store for the Indian Telecom Industry.

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