Jio: Ready to solve India’s problems (chart)

Jio solves indias problems

Source: STL Partners analysis

Reliance Jio was launched by the Reliance Industries conglomerate in 2016, ready to solve India’s problems. This followed a turbulent and challenging time in the Indian telecommunications sector which had taken a toll on Bharti Airtel and Vodafone, among others. The historically interventionist government made it difficult for private sector telcos to make money.

A change of government in 2014 saw the arrival of Prime Minister Modi who had digital ambitions for India. He recognised the importance of telecommunications in order to “transform India into a digitally empowered society and knowledge economy”. After the creation of broadband highways, ensuring universal access to mobile connectivity was stated as the second pillar in his Digital India vision.

Reliance Industries’ chairman, Mukesh Ambani, closely aligned his bold ambition for Jio to the government’s Digital India objectives and positioned Jio as the operator that would help it to attain them. Jio effectively gave away mobile services for free to attract subscribers. The regulator did not intervene in an ensuing price war, supported by perceptions of Jio as helping to solve India’s digital problems. In fact, it moved to lower interconnection charges which further added to competitor financial burdens.

This meant that, in 2018, Jio was in a stronger position than its competitors to respond to the objectives of the government’s National Digital Communications Policy. It was better resourced, it had less legacy infrastructure to support and was progressing a platforms-based business approach (it was ready to move up the digital value chain). Competitors were dealt yet another blow in 2019, when the regulator upheld historic sanctions that competitors had been hoping to quash.

Jio has continued to ensure that it is well-placed to solve India’s problems. It has built and/or acquired digital capabilities in key areas and has leveraged government’s preference to incubate India-originated digital solutions in order to ensure India’s digital and data independence. Jio’s digital preeminence in India has attracted the attention of internet giants like Facebook and Google, both of whom have invested in its business. Reliance Jio’s strategy exemplifies elements of a Coordination Age approach.

See more about Jio and STL Partner’s Coordination Age:

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