Company Background
This project deals with the business case of the successful launch of the JIO network in India. This project discusses how the project synced itself and utilised the Indian government’s “Digital India “initiative.
Reliance JIO Limited is an operator of mobile network in India. The owner of JIO network in India is Reliance Industries which have their headquarters in Navi Mumbai of Maharashtra. In the year 2010, Reliance JIO overtook 96% share stock of the Infotel organisation (IBSL) against a price value of INR 4800 Crore (US$700 million). This was an unlisted organisation. However, it was the only organisation that had won the bid to have broadband spectrum in as many as 22 Indian cities. After the acquisition, JIO launched the infocomm service in the session 2016-17. There were some complications regarding the launch of the Voice call feature by JIO along with their 4G network service. The sanction was guaranteed by the payment of INR 165.8 Crore to the Indian government. Prashant Bhushan launched a PIL against this acquisition calling it arbitrary as well as unreasonable. However, the company sustained emergent in the accusation PIL and the Telecommunication department gave a clean chit to JIO Infocomm. The department explained that the Indian regulations of 3G spectrum and BWA spectrum did not restrict the company from providing Voice calling service to the customers at no additional consumption charges. Within the first moth after JIO’s launch, the company had acquired 16 million loyal customers. The urge that JIO made in their advertisements, enticed the customers largely (Jio.com2018).
“India is a free Country and no independent citizen would ever pay a Telecom operator any single rupee for making voice calls”
In the year 2016, the company announced that it has global alliance with operators of Mobile network all over the world. The company who had association with JIO are Deutsche Telekom, Orange S.A., MTS, and Telecom Italia and so on. In fact, as per information provided by Davis(2013), in the year 2016, JIO signed up a partnership with BSNL for introducing the feature of Intra Circle roaming by means of which the LTE network of JIO phones would be able to share the network strength of other JIO users in the vicinity.
In this case study analysis, the business strategy model that JIO adopted for India, would be analysed. According to the data provided by Firdaus(2016), within 3 odd months from the date of inception, 80% of the Indian telecommunication network users had experienced Reliance JIO. Authors like Singh (2016), have opined that the brand popularity of JIO network in India helped the organisation to encompass the Indian market with acceleration and vigour. However, Firdaus(2016),, strictly disagrees with the conception of havoc brand popularity. Business strategy of JIO is the most innovative telecom service model in India. Where companies like Vodafone and Bharti Airtel have been unable to provide 4G packages under INR 699, JIO provided the same service initially to the customers free of cost. Mukesh Ambani, the owner to JIO, knew that he needed to deliver something highly enticing to the customers to bring about market segmentation in the community of Indian telecommunication service users, who have been engaged with big market players like Vodafone, Airtel, and BSNL and so on. Mukesh Ambani realised that in this era of information, people are looking for various ways to access mass data at a competitive price.
Selection of the Case Study
Reliance JIO’s strategy was to develop them as a solely dedicated network for 4G. In order to launch an internal market survey in order to create a manipulated demand for 4G, Reliance JIO teamed up with the state governments and installed free to access 4G speed routers which could provide 4G data to the customers in their 3G as well as their 2G phones only. The routers were installed in most popular joints of the famous Indian cities, in order to entice the potential customer groups. The free 4G services of JIO had been ongoing on till the March 2017. The USP business model was utilised by the JIO service providers. Based on this business model, the company tended to provide service at a tender or negligible cost. After the welcome period offer ended the customers had to pay a single amount of sum for availing the service. However, by then the customer base have become loyal to the JIO services. In order to make sure that the company did not lose potential customers, the company attempted to heavily attract the youth of the nation by entering in to strategic pact with owners of Pokémon Go and Clash of Clans.
The criteria of Thomsett (2002) can be applied here for the analysis of the success factors of the JIO Company in India. It is evident that after the market introduction of JIO in India, the company brought about a massive fragmentation of the base of customers of high speed data. It is obvious that by providing top up based network access to the customers (that also 2G and 3G), the MNCs like Airtel and Vodafone collected a huge amount of revenue. Again as a alter effect, the government of India also earned a large amount of corporate tax from these multinational companies. Besides the company also collected about 1% of every recharge value as revenue. Other than that the companies also contributed to the Corporate Welfare fund of the Indian government and lastly also paid Educational Cess. However, after the advent of Reliance JIO in India, which is a native company of India, they would be liable to pay much lesser corporate tax and would not pay the other taxes and corporate payments incurred by the other companies. However, Mir and Pinnington(2013), informs that the company fulfilled one major perspective of the government. The Indian government had launched “Digital India” by virtue of which the government planned to provide internet connectivity to Indians of all economic background and at a low rate. The JIO project was perfect for the plan and by means of operations of JIO network, the government took a big stride towards the success of the campaign. The theory of Duncan, (2004) can also be applied to assess the success factors of the launch of JIO in India. The multinational companies had occupied almost the entire market in India. As an impact, large amount of national capital drained out. Nevertheless, the JIO launch made digital tools available to almost 90% of the Indians and the GDP growth boosted about 0.65% as an impact of the launch of JIO in India (Mohapatra, Swain and Das 2015). Besides, the circulation of capital inside the Indian Territory helped the government in many ways. Above everything, the country made a majestic stride towards development. There have always been difference between criteria as well as factors in case of business strategy of JIO network in India. Pinnington (2013), had opined that businesses fail due to undermining of competitors. In this context, the JIO network had played a major role they never undermined the planning as well as business developments of other companies.
Discussion
Companies like Airtel had launched joint ventures with Samsung to offer smart phones to the people at INR 1399, which had a preinstalled Airtel connection and a complimentary data for 6 months. Initially after the launch of this scheme in the Indiana market, JIO had suffered a temporary setback and the average sales value of the company depreciated by 2.5% approximately. Nevertheless, JIO launched an excellent counter strategy in order to prevent the growth of Airtel. The company launched a feature phone with preinstalled JIO aim. Moreover, the feature phone had all the aspects to enjoy advantages of JIO on that phone. Moreover, the customers got the phone actually free of cost. The INR 1500 that the customers invested behind the phone were reverted back to their bank accounts after 6 months.
In this report, the analysis have been centered up on the criteria provided by (Thomsett, 2002). The JIO network in India flourished in 2017. However, contemporarily in the industry, major players were Bharti Airtel, Vodafone, Aircel, Idea and BSNL. The monopoly of the Indian market was enjoyed by the major multinational players like Airtel and Vodafone. As highlighted by Thomsett (2002), the company might incur some mistakes in its course of execution of the product. They might cause harm to certain business criteria and inflict losses to the company. Nevertheless, the end outcomes of the business campaign often make people forget the flaws in the execution of the project. In this context, the author provides the example of the project of the construction of the Opera House of Sydney. Nevertheless, as per the information provided by Singh (2016), the company that undertook to engineer the project, failed to work within the assigned budget. They consumed 16 times of the assigned or projected budget of the company (Gupta and Jha, 2015). Moreover the company took 4 times the time to accomplish the project. In spite of failing these criteria, the impact created by the finally completed project was humongous.
The project actually tended to be a big success for the country in spite of being a failure from the project management perspective. The people were mesmerised at the grandeur and the magnificence of the construction and the basic flaws were reminiscing the flaws of the company. This criteria have been identified for the analysis of the highlighted business case as it directly aligns with the outcome of the launch of the JIO network in India. The company almost destroyed the current industrial structure of telecommunication in India. Moreover JIO also set up a market monopoly by ousting the present market players from the industrial structure.
Reliance JIO of India entered the domestic market with a significant market capital of $32 Billion in the market. In less than only 8 months the company’s Point of Uniqueness strategy. The consumption of mobile data in India was turbocharged as a consequence of the rate cut tariffs that was introduced by Reliance JIO. Ranging from TATA Indicomm to Vodafone India Limited were unified to reduce the impact of Reliance JIO in the Indian market. Among the Indian sub-continent, the Indian market had been the most potential market for the telecom companies that generated more than $100 million from the Indian market. However, the vision of Anil Ambani had been the democratisation of the digital usage culture in India. Many rival companies have brought allegation that Reliance JIO pertained to unfair business and corporate ethics.
Standard Criteria
Favourable regulatory behaviour of the Indian government accounted for the ample spread of the Reliance JIO Company in India. Among ample criticism one major fact is that the aggressive business strategy of Mukesh Ambani in India reshaped the telecommunication industry of India. The subscription rate of JIO in India have been over 1.2 Billion units in India, only second after a telecom company of China in China (Jha and Saha 2015). The JIO Company almost ruined the business of Vodafone India, one of the leading business organisations of the telecommunication industry of India, backed by eminent multi-billionaire Bharti Mittal and Idea Cellular network of the family run conglomerate of Aditya Birla Family. The criticisers of JIO just after the test phase, up hosted a rumour that the number of call drops in the voice calls from JIO to the other networks were huge. The rivals complained that there were a lot of technical issues in the innovative voice call process implemented by JIO network. However, JIO manager and engineers run a pilot test before the members of the Telecommunication regulatory authority of India. The declaration from the end of the regulatory authority confirmed that JIO is the world’s first voice call service providing company that runs entirely on 4G data service and ruled out the allegations from the other rivals regarding the interruptions caused in the Voice Call process. In fact, the authorities provided that even if wavelength of the other voice service providers faced interruptions, JIO was constant in its service (Joshi et al. 2018). JIO in act pulled up the millions of Indians to the age of digitalisation. The launch of JIO sim card was no lesser event than the launch of i-Phone in the Indian market.
In future JIO have a teaming up with Samsung in order to launch the 5G network in India before any other market players. Nevertheless, the company has decided that they would be the only market player to introduce 5G at a comprehensible rate. However, in this regard, it might be recommended that Reliance JIO should not follow the same strategy of late market entry. They have to make market entry prior to the other market players. This is because the other market players who are working on 5G, would like to introduce 5G packages which are competitively priced. Other than that the company have to identify the potential market of 5G users in the Indian market (Gupta and Jha 2015). They product JIO Giga that would be introduced in the market very soon and the company should bifurcate the 4G and the 5G market in India and depend upon futuristic demographic trends to change the strategy of market operations.
Conclusions
Analysing the market demographics and other market success strategies, it can be concluded that JIO is the only service provider that have been able to reduce the service charges of high end connections like 4G. Analysing the identified criteria in this report, it can also been concluded that JIO is the first provider of 4G based voice call feature in the smartphones without any external back up. Lastly, analysing the market challenges of JIO in India, it can be easily suggested that JIO have taken entrepreneurship in the telecommunication industry of India to an absolutely different level.
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