Telecommunication Company: Reliance Jio

Telecommunication Company: Reliance Jio 1
TELECOMMUNICATION COMPANY: RELIANCE JIO
By (Name)
Class
Professor
College
City and State

Telecommunication Company: Reliance Jio 2
Introduction
Reliance Jio is taking over the telecommunication industry of India by tackling incumbents such
as Bharti Airtel, and Vodafone, which control almost the entire market for data and voice
services (Palepu, and Bhatia, 2016, p.1).
Production Demand Environmental Audit
Meso-Audit
The difference between the enterprise model of other firms such as Vodafone, Idea,
Airtel, and BSNL is that these companies have voice consumers, while Reliance Jio presently
does not have voice customers (Reliance Jio, 2018, p.12). Thus, RJio Has nothing to lose by
offering free voice calls to its consumers; this has provided a competitive edge to RJio over other
network providers in the Indian telecommunication industry. Conversely, the average revenue
per customer for RJio is relatively high, and this provides the firm with a chance to offer free
voice calls. The impact of RJio’s entry into the Indian market forced other companies to
emphasize on approaches such as acquisition and merger to deal with the intense competition
offered by RJio. Notably, by the end of April, 2017, RJio had acquired at least 109 million
subscribers in the Indian market, which has created complications for other industry players.
Brands such as Vodafone, Airtel, BSNL, and Idea began struggling in terms of making
sustainable profits in the Indian market. Thus, the strategy provided by RJio that focuses on
offering almost every service at a cost-free basis has developed a sensation in the industry, and
developed problems for other network providers in the country. Moreover, the rapid
development of RJio within a short period in the Indian market has created numerous problems
for different network providers. For instance, in the fall of August, 2017, the top three network

Telecommunication Company: Reliance Jio 3
providers lost more than five million customers. In addition, a decline in the customer and
profitability base have been identified as significant problems for Vodafone, BSNL, Idea, and
Airtel since RJio’s entry into the telecommunication industry. Therefore, RJio’s approach of
providing low price and in-depth discount services has given it an edge over other companies.
In 2017, Vodafone lost about 2.4 million users, while Idea lost 2.8 million users.
Contrary, Airtel used to be the most dominant and prominent player in the Indian Telecom
market; during RJio’s entry, the firm lost at least 200,000 users by the end of August the same
year. Hence, most of the revenue generated in the market has shifted to RJio, while other players
struggle to make an adequate profit. Alternatively, Idea, Vodafone, BSNL, and Airtel lost their
customers as they were not innovative, and lacked pricing strategies. Fortunately, in 2018,
Vodafone Idea and Airtel introduced a 28-day validity period, which hosted sub-Rs.One hundred
prepaid packs such as Rs.95, Rs.65, and Rs.35. According to Parbat (2018), these meant that
customers who do not recharge on these plans would see outgoing calls blocked in 30 days, and
incoming in 45 days. The two incumbents realized that too much pricing had damaged their
reputation since RJio’s enter into the market. Vodafone and Airtel noted that the pricing had
affected their profitability and revenue, which needed urgent attention.
The RJio’s strategy seems to have forced telecom industries to match rates to retain
consumers, galvanize voice consumption, and data services. Hence, Airtel and Vodafone
introduced a minimum recharge plan across the country to boost ARPU. Consequently, Bharti
Airtel stood ahead of the telecom industry with a 25 percent share as of December 2018. The
telephone subscribers in India using Bharti rose from 1.2 million in November 2017 to 1191
million at the end of December. (ET Telecom 2018). Moreover, RJio’s market share stood at 14
percent, which was higher than Idea Cellular’s and Vodafone’s market share of 17 percent and

Telecommunication Company: Reliance Jio 4
18 percent respectively. Notably, RJio recorded the highest growth of wireless rate subscribers
by five percent, and was followed by Idea with 1.25 percent growth rate of wireless subscribers.
The Merge of Vodafone and Idea Brings a New Giant
The landscape for Indian’s telecommunication market is set for greater upheaval with the
merger of Vodafone and Idea (OpenSight, 2018, p.7). Notably, the marriage of the two
incumbents was announced in 2017, although the two still operated separate customer brands in
2018. Fortunately, the combinations of the telecom giants intend to bring subscriber share, and
the firms’ togetherness on consumer bases, infrastructure, and network assets. Importantly, Idea
won the “Upload Speed Experience” category by scoring a 2.9 Mbps average speed, while
Vodafone had a 2Mbps rate.
Figure 1: Upload Speeds for the various competing demands for telecom products
Importantly, Idea and Vodafone cannot operate as one firm until they clear a debt of Rs.72
billion to the government as a one-time spectrum charge. Vodafone will own a 45 stake in the