You are on page 1of 7

Strategic issue of reliance jio

The ‘reliance jio launch’ has aroused huge interest among subscribers. The telco has added more
than 50 million subscribers to its network and aims to reach the 100-million subscriber target set
by Reliance Industries chairman Mukesh Ambani.
Recently, Ambani unveiled Reliance Jio's Happy New Year Offer through a live stream. Under
the latest offer, all new users from December 4 will get free services till March 31, 2017. Also,
the existing Jio customers will get the extended benefits on current SIMs.
However, after the launch, a number of issues related to the new services have surfaced which
could pose a challenge for Ambani in the days ahead as battles it out with other telcos.
Though the new network is still functioning under a 'Welcome Offer' that doesn't charge for its
services, these issues are quite consistent with the new subscribers.
Voice call failures:Reliance jio has been stuck in a dispute with incumbent operators over points
of interconnectivity. jio has accused Bharti Airtel, Vodafone and Idea Cellular of providing
insufficient points of interconnectivity leading to call drops. Jio put out data for September 22
saying over 12 crore out of 15 crore call attempts by its users failed. Of the 6.13 crore call
attempts made to Airtel network on September 22, 4.8 crore or 78.4 per cent of the calls failed.
The failure on Vodafone network was higher at 84.1 per cent with 3.95 crore call drops out of
4.69 crore calls. Calls to Idea saw 3.36 crore call drops out of 4.39 crore calls made.
Bharti Airtel has hit back at Reliance Jio saying network connectivity issues and call drops are
due to Jio's own "under-preparedness", insufficient testing efforts and acquiring a large number
of customers at the pre-launch stage itself.
Decreased internet speed:With addition of users to the Jio network, the speed of Jio's 4G data
services has come down drastically after September 5. Now, the internet speed has come down to
6-10 Mbps from 50Mbps during the launch stage.
On paper, the difference is huge but in terms of average customer use, even a speed of 8Mbps
should work flawlessly. However, the Jio connection faces frequent fluctuations hampering the
user experience. Users have also complained about varying speeds despite no change in location.
Buggy Jio apps: The Reliance Jio apps have not shown consistent performance but the idea of
free content sits pretty well with the Indian audience.
The Jio TV app is subjected to frequent crashes and has a long boot-time, which is also the case
with most apps released by Jio. In our experience, the Jio4GVoice is one of the most glitchy Jio
apps. The app often fails to load and when it does, the experience is pretty laggy.
Lack of VOLTE support in older phones: All those who don't have VOLTE technology-
supported phones cannot make voice calls without the use of Jio4GVoice
app which, as mentioned above, seems buggy. This one drawback makes the lucrative free voice-
calling feature obsolete for most new consumers.

which requires a different device. new users are inclining towards Jio.Hence. The only constraint with 4G services is that they take a toll on the phone's battery. which might lead to a some bit of technical issue initially and this is the reason why the company has delayed the commercial launch of its 4G services. With no 2G or 3G options.Jio would be using a combination of VoLTE and Circuit Switched Fallback (CSFB) to offer voice to subscribers. but it cannot be denied that it is far from being mature. the core addressable . that would enable a customer to not just use the telco’s network. Airtel. most Indian smartphone users are still stuck with 3G phones. accessibility and pricing of these devices is going to play a major role in the success of Jio. there has been a steady flux of 4G devices in India.Apart from the VOLTE support. The circulation of 4G devices has been gradually improving but the 4G enabled devices right now in India is still small in number. whereas in case of Reliance Jio. Vodafone. Idea and Vodafone all have 60%+ market share. 2. No first mover advantage Initially. The company is trying to resolve this issue by launching dual-SIM devices. With not much difference in the rates of 2G or 3G services and 4G connection. it had an advantage to a very large extent. Battery consumption: Reliance Jio has launched its internet services on the 4G band. However. The Jio sims won't benefit them in any way. 3. but also other established networks. Challenges in Technology It is true that 4G ecosystem is developing quite well. 4. The Device’s Problem Reliance Jio plans to differentiate it’s product on the basis of VoLTE. the user can't switch to a slower connection to save battery. Bharti Airtel would have gained a fair bit of valuable understanding the knowledge of 4G network since it was the first one to launch it in India. Core addressable market Although China and India have almost identical 4G networks. This indicates that the core addressable market share for Reliance Jio is very small and telecom is a game of abundance . and Idea Cellular have already launched 4G services. ANOTHER ISSUES WITH RELIANCE JIO 1. Reliance Jio has got deprived of it’s first mover advantage although being first one to initiate the technology in India. Bharti Airtel. Voice Over LTE (VoLTE) is still relatively new and might face initial teething challenges. Also. Availability. which might further lead to technical and interoperability issues. when Reliance Jio had procured pan-India spectrum of 2300Mhz . this require cooperation from other service providers to share the network from same towers in particular range of locality. Also. Reliance Communications and Reliance Jio are close to signing a spectrum sharing and trading agreement. Aggregated licensing and auctions have made sure that incumbents are in a fairly strong position where spectrum is concerned. forcing the user to charge it repeatedly.

Bharti Airtel. However. It would deprive the opportunity to new and emerging service providers with better insight and technology. Low Average Revenue per user (ARPU) Reliance Jio face daunting task of convincing.ibtimes. 5. This costs reliance some $14 billion to set up.5% as of now. TRAI was concerned about fostering equal level in telecommunication sector which is legitimate when telecom ecosystem includes number of service providers.market is just a mere 1. Reliance Jio has spectrum in three bands namely 1800 MHz band.in/low-arpu-adoption-4g-volte-handsets-obstacles-reliance-jio-gain- customers-clsa-656345#vmj2CXSiIbe1pBUW. That still gives a lot of time for its competitors Bharti Airtel. However this influenced the controversy of violation of net neutrality. Idea Cellular and Vodafone. which in any way does not pave its way to achieve its target. It is the biggest challenge for Reliance Jio to align the network to align it’s emerging 4G technology with spectrum which has large penetration compared to others. there exists issue of ecosystem. emerging 4G telecom network service to access the social networking site for free if subscriber is using Reliance Jio network. this 800 Mhz band is absolutely crucial for Reliance Jio to have a robust coverage. 7. Currently. Spectrum ecosystem Apart from core addressable market problem. Stiff Competition Reliance Jio has indicated that it would take three more years from 2015 to achieve its goal of 100 per cent network coverage in the country. But still recent 4G smartphones in India support 2300 MHz and 1800 MHz and very few support the 800 MHz band.co. Idea Cellular and Vodafone control nearly 75 per cent of the revenue market share among telecom players. The revenue market share among telecom operators has become extremely skewed towards the top three players . bundling and subsiding 4G users to adopt new handsets and hence it could face problem in adopting subscribers due to low ARPU. This was supposed to create significant entry barriers which can harm competition and innovation. This is mainly because of the complexity of devices and technological issues mentioned above. Besides. 6. This is mainly due to losing the opportunity of being first mover in spite of such a large investment. Failed promotional strategy Reliance Jio tied up with facebook to support the initiative of Free basics in India. 2300 MHz band and 800 MHz band. The first two bands have less penetration in terms of coverage.97 . apart from regionally strong players such as Reliance Communications. http://www. With this Facebook partners with Reliance Jio. it also lost its chance of being first mover in emerging 4G technology. 8. Tata Teleservices and Aircel to strengthen their footprint in spreading its network coverage. Reference: 1.

The metrics company has also presented a graph showing. Ookla has recently released a report based on speed tests done in India since the launch of Reliance Jio.2. The same report by Ookla also says that despite its imperfections Jio is actually a big deal and has changed the 4G market in India.742.info/here-are-the-bumps-in-the-road-that-reliance-jio-might-face/148460/ When someone promises 4G speed reaching up to 135Mbps. In January. These tests are conducted across all the networks providing 4G services. first a gradual increase in 4G speed tests and then a sudden jump in September. the company behind world's most popular speed test app. and took a massive jump to 8. Although. Since these numbers are based on people using Ookla's Speedtest app the real number should be higher. when Reliance made the Jio SIM available to public under Welcome Offer. India grabs Jio with both hands A graphic presentation by Ookla shows a continuous increase in 4G speed tests in first nine months of 2016.512 in September 2016. The report shows an exponential increase in 4G users across India. only 97. which doesn't include users who registered before September 5. http://telecomtalk. 214. The following graph shows Reliance Jio users in the blue colour and rest of the 4G users with purple colour.413.630 people used the app to test 4G speed. it has registered over 1. show that the Jio speed is down significantly compared to how it was earlier. Numbers by Ookla. In August the number was 2.6 crore customers in Welcome Offer. the market can only go crazy. The situation has changed in the last one month. According to Reliance Jio. . And so it did after September 5. in an internet-scarce country like India. don't count out Jio yet. the month when Reliance Jio became more widely available.

. Out of these 8 million people are shown to be using Reliance Jio. on Sept 16. the number of people testing 4G speed stands at somewhere around 8 million across country. what is up for question is the speed promised by Reliance Jio. But what about the promised speed? As we have seen. and continue to do so. Users have continuously moaned and groaned about the falling speed but now since we have the numbers released by Ookla. the popularity of Jio was never in doubt. Then in the next one month.By August 16. The struggle is real. we can confirm their groans are not fake. the number of Reliance Jio tester jumps to over 21 million. queues of people outside Reliance Digital store. which is about 5 million more than the officially recorded number of Welcome Offer users.

5Mbps and also as high as 25Mbps. it doesn't mean most users are getting the speed. In our experience we have registered speed as low as 0. The 4G surge has been so powerful that the global data has also been affected. Take a look at this graphs. . according to Ookla.31 Mbps to 8. In September alone the mean download speed has fallen from11. Reliance Jio users have also complained of abysmal speed on the network.77 Mbps. It should be noted that while the mean download speed is still 8. Good speed or not Reliance Jio has definitely managed to make its mark not just in India but globally as well.77Mbps. The graph shows that global 4G test stayed at around 10 million throughout the year and from Aug 16 to Sept 16 the company recorded a jump to more than 20 million tests on 4G LTE networks.The data released by Ookla shows that mean download speeds for 4G capable phones dropped 23 per cent month-over-month.

free voice calls and free SMS has gathered plenty of steam in last few months. free internet. It would be more interesting to see how Indian customer reacts once the services are not free. if it can also work on the speed it could be the moment Indian telecom market changes for good.Reliance Jio's interesting strategy of free SIM. . which is from January 1. 2017. Reliance has managed to improve its call quality in the last one month.