The interplay of three factors—regulation, liberalization, and technology—makes this

sector an interesting study. There are continuous technological changes and evolving
regulatory climate. While Indian telecommunication companies, increasingly buoyant
and confident, have started venturing outside the country and investing abroad, the
telecom manufacturing in India is still to attract investment on a sustained basis.
Mobile phones are popular due to their personal, portable, and digital nature, enabling
people to be always connected.
There are increasing innovations,
especially development of mobile
applications. The low cost of
handsets in India and the innovative
budget telecom network have
lowered the barrier to entry of
consumers to the market.9 On the
supply side, mobile connections are relatively cheaper than fixed line telephony.10 The
telecommunications sector plays an increasingly important role in the Indian economy.
It contributes to economic growth and the GDP and generates revenue for the
government and generates jobs. In short, telecom sector has a multiplier impact on
the economy. We have come a long way. However, certain challenges such as
encouraging telecom manufacturing in India, spreading tele-density, and Internet
services across India to bridge the digital divide are still to be fully met.

Page 10
The number of telephone subscribers in India increased from 1,151.78 million at the end
of Dec-16 to 1,190.67 million at the end of Dec-17, registering a yearly growth rate of
3.38%. The overall Teledensity in India
increased from 89.90 at the end of NUMBER OF TELEPHONE
SUBSCRIBERS (IN
Dec-16 to 91.90 at the end of Dec-17 at
MILLIONS)

1190.67
1151.98
the growth rate of 2.22%.

1036.41
2015 2016 2017
Telephone subscription in Urban

688.25
683.14
600.66
502.42
Areas increased from 683.14 million at

468.84
435.75
the end of Dec-16 to 88.25 million at
the end of Dec-17 at the yearly growth
RURAL URBAN TOTAL
rate of 0.75%. However, Urban
Teledensity declined from 170.15 at the end of Dec-16 to 168.29 at the end of Dec-17
with yearly decline rate of 1.10%.
Rural telephone subscription increased from 468.64 million at the end of Dec-16 to
502.42 million at the end of Dec-17 at the
yearly growth rate of 7.21%. Rural
Teledensity also increased from 53.27 at
the end of Dec-16 to 56.66 at the end of
Dec-17 with yearly
growth rate of 6.36%.
Out of the total tele phone subscription,
the shares of Rural telephone
subscription increased from 40.69% at the end of Dec-16 to 42.20% at the end of Dec-
17. However, share of Urban telephone subscription in total telephone subscription,
declined from 59.31% at the end of Dec-16 to 57.80% at the end of Dec-17.

Page 11
 The JIO marketing strategy

India is one of the biggest mobile markets in the world. India has close to billion mobile
subscriber due to which Indian mobile industry is one of the fastest growing industry
in the world. After China India is the second largest market for mobile service
providers.

Reliance Jio:

Reliance Jio Infocomm Limited is the subsidiary company of Reliance industry which
provides 4G network service. Jio is the only Vo-LTE(voice over LTE) provider in the
country.

Launch :

Service was first Beta- Launched to its employees and partners in Dec 2015 and then
later in September 2016 it was launched commercially for the public. Reliance Jio had
already made a lot of buzz before the launch because of its amazing offers and it also
showed in the results according to the reports in the very first month after its release
Reliance Jio has acquired 16 million subscriber which is highest for any service provider
in the world.

The number has increased to 50 million in 3 months and today Reliance Jio has more
than 120 million users. Shahrukh Khan was appointed as the brand ambassador for the
product.

Page 12
Offerings :

Reliance Jio has a whole range of products to offer than its 4G

network.

Jio Apps: Jio has launched number of multimedia apps available

on Google play store which requires Jio SIM card to function like
JioTV, Jio Cinema, Jio Music and much more.

JioPhone: Jio has recently announced a free of cost mobile

phone with 4G connectivity named as Jio phone. You just have to pay security amount
of 1500 rupees which can be withdrawn back after you return the phone after 3 Year
to any Jio Store. You can pre-book your Jio phone from 24th August 2017.

4G Broadband: The company has also started the 4G broadband service in September
2016.

Jio Wifi: Jio is also offering a portable wifi hotspot device through which you can
access fast speed internet on your 2G and 3G devices by connecting your device to it.
It comes at a very affordable price range of 2000-3000. So if you do not have 4G
enabled phone you don’t have to buy a new handset.

Offers for Customer:

Reliance Jio was launched with free unlimited calling and data usage for 3 months
which was extended for another three months later as a special offer.This was one of
the biggest reason for its popularity among the masses. After April 2017 customer has
to pay for their calls and data usage there are many very reasonable price plans from
which you can choose to use.

Page 13
Impact on Other Service Providers :

Reliance Jio offers and data rates were so low that many people switched their existing
network to Jio which cause a lot of unrest to the other operators due to which they
have to make some drastic changes to remain in the competition. The merger of Idea
with Vodafone and Airtel with Telenor are the result of that. Also, the data usage rates
for other operators also came down drastically. It is safe to say that Jio has completely
changed the way network operator used to charge the customers for the services.

Impact on Digitalization of India :

The Indian government was working on Digital India from last three year. The main aim
of this scheme is to make all the government schemes and facilities online for which
we need internet connectivity in low rates so that people can use these facilities.
Reliance Jio has provided a big boost to this by providing fast pace internet at low
rates. India is expecting to cross 500 million internet users this year which is a huge
improvement over the last few years.

Low data usage rates made it possible not only in the urban area but also in rural areas.
As per the reports in India, 48% of total internet users are from rural areas.

Page 14
Reliance Jio Infocomm Limited (Jio), the telecommunication arm of Reliance
Industries Limited (RIL), crossed 100 million in subscribers in less than six
months of its launch in September 2016. Reportedly, Jio was the only
telecom operator in India with fully data-centric services, entirely based on
voice over long-term evolution (VoLTE) technology, which allowed voice to
be transferred over an internet protocol (IP) network at much faster speeds
than on traditional networks using 2G and 3G technologies. According to
Reliance Jio Chairman Mukesh Ambani (Ambani), for 170 days, Jio had
added an average of nearly 7 customers on its network every single second
of every single day – an unprecedented level of acceptance for any
technology company anywhere in the world. The Jio network had generated
a world record by crossing 16 million in total subscribers during the first
month of its operations. The network crossed the 50-million subscriber
mark in just 83 days of its launch, adding an average of 600,000
subscribers a day.

The Reliance Group was founded by Dhirajlal Hirachand Ambani popularly

known as Dhirubhai. Born on December 28, 1932, in a small village of
Gujarat, a state in western India, Dhirubhai was the second son of a poor
school teacher. Dhirubhai returned to India in 1957 after a stint with A.
Besse & Co., Aden , Yemen. He started a yarn trading business from a small
500 sq. ft. office in South Mumbai. The trading agency, Reliance
Commercial Corporation, imported polyester yarn that was sold to textile
manufacturers, and exported spices. Sensing an opportunity in the textile
sector, Dhirubhai obtained the necessary clearances to manufacture cloth
from polyester fiber. Reliance’s first textile mill was opened in Naroda in
Gujarat in 1966. Dhirubhai went on to establish a highly successful clothing
brand named Vimal.

Page 15
The Department of Telecommunications (DoT) was set up by the
Government of India (GoI) in the 1980s. Its function was to manage all
telecommunication services within the country. In 1986, the GoI sought to
modernize the telecommunications facilities in the country and it
established Mahanagar Telephone Nigam Limited (MTNL) to look after
services in Mumbai and New Delhi, and Videsh Sanchar Nigam Limited
(VSNL) to handle overseas services. The rest of the nation’s services were
to be run by the DoT. In 1994, India ranked sixth in the world in terms of
number of installed fixed lines. The GoI introduced the National Telecom
Policy (NTP) in 1994 to improve India’s position in global
telecommunications. The introduction of the NTP led to a metamorphosis
of the industry as it allowed the private sector to invest in
telecommunications.

Reportedly, Jio’s launch had been in the making for about six years. Jio was
established based on Ambani’s belief that mobile internet was the
revolutionary technology of the 21st century. Ambani re-entered the
telecom sector by acquiring a company that had bought a pan-India 4G
spectrum in the 2300 MHz band in 2010. In 2010, RIL entered the
broadband services market with the acquisition of Infotel Broadband
Services Limited (Infotel), which was the only successful bidder for the pan-
India fourth-generation (4G) spectrum auction held by the Government of
India. RIL had paid Rs. 48 billion to Infotel to pick up 95% of its stake.
Infotel had its name changed to Reliance Jio Infocomm Limited (RJIL) in
January 2013.
Game Changer

Access to the Jio service was facilitated from September 5, 2016. Jio had
introduced Aadhaar -based digital Jio SIM activation across 3,100 cities and
towns in India. This allowed the customer to complete the SIM activation

Page 16
procedure within minutes using his/her Aadhaar number. Reportedly,
people across cities in India waited in serpentine queues to buy an RJio SIM
card. Application forms which were supposed to be free were reportedly
sold in the black market for Rs.100 each. Jio even started home delivery of
Jio SIMs in December 2016. One could register to get a Jio SIM home-
delivered and it could be activated within 5 minutes through eKYC. This
service was active in 8 cities of India – Mumbai, Delhi (NCR), Kolkata,
Chennai, Bangalore, Hyderabad, Pune, and Ahmedabad.

Competitive Pricing
Jio, which disrupted the Indian telecom market with its six-month-long free
data services, started charging customers from April 1, 2017. Ambani
announced Jio’s tariff plans in February 2017, including the special Jio
Prime membership and the “Everyday More-Value” offer. The Jio Prime
membership offered 1 GB high-speed 4G data and free calls for Rs. 10 a
day for a year. The membership fee for Jio Prime was Rs. 99 per year. The
unlimited free voice, free data offered in the ‘Happy New Year’ scheme
would be available to Jio Prime members till March 31, 2018, at an
introductory price of Rs. 303 per month. Jio Prime members would also be
able to enjoy all Jio’s applications worth over Rs. 10,000 absolutely free till
March 31, 2018. Jio in addition to its own tariff plans, also came up with
the ‘Everyday More-Value’ offer in March 2017 under which its customers
had the option to choose a Jio plan that matched the highest selling tariff
plan of any of the other leading Indian telecom operators and would get
20% more data than other operator offered.
Marketing

RIL had aggressively promoted Jio even before its launch by promising free
data and voice calls. About fifty customer acquisition and relationship
managers were appointed to hire teams that would target signing up users.
The launch of Jio was a massive event attended by a who’s who from

Page 17
politics, Bollywood, and Indian and international media to ensure that the
offer reached out to the maximum number of people with multi-channel
coverage.

Challenges
Analysts opined that Jio had been a totally disruptive force in the Indian
telecom sector. It had forced competitors like Airtel, Idea, and Vodafone to
experiment with different packages and data pricing strategies in order to
battle its disruptive pricing. Vodafone was in talks for a merger with Idea
to battle Jio’s sales. Analysts projected that Jio’s arrival would generate a
trend of consolidation in the telecom sector. Airtel had slashed its 4G/3G
data by nearly 80% and for corporate customers it had reduced the prices
by up to 60%. Airtel also launched a new data plan “myPlan Infinity’ that
allowed consumers to make voice calls for free. Idea slashed data tariffs by
up to 67%. Airtel entered into a definitive agreement with Norwegian
telecom operator Telenor Group (Telenor) on February 23, 2017. As a result
of the acquisition, Airtel would take over Telenor India’s spectrum, licenses
and operations, including its employees and customer base of 44 million.
Analysts felt that with this move Airtel intended to defend itself against Jio’s
sales.

Road Ahead
In February 2017, Jio announced a strategic partnership with Uber
Technologies Inc. (Uber) aimed at bringing the benefits of Jio Digital Life
ecosystem to their users. The agreement would allow Uber riders to pay
for their rides using JioMoney and thereby enhance the digital transaction
ecosystem in India. Anirban S Mukherjee, business head, JioMoney, said,
“Jio aims to bring the benefits of evolving digital technologies to every
Indian through an entire ecosystem that will allow Indians to live Digital
Life to the fullest. JioMoney’s integration with Uber will power the rapid
migration of many more Uber transactions to the digital platform.” Jio was

Page 18
reportedly gearing up to expand the company’s product portfolio by
venturing into diverse areas such as broadband services and Direct-to-
Home (DTH) TV services. It was expected to launch DTH services, which
planned to offer more than 350 channels.

Page 19
 The Indian Telecom Scenario
Mobile data consumption in India surpassed the combined usage of the US and China
in 2017, a year that saw the landscape of the telecom sector being altered with bitter
competition and setting-in of the much awaited consolidation phase.

With latent demand for data fueling the digital economy, 2018 could be the growth
year for the sector where investment of around Rs. 3 lakh crore is estimated to be
made in next two years.

In what could be considered as a transformational year for the Indian telecom sector,
2017 saw telcos consolidate like never before, leaving just three major players in the
market by the end of the year. It only proved that telecom sector has become a money
guzzler where only those with deep pockets can survive.

While the mighty house of Tatas gifted away their telecom business to Bharti Airtel,
billionaire Mukesh Ambani's Reliance Jio acquired spectrum, mobile-phone towers and
fibre assets of his brother Anil Ambani's Reliance Communications Ltd.

On the other hand, Vodafone India and Idea decided to merge to become the country's
largest operator. Airtel bought Telenor's ailing Indian subsidiary, Telenor India, as also
Tikona Digital Network.

"This year was of consolidation for the sector. Next year will be a year of growth for
the sector," Telecom Secretary Aruna Sundararajan told PTI summing up the macro
scenario of the sector for 2017 and 2018.

And what a year it has been! The Indian telecom sector, -- second only to China with its
massive subscriber base of 1.1 billion users -- saw severe bloodletting for most part of

Page 20