Draft Questions on Facebook-Jio Collaboration in India

1. Should Jio Platforms aggressively pitch for 5G adoption in India? How will it benefit
the company?

Benefits of 5g

 The start with, it will certainly improve the experience of remote working and
collaboration. Today, over 50 percent of staff work away from their main office at
least 2.5 days a week which while giving businesses agility, improved scheduling and
lower staff turnover, can make connecting, sharing and engaging teams difficult.
 Enter 5G. Network-related tasks, such as online sales or sharing large files in the
cloud will become faster and more efficient, even on mobile devices without the
need to connect to WiFi, giving businesses huge productivity gains and boosting staff
morale. After all, there’s nothing more frustrating than a slow internet connection.
 As well as connecting people, 5G will connect things, vastly expanding the
capabilities and application of IoT which demands better and faster connectivity. In
fact, 5G will enable device-to-device communications for up to a million devices per
square kilometer.
 This opens-up huge opportunities for IoT innovation and commercial use - from
driverless cars, drones, Artificial Intelligence, robotics and remote-controlled
machinery, and virtual and augmented reality - giving businesses at the forefront of
creating and using such technologies a competitive edge.
 With the number of IoT devices expected to increase with the release of 5G speeds,
IoT-focused businesses can expect this highly-anticipated network to impact IoT
devices significantly by enhancing infrastructure diagnoses systems and providing
better data insights; both will strengthen a company's infrastructure, lowering the
vulnerability of these devices, which are known to be more susceptible to cyber
threats like cryptojacking.
 A very clever example of what’s possible is provided by Vodafone’s 5G connected
crane, allowing an operator hundreds of miles away to have full remote control of
the crane (or indeed multiple cranes in different locations). This 5G-enabled
teleoperation solution could transform the construction industry and many others,
increasing site safety and reducing idle time.
 Network Slicing: The multitude of uses and new services of emerging technology by
businesses and consumers will require a flexible network that can provide a better
user experience. With 5G tech businesses will be able to create multiple virtual
networks with just one physical system. This network slicing can help companies
provide an end-to-end virtual system encompassing not only networking but
computing and storage functions as well. With 5G connections your business can
offer consumers a more seamless experience.
  Multi-Access Edge Computing: Through 5G tech, multi-access edge computing will
assist in decongesting your company’s crowded network, even when supporting
hundreds of devices at once. This cloud-based network architecture can not only
decrease site congestion, but also will increase overall site performance. Besides
handling large data loads and delivering results in real time, multi-access edge
computing will also protect user data, through local computing versus a centralized
network used currently.

All the above points show that

 5G opens-up huge opportunities for IoT innovation and commercial use - from
driverless cars, drones, Artificial Intelligence, robotics and remote-controlled
machinery, and virtual and augmented reality - giving businesses at the forefront of
creating and using such technologies a competitive edge.
 Jio has already invested in companies like Radisys (5G/IoT) , Embibe (AI ed-tech) ,
Tesseract (AR/VR/MR) ,Haptik (AI)
Therefore jio should definitely aggressively pitch for 5G adoption in India.

Comparison with 4g

 Compared to third generation mobile networking, 4G enabled previously impossible

quality video streaming and calling on the go, meaning live TV is now routinely
watched on the daily commute. More video streaming, however, has increased
congestion in the network.
 4G is reaching the technical limits of how much data it can quickly transfer across
blocks of spectrum,a major difference between 5G and 4G is this congestion will be
eliminated. This mean no more five bars of networking signal at rush hour but an
inability to access a web browser.

Apart from jio other competitors also exists like airtel and Huawei are in then race for
launching 5G
Airtel

 In a bid to strengthen its 4G network and enhance 5G capabilities in India, Bharti

Airtel has inked a $1 billion (nearly ₹7,636 crore), multi-year deal with Nokia to
deploy the Finnish majors 5G-ready solutions across nine circles in the country.
 Nokia, which is the largest 4G vendor in Airtel network, will help lay the foundation
for providing 5G connectivity in the future by deploying 300,000 radio units across
several spectrum bands in those circles expected to be completed by 2022.

Huawei
  In the latest bid to establish itself ahead of India’s 5G trials, and to find collaborators,
the Chinese telecom equipment maker is using the Covid-19 pandemic to
demonstrate how its 5G tech can be useful in the healthcare sector.
 In april, Huawei held a webinar to “reveal”, for the “first time ever”, how its
technology was used to fight the pandemic. The Cellular Operators Association of
India (COAI), the Indian industry body representing telecom service providers,
organised the webinar.
 It showcased how Huawei partnered telecom service providers, medical device and
application providers in China to create 5G-enabled solutions in healthcare like
telemedicine consultation, AI-powered image scanning, and operating mobile trolley
that can send food to patients without human contact.
 Asked after the webinar if the company’s looking to find partners in other countries
including India, Huawei told that it is “always open to collaboration in every market
we operate”.

Benefits for JIO Company

 Launch of 5g its ability to proliferate across the country will attract global technology
leaders to forge partnerships with it.
 Reliance Jio will continue to add more subscribers at a rate unprecedented in the
telecom world
 Reliance Jio's long-drawn plan to solidify its design and technology base in the
country could be successful
 The launch of 5G-enabled technologies is expected to be transformative in the telco
and other industries by unlocking various disruptive new technologies. Global
investment in the 5G industrial chain over 2020-2035 is likely to reach $3.5 trillion.
 5G, the next-generation mobile connectivity is all set to revolutionize the world
around us as it is touted to be 20 times faster than 4G speeds. In addition to the
faster internet speeds, the advent of 5G connectivity will be a catalyst for the
progress of industries such as healthcare, automobiles, VR, AI, IoT and others.

2. What should Reliance Jio do to repeat its success in the retail business in India and
dislodge the present incumbents Amazon and Walmart/Flipkart to be the number
one in e-retail in India?

Leverage existing infrastructure

it is backed from day one by its huge network of Reliance Retail stores, which includes
Reliance Fresh, Reliance Trends, Reliance Digital, and the British toy retailer Hamleys.
Whereas amazon flipkart do not have any physical stores

quick delivery
  While Amazon India and Flipkart are competing in 1-day delivery service, Reliance
can deliver just in 4 to 5 hours.
 Most of the medium or big cities in India already have so many Reliance Retail
stores.
 Whenever we order from the store, it will be sent to the nearest retailer store and
they will deliver to us within no time.

more discounts
 One of the things that can trouble Amazon and Flipkart is Reliance’s history of
launching operations via massive discounts
 This kind of discounting can disrupt any market
 Mukesh Ambani who owns 44.7% of the company will use his own money to build
the whole business.
 So there would be so much discount that Reliance can provide. On the other hand,
Amazon and Flipkart will not be able to provide bigger discounts than Reliance. So,
that’s how they will start capturing the e-commerce market.

integrate with small traders and farmers

 Reliance is bringing into its e-commerce fold mom-and-pop stores across the
country. When you order on its e-commerce site, it may be the local kirana store
that delivers the goods to you. But unlike Amazon and Flipkart, which also have tie-
ups with local stores but currently use them only for last-mile delivery, Reliance is
integrating small traders and farmers into its business.
 It can tie up with many kirana stores, installing its Jio point of sale (PoS) machines in
them, connecting them into its high-speed 4G network on which its customers can
order supplies, and working with the store-owners on inventory and billing. What’s
more, unlike conventional PoS terminals, the Jio PoS machines will not only help do
the transaction, they will also store data, would be connected to the cloud and will
store customer information, which would be accessible to that particular retailer
only this way Reliance will have help digitise kirana stores,and given them store-level
customer intelligence, the key to the success of Amazon and Flipkart.

Jios reach to middle class

 In comparison, while Flipkart has about one lakh sellers on its platform, Amazon has
5.5 lakh sellers on its platform – most of them catering to the millennial crowd. Jio,
with its existing consumer base will give edge by covering the broader consumption
base of middle-class India.
More use of AI

 Jio has already invested in companies like Embibe (AI ed-tech) , Tesseract
(AR/VR/MR) ,Haptik (AI)
  These start-ups are also developing technologies and services in AI, agriculture,
healthcare, all of which Reliance can integrate on its e-commerce platform.

Jio existing ecosystem

 Jio is building on these mobile subscribers by investing in related services to create

an ecosystem that gives customers access to rich content and payments options.
 This ecosystem will be available for Reliance Retail to build on.

Improve customer experience

 To compete with Amazon and Flipkart, Reliance will have to significantly improve the
customer experience, both in stores and on its online channel, because discounts
and cashbacks will not generate loyalty for online customers as we saw in the Paytm
Mall case.

Use of jio for advertising/promotion

 Reliance Jio has more than 227 million users. They may not need to spend to
millions of dollars in advertisements because they can promote via My Jio app to
millions of users for FREE.

3. What do you understand by Net Neutrality? In the context of investment made by

Facebook in Jio Platforms, what is the likely impact of this duo on net Neutrality?

Net Neutrality is the principle that Internet service providers (ISPs) must treat all Internet
communications equally, and not discriminate or charge differently based on user, content,
website, platform, application, type of equipment, source address, destination address, or
method of communication.
The reasoning behind this principle is that the internet should be an equal opportunity,
equal playing ground for all the players. The primary argument for net neutrality is that if
the ISPs give preferential treatment to certain content, then newer players in the online
market will have a much more difficult time competing for customers and this is in turn will
stifle innovation
With net neutrality, ISPs may not intentionally block, slow down, or charge money for
specific online content. Without net neutrality, ISPs may prioritize certain types of traffic,
meter others, or potentially block traffic from specific services, while charging consumers for
various tiers of service.
impact of this duo on net Neutrality
 With 9.99% stake in Jio Platforms, Facebook wants to leverage this huge user base to
have an easy opening for its services at a large scale.
 With this deal jio already being large network provider will now also control the
most dominant apps — Facebook and WhatsApp — on its platform. One can argue
that they also had their own apps, but owning the network as well as the largest
applications do raise concerns

Facebook has announced the launch of two services which can have potential net
neutrality issues.
 The first is the launch of its short format video sharing app ‘Lasso’ which is supposed
to compete with TikTok. India has about 120 million users on TikTok, which is the
highest that the app has outside of China. . According to some analysts as soon as
Facebook launches Lasso on Jio’s platform it will instantly become bigger than
TikTok.
 The second initiative of Facebook which has already attracted some controversy is
the WhatsApp Pay initiative. This will put WhatsApp Pay in direct competition with
Google, Amazon and PayTm, amongst others.

If jio offers preferential access to WhatsApp or Facebook on its network, there will
be Net neutrality issues
For eg A faster loading Lasso or better connectivity WhatsApp Pay to Jio users can
result in a change of brand loyalty.

4. Is there a case for stronger engagement by CCI to scrutinize the Facebook Jio Deal?
On what grounds?

 The success of the business model of various (multi) two-sided virtual platforms like
Google, Facebook, and Uber among others depends on collecting user data. The data
as input may be used to get ad-revenue or improve internal algorithms for the paid
side of the platform. The potential of data analytics gives a crucial competitive
advantage to the advertisement-driven business model.
 By restricting the supply of user data, a dominant player can successfully restrict its
competitors from gaining critical mass (in terms of both scale and scope) that is
crucial to stay viable in a digital market.
 Very often, big digital businesses are not confined to providing just one or two
services. They offer a whole range of access to different areas with an ecosystem of
services that are designed to work together well. The goal of producers is to
essentially lock-in their customers and lock-out the competition. This is
accomplished by creating a value proposition for their customers and making it
difficult for them to leave the fold because of the high switching costs.
 In many cases, data leveraging has been considered as a serious anti-trust issue and
various competition regulators have fined both Google and Facebook in the past
 The Competition Commission of India (CCI) is already investigating the Google-
Android case for abusive and anti-competitive restraints in Google’s licensing
practices of its Operating System by imposing conditions (on mobile manufacturers)
like the pre-installation of Google Search app in Android phones.
 the evidence shows how during the last years some data-driven markets instead of
having been disrupted by new, innovative products or services, have even increased
their strong market positions like Google’s search engine or Facebook’s social
network and communication online services.
 Given that both Jio and Facebook are among the top three holders of subscribers in
India in their respective services, are these companies in a position to unfairly
compete against competitor service providers by ‘directing’ its customers to use, for
instance, the Jio Mart service? That is, will consumers have unfettered freedom to
choose other alternatives like Bigbasket, Goffers (in online grocery ), or Amazon and
Flipkart (in retail)?
 Given the new app could provide various services (one-stop-shopping) through a
‘super-app’ and may acquire the status of a dominant hyperlocal service provider,
will consumers be free to choose their service without pre-installation of app over
the phone, or will the merged company’s significant subscriber base be “ushered”
through technical price discrimination or by requiring users to pass through a
proprietary first screen? In other words, will users of Jio/FB/WhatsApp/Instagram
be led into content cul-de-sacs owned and operated by Jio / Facebook?
 A theory of leveraging. The classic example of leveraging is when Microsoft used its
quasi-monopoly on the client PC operating systems market to extend it to the media
player market – in view of the indirect network effects. In this case the concern is
that both Jio and Facebook through Whatsapp could potentially use the market
dominance it has gained in the telecom and social networking services to create
dominance in the e-commerce market through unlawful anticompetitive acts. These
unlawful anti-competitive acts include tying, monopolistic refusals to deal, predatory
pricing, and new product proliferation.
 probability exists that any anti-competitive acts of Jio or Facebook would have the
dangerous probability of creating a monopoly in the online groceries and/or other
new markets entered into through Jio Mart as a Super-app. Having a significant
number of combined users, no other platform could begin to compare to Jio-FB
combined market power. It is not unreasonable to forecast that JioMart alone would
quickly become the dominant competitor in the hyperlocal market if free to do so,
just like Jio alone gained 380 million users in about three years.
 Portfolio effect. Increasing the range of brands, by bundling of say, telecom and
other service offerings or illegal vertical restraints, even predatory pricing. This in
turn may lead to greater ability of further leveraging, deterring innovation and
results in degradation of quality.
 Other concerns on data exclusivity post-merger could include whether consumers
will have a choice or how could the ecosystem leave consumers locked in. Does the
 consent for data collection include information that is not relevant for retail? Is there
potential for misuse of of power to generate and/or share more information that is
profitable to the platform, for instance, with the intention of suggesting a grocery
list? Such strategies often make the consumer totally dependent on the app
achieving a status quo bias.
Looking at the points above there a case for stronger engagement by CCI to scrutinize the
Facebook Jio Deal