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Reliance Industries revolutionized the telecommunications domain when it created and
launched Jio in the Indian market in 2016. At present, Jio is the telecommunications market
leader and has a total subscriber base surpassing 400 as according to the subscriber data
released by Telecom Authority of India. Jio accelerated digitalization in India by bringing in
the cheapest 4g data plans and consequently shifting the telecommunications industry focus
from voice-based to data-based plans. Jio has truly transformed the lives of many Indians.
On June 29th , 2022, Jio entered a new phase with Mukesh Ambani stepping down as the
company’s director and Akash Ambani taking up reins as the chairman of the company.
Akash Ambani joined Jio in 2014 and since then has played a key role in establishing the Jio
brand, creating the digital ecosystem to launch Jio’s 4G and the Jio-phone, as well as
overlooking major acquisitions for Jio growth. Him becoming a public face for the business
is predicted to bring in the enthusiasm of an energetic new age business into the market.
Responding to the change in leadership, the market shares of RIL plunged 100 basis points on
27th of June, but soon regained their positive position and the stocks were traded at a slightly
higher rate in an otherwise bearish market; thus signaling that the change in management is
indeed being cheered for. It is going to be a hearty meal for the existing shareholders as there
has been quite an optimism on business side and more investments are estimated to pour in
with the initiation of 5G.
The share value which stood at Rs. 512 back in 2016 when the industry used to depend on
voice-based services for revenue (almost 75%) has now appreciated to a remarkable Rs.
2407. This happened because earlier operators pushed to occupy market share through
competitive pricing, which Jio revolutionized. Catering to their price sensitive Indian
consumer base, the telecom operators had forever experienced strong price based competition
in order to offer one of the lowest tariff rates and maintain their image with the value
conscious customers. Jio reformed this base on which competition used to pick up by
providing a lifetime free calling service for its subscribers accessible from any network and
any place across the country. The newly introduced 4G LTE (Long Term Evolution)
technology enabled Jio to support voice based transmissions too as a result of which it could
offer these services without incurring any expense.
When costs on the side of producer sink, expenses for the consumer will decrease and this is
exactly what happened with Jio too. The per GB average prices plummeted from Rs. 152 to
an astounding Rs. 10. This has drastically increased the consumer base as internet was now
available and affordable to larger and newer segments of Indian population, many of whom
accessed it for the first time. Jio has successfully expanded its reach to almost 100 million
users just by reducing the price of data. As the expenditure on mobile talk-time and internet
decreased, the estimated annual savings from households summed up to a whopping Rs.
60,000 crores.
Jio’s business model helped the company to portray itself not just as a telecom giant offering
feasible calling and data services but as an inclusive digital platform. Jio made internet
available in every corner of the country by installing public hotspots from which users can
access high speed free internet. It also provided many devices on the Jio network that enabled
houses to have accessible Wi-Fi connections and even brought in digitalization the
marketplace via Jio-Krishi and Jio-Merchant to help farmers and retailers be more
competitive in the marketplace.
These initiatives have enabled Jio to enjoy a strong and loyal consumer base that continued
subscribing even when they were being charged for the services. Its large consumer base and
demand for services can result in Jio entering the 10 Lakh crore market cap in the next two
years. Furthermore, econometric analysis has shown that Jio and can push India’s GDP by
5.65% if the business environment remains healthy in the country. All in all, Jio is a key
player in the Indian digital movement and is a key reason for India robust digital economic
transformation.
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