Getting to the №1 Position is Becoming a Habit for Reliance Jio
The past month or so, has been pretty eventful for Reliance Jio, starting with becoming India’s no. 1 telco in terms of subscriber base, after overtaking Vodafone-Idea. Then JioFiber was announced to roll-out on September 5th, which took the media by storm. Now, they are the biggest telco of India, in terms of revenue as well, with 31.7% revenue market share (RMS). This happened regardless of them clocking a modest growth of 15 basis points (bps) in the June quarter, as compared to Airtel’s 277 bps for a 30% RMS to slot in at no. 2. Vodafone-Idea, the former no. 1, plunged 403 bps sequentially to 28.1% as it lost market share in 19 of the 22 circles.
Jio has managed to become no.1 in both, subscriber base and in RMS, in approximately 3 years. Taking down seasoned competitors like Airtel and Vodafone-Idea who have been in the market for decades. Jio has also been the only network that has been adding a good chunk of customers every passing quarter for last few quarters.
According to a report by ICICI Securities, “RJio AGR (including national long distance or NLD) rose 9% year-on-year to ₹10,900 crore, and finally became the no. 1 operator. The adjusted gross revenue (AGR) growth is significantly higher than the reported revenue growth of 5.2% quarter-on-quarter due to reducing losses on interconnect usage charges which is reflected in terms of lower access and roaming charges.”
All this begs the question, how is Jio making it all look so easy?
Jio got just the perfect start by disrupting the market with their free 4G offering. Initially, they offered their services free of cost for a few months. After they started charging for their services, most of the market experts along with the consumers expected them to increase the prices drastically in the months to follow. To everyone’s surprise, Jio continued to keep up with their promise of offering better service at affordable prices.
If we talk about their business plan, to put it simply, they made the right bet by investing in 4G rather than putting their money in older technologies like 2G and 3G. They were the first ones to spread 4G PAN India, while the competition was barely getting started with offering 4G in the metropolitan areas.
They also did not think of just putting out a product that will work for the time being, rather they focused on working on a long term plan. They created a customer-friendly brand that offers innovative products for reasonable prices. While the competition was trying to squeeze out as much money as they could, Jio offered economical pricing and better quality. Jio made sure that they enter every possible market by launching a whole host of products alongside their 4G network. Whether it’s OTT, live TV, music, or anything else, Jio had a product to offer. They made sure that they are omnipresent in the market. They made their own little ecosystem of offerings, so that a consumer would never have to look anywhere else for anything.
While Jio was focused on being innovative, competition was caught up in a race to catch up to the prices and offerings of Jio. Where they lacked in terms of being adaptive, Jio excelled. They managed to build a loyal customer base over the 3 years of their existence, something their competition never cared about. Airtel and Vodafone-Idea were focused on getting the highest returns from their high-value customers by offering overpriced services to them. They didn’t realise that this plan of theirs won’t work in the long run.
Urban-Rural Warfare
If you take a look at the data above, you will see that Jio is clearly leading in the tier-2 and tier-3 cities, except Kerala. That goes to say that while Airtel and Vodafone-Idea clearly failed to acknowledge the rural sector of India. They thought that the people from rural areas won’t be a good fit to maintain their ₹250–300 ARPU. Whereas, Jio proved them wrong by capturing the rural market with low-priced plans and JioPhone. Jio was able to constantly grow their subscriber base and stay profitable while maintaining an ARPU of ₹100–120. Jio made sure to reach the obscurest places in India, to make internet available to them. They are maintaining the perfect balance by addressing both the urban and rural sectors of India. They have managed to stay on no. 2 in most of the metros and tier-1 cities, likely to take over the no. 1 spot soon. In some rural areas like Bihar, Orissa, Rajasthan, etc., Jio has more subscribers than Vodafone-Idea and Airtel combined. Their strategy didn’t only work out wonderfully for their brand, but also helped the notion of Digital India to flourish.
These are our two cents on this business milestone. If you wish to know more about how Jio managed to become India’s no. 1 telecom operator, you can read a blog we wrote a few months ago. How long will Jio be able to hold on to their lead? When will the competition wake up and smell the coffee? To follow this and for all the latest updates from the tech world, stay tuned to our publication.
