SERVICES MARKETING

Reliance JIO Infocomm Ltd.

Submitted by:
Arth Patel (P39013)
Pratik Giri (P39040)
Saurabh Hirekhan (P39049)
Sibadittya Baidya (P39053)
Vivek Gor (P39058)
Jaimin Vyas (P39059)

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Telecom Industry in India

India is currently the world’s second-largest telecommunications market and has registered
strong growth in the past decade and half. The Indian mobile economy is growing rapidly and
will contribute substantially to India’s Gross Domestic Product (GDP), according to report
prepared by GSM Association (GSMA) in collaboration with the Boston Consulting Group
(BCG).

The liberal and reformist policies of the Government of India have been instrumental along
with strong consumer demand in the rapid growth in the Indian telecom sector. The
government has enabled easy market access to telecom equipment and a fair and proactive
regulatory framework that has ensured availability of telecom services to consumer at
affordable prices. The deregulation of Foreign Direct Investment (FDI) norms has made the
sector one of the fastest growing and a top five employment opportunity generator in the
country.

The Indian telecom sector is expected to generate four million direct and indirect jobs over
the next five years according to estimates by Randstad India. The employment opportunities
are expected to be created due to combination of government’s efforts to increase penetration
in rural areas and the rapid increase in smartphone sales and rising internet usage.

International Data Corporation (IDC) predicts India to overtake US as the second-largest

smartphone market globally by 2020 and to maintain high growth rate over the next few
years as people switch to smartphones and gradually upgrade to 4G.

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Introduction:
Reliance Jio Infocomm Limited (primarily called Jio) is an
Indian telecommunications services company wholly owned by Reliance Industries and
headquartered in Mumbai, Maharashtra, India. The company was registered in Ambawadi,
Gujarat on 15 February 2007 as Reliance Jio Infocomm Limited. In June 2010, Reliance
Industries (RIL) bought a 95% stake in Infotel Broadband Services Limited (IBSL)
for ₹4,800 crores. Although unlisted, IBSL was the only company that won broadband
spectrum in all 22 circles in India in the 4G auction that took place earlier that year.Later
continuing as RIL's telecom subsidiary, Infotel Broadband Services Limited was renamed as
Reliance Jio Infocomm Limited (RJIL) in January 2013.

Jio soft launched on 27 December 2015 with a beta for partners and employees, and became
publicly available on 5 September 2016. As of 31 May 2019, it is the largest mobile network
operator in India and the third largest mobile network operator in the world with over 322.99
million subscribers. It operates a national LTE network with coverage across all 22 telecom
circles. It does not offer 2G or 3G service, and instead uses only voice over LTE to provide
voice service on its 4G network.

Vision: Reliance Jio's vision for India: Broadband will no longer be a luxury.

Mission: To realize digital India vision, ensure Indians have highest quality and quantity data
access at majority affordable prices.

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Products and services
Mobile broadband

The company launched its 4G broadband services throughout India in September 2016. Jio
offers fourth-generation (4G) data and voice services, along with peripheral services like
instant messaging and streaming movies and music.

JioFiber

In August 2018, Jio began to test a new triple play fiber to the home service known
tentatively as Jio GigaFiber, including broadband internet with speeds ranging from 100
Mbps to 1 Gbps, as well as television and landline telephone services.

In August 2019, it was announced that the service would officially launch on 5 September
2019 as JioFiber. The company has a network of more than 250,000 km of fiber optic cables
in the country, over which it has partnered with local cable operators to get broader
connectivity for its broadband services.

Devices

1. LYF Smartphones

In June 2015, Jio entered into an agreement with domestic handset maker Intex to supply 4G
handsets capable of voice over LTE (VoLTE). However, in October 2015, Jio announced that
it would be launching its own mobile handset brand named LYF.

On 25 January 2016, the company launched its LYF smartphoneseries starting with Water 1,
through its chain of electronic retail outlets, Reliance Retail.Three more handset models have
been released so far, namely Water 2, Earth 1,and Flame 1.

2. JioPhone

The first model, released in August 2017 was positioned as an "affordable" LTE-compatible
feature phone. It runs a suite of Jio-branded apps (including the voice assistant Hello Jio), and
a Jio-branded application store. In July 2018, the company unveiled the JioPhone 2, an
updated model in a keyboard bar form factor with a QWERTY keyboard and horizontal
display. Jio also announced that Facebook, WhatsApp, and YouTube apps would become
available for the two phones.

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 3. JioFi

LYF-powered JioFi is a portable broadband device that allows multiple users and mobile devices
to access Jio's 4G high-speed internet connectivity and create a personal Wi-Fi hotspot. The LYF-
powered JioFi device can connect a minimum of 10 devices + 1 USB connection, with some
models having the ability to support many more connections.

4. Jio Apps

In May 2016, Jio launched a bundle of multimedia apps on Google Play as part of its
upcoming 4G services. While the apps are available to download for everyone, a user will
require a Jio SIM card to use them. Additionally, most of the apps are in the beta phase.
Notable apps include:

 JioChat - instant messaging app

 JioCinema - online HD video library
 JioCloud - cloud-based backup too
 JioMags - e-reader for magazines
 JioMoney Wallet - online payments/wallet app

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 JioSaavn - for online and offline music streaming in English and Indian languages
 JioSecurity - security app
 MyJio - manage Jio account and digital services associated with it

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Need fulfilled by JIO

Bharti Airtel, India’s second largest telecom services provider in terms of market share,
acquired 4G licence only in four of the 22 circles - Kolkata, Karnataka, Punjab and
Maharashtra (excluding Mumbai) and their gradual launch hasn’t brought any substantial
result so far.

But in October 2013, Reliance Jio surprised the market by securing a unified licence for all of
the 22 circles that enabled it to offer voice, along with the 4G data service, providing Rs
1,673 crore (Rs 16.73 billion) of additional fees to the government, a move that showed a
change of stance by the Department of Telecommunications (DoT), which had earlier
earmarked the 2,300-MHz band only for 4G data service on TD LTE technology.

Though that improved Reliance Jio’s capability, it still wasn’t strong enough to lure
customers in an established market, as the quality of voice on the 2,300-MHz band was
poor.But with an approved bid for spectrum in the 900- and 1,800-MHz bands, the company
delivered a stinging blow to competition.With its introductory free data and voice services,
the market consolidated into three big providers, including Vodafone Idea Ltd., which
completed its merger at the end of August.

There are multiple things that Jio does to ensure that it can deliver its key value proposition to
the customers which is- superior network availability and convenience at a lower cost.
Convenience includes multiple factors such as ease in buying SIM cards and Wi-Fi devices,
accessibility to 4G network at every corner, quick grievance redressal, option of customising
data packs, etc.

The company has worked out a strategy to use 1,800-MHz spectrum as the primary one to
offer voice and 4G broadband services to consumers. It plans to use the 2,300-MHz band
only to supplement its service to enterprise customers in high-population-density business
districts.
Typically, enterprise customers require very high bandwidth, and with the 2,300-MHz band
whose coverage proposition or cell-site radius is low, it will be efficient to use it in high-
population-density business areas.

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In the last annual general meeting of the company a senior executive involved with the
launch plan of its telecom service pointed out thatJio’s offerings, unlike any other mobile
operator, will be a combination of what Omnitech, Verizon and Google offer i.e. it plans to
focus on mobile-based enterprise solutions for small-scale businesses, besides traditional
mobile services and voice over internet. (OmnitechInfoSolution is an information technology
outsourcing company providing business-to-business solutions. Verizon is a fullscale mobile
service provider in the US, with offerings as diverse as WiFi, wireless, internet television and
LTE (long-term evolution) technology-based mobile services. By referring to Google, the
company means the voice over internet service.)

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Service Offering
Attributes targeted for excellence

1. Network Advantage: Offering a 4G only service, Jio became the only operator in
India to do so. Being a greenfield operator, it can also capitalize on the advantage of
building a network that is capable of upgrades to 5G, 6G and other future spectrums,
easily. Unlike the existing players in the telecom industry, Jio does not have to invest
in maintaining and operating outdated and expensive 2G and 3G lines. The company
also has the highest capacity to accommodate future data demand - 129k TB/day -
which is 25% more than India’s biggest telecom operator, Vodafone Idea Ltd.
2. Product Offering: Unlimited free voice calls, a Jio suite of products that includes
JioTV, which allows HD streaming on your phone, inexpensive 4G phones under
their 'LYF Smartphones' brand, and portable Wi-Fi routers that allow tapping into the
Jio network to use data on devices other than a smartphone. Reliance created an end-
to-end user product through Jio – cheap hardware, advanced technology at discounted
prices and a gambit of software offerings.
3. Pricing: The prime aspect that sets Jio apart is its pricing strategy. With the lowest
data rates in the world, Jio sent shockwaves through the Indian telecom industry. Data
plans ranging from $0.3 to $80 a month, the company focused on simplifying tariff
plans to cater to a wider audience. Prior to Jio, customers were paying $0.1/min for
voice calls and $4/GB for data on average.Jio made all the operators to cut down the
cost of 4G charges, this led every Indian towards Digital India. Earlier getting 1GB of
Internet on mobile was hard on pockets now this has become a piece of cake,
irrespective of the usage either from a student to daily wages worker.
 In his launch speech, Mukesh Ambani emphasized that India had over 22,000
tariff plans from all operators and Jio's aim was to make it simple for customers to
understand. The image below compares tariffs between Jio and the existing
operators. At the end of 2016, India's 4G consumption stood at 8,050 TB (i.e. 13%
share of all data consumed) which makes it evident that the 'unlimited voice calls'
was the offering that Jio banked on for similar price points as competitors.

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4. Aggressive Entry Strategy: With the aim of testing network capacity and acquiring
100 million subscribers within 90 days of launch, Jio introduced an offer that would
provide free unlimited services for customers who signed up before the 90 days. The
offer was unexpectedly extended for another 90 days thanks to a loophole in the TRAI
regulation. Jio eventually met its target subscribers within 180 days of launch, which
was 8% of the market share.
 We’ve often read about the barriers to entry in an industry where rivals will try to
cut out new competition. Jio, on the other hand, took the industry by storm
through strategic business moves and calculated financial risks. A key pillar to
this disruption was the financial backing of RIL, with an initial investment of $25
billion.Reliance Jio embarked on a mission to push India into the digital age and is
on course to capture 50% of the market share by 2021.

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Jio’sRevenue Model

So what is Jio's business model in making voice calls free? How are Jio’s internal operations
designed to support its service concept?

When talking about making profits, it needs to be mentioned that at the moment, Reliance Jio
is focused on building economies of scale and the concomitant efficiencies and leveraging the
synergies that accrue from integrating the end to end mobile telephony value chain. further,
Jio is narrowly focused on “stickiness” which is the term used to describe how users who
once sign up to its offerings would stick to it and for this to happen, its pricing has to be very
appealing and its discounting very aggressive. No other network except maybe BSNL has
pan-India network which can distribute its cost over the maximum population. The maximum
the population, which the network provider can capture the lower will be the cost. Since
Reliance Jio has set up pan-India network at around ₹ 2 lakh crore, it can reach out to even
remotest parts of India thus having maximum possible customers. So, what others provide for
₹250, Jio can provide for ₹50, also there is a huge profit element which other networks
included in the price they charged because telecom companies act like a cartel whereby all
companies have a mutual understanding to keep prices high.

For understanding its revenue model, we have to understand what revenue really is. Once the
infrastructure is built, the running costs of a telecom network is low. A network therefore
does not incur costs per call, or cost per data packet it transmits. Consequently, revenue is not
the revenue per call or revenue per Gigabytes of data, but what the telecom company extracts
from a consumer per month. Or in telecom language, the average revenue per user (ARPU).
This is what Jio is betting on.Jio wants to extract more money from the consumers by
providing them with free voice calls as compared to the current tariff charges that you have to
pay for the same to other telecom providers.
Here are a few possible ways Jio is planning to make money in this sector:

Jio will probably make more money by giving its users free calls than other incumbents can
by charging you for it. The monthly average revenue per user (ARPU) in India, for industry,
is generally around Rs 130 to Rs 150. ARPU is essentially the revenue a company generates
per month per user. So, if a user spends relatively more money than this, he/she becomes a
high-value customer. Meanwhile, if we look at the tariff plans of Jio, their minimum plan is

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of Rs149 which is applicable for 28 days. The Rs 149 plan basically gives the user free calls
and a negligible amount of internet. This means that you as a Jio users are anyway paying the
company around Rs 150, which is the ARPU. So, anything paid above it is a profit, and
automatically raises the revenue of the company per user. So, Jio is basically giving the user
more than other companies, yet is earning more.Unlike other telecom companies, Jio does not
have any existing voice customers; they lose nothing by offering free voice. In order to get
free voice, the consumer will have to subscribe to a Jio data plan. As long as the average
revenue per user remains high, Jio has no problem giving away voice free.Kotak Institutional
Equities had said that Jio’s Prime membership of 72 million customers right now is larger
than the ‘most sanguine expectations’ its expectation is that Jio’s subscriber base to rise and
reach to 211million by end of the fiscal year 2023 and its ARPU will be around Rs 245-250
per month.

Jio has already disrupted pre-paid mobile market and the company now plans to leverage the
technology, infrastructure and user base to enter into newer business segments of the telecom
market. At the AGM, the company announced that the trial runs for JioFiber are nearing
completion and the home broadband services are expected to be rolled out. The markets size
for home and enterprise broadband is pegged at 18 million and 45 million, respectively. At 5
percent market penetration, these two segments together could add another Rs 6,000 crore to
Jio’s top line in the next 2 years. The digital offering also stands to benefit from
complimentary revenue streams such as interactive gaming as well as revenue and cost
synergies related to the acquisition of cable operators - GTPL Hathway and Den networks.

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Employee Management System
Reliance Jio believes that employees are the biggest asset and emphasizes in developing and
nurturing the talent it recruits. The Human Resources team collaborates with the business to
define the human capital strategy and drives management strategy. The Human Resources
team ensures that a performance driven culture is developed within the organization which
motivates the employees to work towards achieving the strategic goals set by the
organization. Jio offers challenging projects and an empowering environment where one gets
an opportunity to work with the senior leadership team to implement best ideas and
programs. Reliance Jio offers services across 18,000 cities and towns and more than 200,000
villages through a network of 1,215 offices and a formidable team of over 1,50,000
employees across India. As one of India’s youngest start-ups, the average employee age at
Reliance Jio is 30 years, making Reliance Jio an organization of the young, by the young, and
for the young.

Selection and Retention

The telecom company has tied up with 6,000 colleges, including technical institutions, across
the country where there are some embedded courses to make students ‘Reliance ready’.
Besides, the company also hires through referrals and social-media platforms.

Currently, Reliance Jio has an employee strength of 157,000 people. For Reliance Jio, it’s
not just about 1,57,000 people on the roll today. What’s more important is the number of
people who are associated with Jio. Jio also has one million retailers who are on board, each
one impacting two to three employees and Jio looks forward to engage everyone and holistic
development of the organization as well as the people associated. The company has an
attrition rate of 32 per cent in sales and technical functions at constructions sites. However, at
the headquarter level, it is just two percent against an industry average of 18 percent. Some of
the HR strategies have led to such scenario. Such as, Reliance Jio rolls out stock options for
its senior executive employees, which acts as a talent retention and attraction strategy of the
company.

Training and development

This function helps the employees to develop their skills and knowledge for increasing their
output. This process is not only done for the freshers but also to the existing employees in the
firm to develop their skills and responsibilities. Following types of training are given by the

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specialized trainers for development of employees: programmed learning, apprentice training,
audio visual based training, computer-based training, simulated training, lectures

Reliance Jio helps the employees to attain a good career graph based on the company HR
policies and procedures. First of all, the company gather the strength and weakness of every
individual, then they provide different opportunities to develop their career based on the
strength and weakness. The basic formula for the career development is self-awareness every
individual assesses their own problems and issues and then the company will help to
overcome the issues.

Performance Management System

Reliance follows a very elaborate performance management system for its supervisory staff.
The performance system is online and also takes care of the learning aspects. The system is
based on SAP ERP with special emphasis on measurement of all competencies. It follows
Performance and Development Planning (PDP) process. This process helps the employees
make the most of their working life. The process supports the employees in identifying and
delivering against challenging goals that impact the organization. It helps them plan how to
develop skills and leadership behaviors in their current position and for the future. The
system is designed to provide an opportunity to clarify expectations and discuss future
opportunities. The performance cycle is followed annually. Business level balance score card
is prepared and action points are prepared. The appraisals are done on three grading bases. In
case of workers, settlement is done on a long-term basis. The Performance and Development
Planning process provides a continual process that allows for a thorough evaluation of the
performance.

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Customer Management System

Jio has two types of customers-

A)General Population and

B) Corporate Clients

(A) General Population

Jio makes sure that all the customers who use the service of Jio are well satisfied. If at all any
mistake occurs by the system Jio makes sure to resolve the problem through customer care,
retail service shops, and individual agents and also apologize for that matter. In this way, it
makes sure that the customer base developed should not be hampered. Jio offers a range of
services at an affordable rate and also various type of application which has a huge customer
base. Another good feature that Jio offers a variety of application for its customers like Jio
TV, Jio Cinema and Jio Music. Jio has network coverage in the outskirt of the city also
because of huge investment in infrastructure for coverage. Jio also has a good customer care
operation where customers complaint is solved quickly also Jio has manual settings through
which any network issues can be resolved quickly. They have many agents also who help the
customer in their problems.

(B) Corporate Clients

Here Jio has made a direct tie-up with corporate customers and they offer them premium
services at lower costs. All the corporates have to enrol their employees into Jio’s service so
that employees’ record is maintained in their database. Employees can select any service as
per the deal that they have made with Jio. Also, it offers corporate ease to check expenses of
their employee usage and they can download the invoice from dashboard anytime and it also
saves employees from the hassle of claiming the usage amount. If a client faces any issues
related to network issues, one agent is being allotted to a few clients who can resolve the
problems as soon as possible.

What type of behaviour is required fromthe customer?

The company are not taking too much time to resolve the issues related network. If customer
co-operates, a company can improve its service in less time. Also, these services are very
price sensitive and it is offer based services. Switching cost is very less and also it will take 5

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to 7 days to change the service provider. Many customers are not loyal to the service
provider. In this scenario, the company has to offer a lower price and good network compared
to competitors. The customer wants network everywhere which is very difficult for any
service provider. In this case, a company can increase its investment in infrastructure in rural
area and outskirts of the city.

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Probability of success
Within three years of starting its commercial operations, Reliance Jio has become the
country's largest telecom operator with a subscriber base of 331.3 million, surpassing
Vodafone Idea which on July 26 reported a decline in its user base to 320 million by June
2019. Jio entered the telecom sector in September 2016 with cheap data plans and affordable
handsets, which led to an unprecedented rise in mobile data consumption in the country, with
an average user consuming 11 GB data per month. While the telecom industry also witnessed
intense disruption, shrinking revenue streams, bankruptcy and, finally, consolidation, the last
three years have been monumental as 4G coverage soared and became a catalyst for the
growth of mobile data and new applications and services, especially in the content ecosystem.

Reliance Jio began its services by offering free of cost SIM cards, free voice calls over a 4G
network, and cheap data at Rs. 22 (33c) per GB. Because of these early offerings, the
telecom’s subscriber numbers crossed the mark of 100 million in just 170 days.

As its userbase grew, the company offered cheaper data plans. As of today, some of its plans
offer data at Rs. 3.17 (5c) per GB, which is the cheapest in the world. Jio also offers free
content through a bunch of apps including JioTV, Jio Cinema, Jio News, and Jio Saavn
(previously Jio Music).

In 2017, the company launched a ‘smart’ feature phone running KaiOS called JioPhone that
came with apps like Twitter and Maps. Its successor, JioPhone 2, was launched a year later
and brought popular apps like Facebook and WhatsApp to the platform.

When Jio entered the market, it forced competitors to slash their prices; bringing data rates
down to Rs 15 per GB (22c) from Rs 250 per GB ($3.63) on an average. It also notes that
Indians now consume 3.7 billion GB data per month as compared to 200 million GB per
month, three years ago, representing an 18.5x increase.

To solve the availability problem, Reliance has tied up with around 20 smartphone brands
including Samsung, Micromax and LG to bundle Jio SIM cards with them with free voice
and data for three months.

Reliance Jio redefines the mobile experience for users with several built-in applications. With
more than 300 live channels, 6,000 HD movies and over 3 million songs. io Mags and News
Xpress gives you access to thousands of latest magazines and newspapers in 10 languages.
Jio Cash will enable a user to go cashless while shopping through apps.

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Nowadays each company offer more or less same plans. So price, internet speed, coverage
area matters a lot to success.

A report released in March indicates there are over 566 million internet users in India.
However, there’s still a large chunk of the population that isn’t online yet. Hopefully, it won’t
be long before the rest of the country is empowered with internet access. This all points prove
that Jio has a good future and will continue to grow in future also.

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