Jio's competitiveness at the Global level
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This is a paper for the general public. Content copyright.belongs to Wasim Rahman of Indian Institute of Technology Bombay who presented this at International Conference on Management of Technology 2020 Cairo, Sep 2020.
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Jio's competitiveness at the Global level
- 1. See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/342658494 Jio's competitiveness at the Global level Presentation · July 2020 CITATIONS 0 READS 202 1 author: Some of the authors of this publication are also working on these related projects: How can Jio provide a thrust to India at international competitiveness? View project Wasim Rahman Indian Institute of Technology Bombay 2 PUBLICATIONS 0 CITATIONS SEE PROFILE All content following this page was uploaded by Wasim Rahman on 03 July 2020. The user has requested enhancement of the downloaded file.
- 2. Project Reliance Jio Infocomm Ltd Wasim Rahman- 199278047
- 3. Contents • Why Telecom? • Why Jio? • Problem Statement • Objectives • History of Jio • Technological Advancements of Jio • Quick Benchmarking • EMOT • VRIO Analysis • Critical Success Factors • Competitive Analysis of Jio • Root Cause Analysis • Strategy Diamond • Appendix • References
- 4. Why Telecom? • The Indian telecom industry is one of the most lucrative industries. • As per the statistics, India is the world’s second largest market in terms of internet users. • Gross revenue of the telecom sector stood at Rs 61,535 crore (US$ 8.93 billion) during April-June 2019. • The number of internet subscribers in the country is expected to double by 2021 to 829 million and overall IP traffic is expected to grow 4-fold at a CAGR of 30 per cent by 2021.
- 5. Why Telecom? • It is expected that more than 100 companies worldwide will have begun testing private 5G deployments by the end of 2020, collectively investing a few hundred million dollars in labour and equipment. • By 2024, the value of cellular mobile equipment and services for use in private networks will likely add up to tens of billions of dollars annually. • 100% FDI is allowed in the telecom sector (of this up to 49% is allowed through the automatic route and beyond 49% under government route). There are a lot of opportunities for Indian telecom companies to gain a competitive edge over competitors nationally and also boost their growth in 5G when compared to operators at a global level. Criteria Worldwide India Telephone Subscribers 8.5 Billion 1.17 Billion Mobile Broadband subscribers 7.7 Billion 0.661 Billion Gross Revenue (2019-20) $ 2.4 Trillion $ 27.34 Billion CAGR ~5% ~7.3% FDI (2019-20) - $ 4.28 Billion
- 6. Why JIO? • Jio has been ranked 17th Fast Company’s 50 most innovative companies list and It has topped the list of most innovative companies in India. • It has raised more than Rs. 1 lakh crore in equity capital in the last 9 months. • Reliance Jio has built a next-generation broadband infrastructure by installing over 100,000 new cell towers and laying 155,000 miles of fiber cable. • The company filed 192 patents in 2017/18 and 373 in 2016/17 -- it was granted 68 and 60 patents, respectively, in the two years. The company has got 186 patents granted in the last four years. Over 900 scientists and engineers are working in the R&D division that has 24 labs in the 1.2 lakh sq. ft. R&D headquarters in Reliance Corporate Park (RCP), Navi Mumbai. Apart from providing telecom services, Reliance Jio has been working on rolling out a lot of other services listed below:
- 7. Problem Statement Reliance Jio started offering its service as recent as 2016. Yet, in a matter of few years it disrupted the entire Indian Telecom. industry and changed the landscape, emerging itself as a prominent player. It is now set on a path for global recognition and perhaps in becoming a dominant player in International market. What makes Jio different from its global peers that it has reached such heights in a short span of time? Do Quick Benchmarking with another suitable global telecom behemoths. Apply qualitative methods for analysing competitive advantages and disadvantages of Jio and its competitors, such as EMoT and Critical Success Factors. Delve further for more insights by doing a VRIO analysis. For the weaknesses that are identified, use Root - Cause analysis for narrowing down the causes of the pain points for Jio. Finally, by employing Strategic Diamond, make a proposal to Jio about what should be its course so that it can provide thrust to India in International Competitiveness.
- 8. Objectives Gain an understanding of how global telecom companies are quick in mobilizing a concept Use the Quick Benchmarking method to benchmark Jio with its international competitors Analyze the competitive advantages of all these firms Make Elements of MOT table for competitive analysis Carry out VRIO analysis of Jio for more insights Do a Root cause Analysis of Jio and find out areas of improvement Develop a Strategy Diamond for Jio
- 9. • Jio Apps Launched • Commercial roll-out of services in September • Surpasses 50 million subscribers within 83 days of launch • Jio starts beta trials of Jio Gigafiber. • Releases Jio Phone 2 2010 2016 2018 Infotel Broadband renamed as Reliance Jio Infocomm • Launched its Jiophone • Announced acquisition of wireless spectrum, tower, fiber and MCN assets of Reliance Communications • Launched Digital Udaan for first time users • Partners with Microsoft Azure 2013 2017 2019 Reliance Buys 95% stake in Infotel Jio launches 4G services only for RIL staff 2015 • FB invests $5.7 billion in Jio for Jio Mart (e- commerce) • Jio showcases Car Connect technology, a small IoT module supporting 4G LTE 2020 History of Jio
- 10. NB-IoT is a low-power wide area network (LPWAN) radio technology standard. It allows efficient communication, extended battery life for many distributed devices and lower cost for vast geographical footmark Narrowband IoT Integrated network management allows companies to better track and control expenses related to the existing telecom network. The main objective of integrated network management to achieve an error- free network and improve performance Integrated Network Management Carrier Wi-Fi is a collection of technologies that enable operators to scale up their Wi-Fi access points, improving capacity, performance, security and energy management Carrier-grade Wi-Fi Communication providers can potentially use the cloud to deliver higher quality, more flexible and more scalable enterprise IT services at lower cost than on-premise solutions Cloud Computing With the emergence of the Internet of Things technology and location-based sensors like GPS, telecom operators can get a better visibility of supply chains, track, and monitor the location of goods, locate the workers’ position and increase the business efficiency Location tracker Jio’s Car Connect is a combination of a hardware device and a mobile app aimed to connect 90% of the cars on the Indian roads by the year 2020. The solution was powered by OBD (Onboard Diagnostic Device) with a Jio SIM inside, which will be connected to the ODB port of the car. The OBD would be giving users access to the entire ecosystem of Jio Apps – Jio Music and Jio Cinema etc. Telecom Cloud Technological Advancements of Jio
- 12. Elements of MoT (EMoT) Element of MoT Firm/Institute Remarks Technology Selection Verizon Every year Verizon makes its predictions for technology trends that are most likely to impact our global enterprise and government customers Technology Transfer AT&T AT&T has spent nearly 9000Cr INR on R&D. It has collaborated and used technologies of other companies mostly by acquiring them to develop its own solutions Technology Upgradation AT&T AT&T has spent about $4 billion to improve its overseas network eg: fortifying undersea cables and high-speed terrestrial fiber lines and building data computing centers in Britain, France, Germany and the Netherlands. Technology Absorption AT&T The company tests new technology by releasing it to the customers in small regions. It is constantly working towards technology like Data Science & AI, 5G, Open source etc New Product Development AT&T Apart from telecom services, it is also innovating in the field of Data Science & AI, Open source and software International Tech Commercialisation AT&T Already being present in 190 countries, its tech commercialisation is strong. It has been working on designing its infrastructure in order to accommodate new requirements and changes with respect to different countries. Tech Development Verizon The Verizon Innovation Centers, located in the Boston and San Francisco areas, were created to help entrepreneurs and inventors connect their new devices and software to the Verizon network and develop new technologies.
- 13. VRIO Analysis Resource/Capability Valuabale Rare Imitability Organised Remarks 5G Yes Yes Yes No Temporary Competitive Advantage IoT Yes Yes Yes No Temporary Competitive Advantage R&D Yes Yes Yes No Temporary Competitive Advantage Network Quality Yes Yes No No Competitive Parity Strategic Collaberation Yes Yes Yes Yes Sustainable Competitive Advantage VoLTe Technology Yes Yes Yes Yes Sustainable Competitive Advantage Product Variety Yes Yes Yes Yes Sustainable Competitive Advantage Ability to innovate Yes Yes Yes No Temporary Competitive Advantage Ability to raise capital Yes Yes Yes No Temporary Competitive Advantage Customer Experience Yes Yes Yes Yes Sustainable Competitive Advantage B2B opportunities Yes No No No Competitive Disadvantage Low cost offerings Yes Yes Yes Yes Sustainable Competitive Advantage Global Brand Popularity Yes No No No Competitive Disadvantage
- 14. Critical Success Factors Technology Pricing Eco System Innovation • VoLTE: Voice over Long-Term Evolution • Provides a more efficient use of spectrum than traditional voice • Less expensive to maintain • Unleash the power of fibre optic network to give super fast internet and make people realize that 1GB data is not really much. • It costs 0.05 paisa for a call on IP network but in the traditional 2g/3g it costs higher • 100% of jio voice traffic is on VoLTE but competitors have only 30% • Hence services at lower prices • High subscriber base by having good customer care and awesome plans. • Ranked 17th in Fast Company’s 50 most innovative companies and top innovator brand in India • Has dedicated innovation center, Reliance Innovation Council • Not just the calling service but a bunch of VAS • Entertainment apps like Jio Movies, Music, News at free subscription rates unlike competitors • Even the hardware like jiofi, jio phone • Let everyone switch to Jio or at least buy a Jio sim to experience data for free.
- 15. Competitive Advantages of Jio: • Recent investment from FB of $ 5.7 billion for commercialisation and launch of Jio Mart • High R&D Expenditure as % of Revenue, thus Jio is investing very heavily on its research and development • Strong backing of parent company Reliance Industries • Multiple offerings under a single name- jio music, jio cinema, jio pay etc. • Very low cost to execute & operate fible optic 4G network per million subscribers • Low cost per patented invention • Huge investments from different sources- over 60,000 crore rupees in the last three months • Growing community of start-ups working on Jio-services/products related Apps, other technologies • Strategic collaborations with Google to manufacture affordable 4G handsets which will run exclusively on Jio network • Collaboration with Cisco for the automation of complete lifecycle management of all the building blocks of an IP/MPLS backhaul network to minimize human efforts and error Competitive Disadvantages of Jio: • Very low revenue per user • Very low Net Forex Income (negative) • Low revenue as compared to its international competitors • Low R&D expenditure • As the number of users have increased, the 4G speed has come down • Late entrant in the market as compared to its international competitors • Network and compatibility issues as it only supports VoLTE which is supported by only the latest mobile devices. • Major focus till very recent was to gain market share of customers and not revenue. It has started charging prices very recently. Lorem Competitive Analysis of Jio
- 16. • Jio GenNext platform to interact with startups and develop capabilities in AI, robotics, Big Data and IoT • It has teamed up with a group of international telecom service providers for the Open Test and Integration Centre (OTIC) initiative for Operator Defined Next Generation Radio Access Networks (O-RAN) architecture and interfaces. • Collaboration with Star to broadcast all the televised cricket matches on JioTV • Jio Giga Fibre technology on which the Jio DTH will be launched • Collaboration with Disney to boost its content offerings • Jio Enterprise services which will include unified communications, cloud services, managed video conferencing, cybersecurity • Significant Acquisations: Saavn (music streaming), Haptik (conversational AI), Embibe (learning and edtech), Reverie (Indic language software), NowFloats (SaaS for SMEs), Den Networks and Hathway (cable and broadband), Radisys (5G and IoT) • With optical fibre in 1,600 towns, and a partnership with Microsoft, it is set to commoditise cloud applications which can be further scaled to international markets • Late entrant in the Enterprise services • Cloud services are not being deployed extensively • Late entrant in the IoT market as compared to its international competitors • It is only targeting small and medium enterprises currently for its Enterprise services after failing to woo Apple and Flipkart
- 17. Root Cause Analysis Widening gap between Jio and global players due to latency in adopting Cloud computing, 5G and IoT Lack of incentives Late entrant in the telecom industry Inadequate capital for capital intensive portfolio diversification Management focus on customer retention Government sops/ regulations Lack of customer awareness to adapt to the new technology Unable to gain synergies due to relatively lower number of strategic alliances Nascent stage of R&D and self-developed technological capability Large investment in other business units Very low revenue per user Focus on serving untapped market with conventional offerings Price wars due to intensive competition in existing offerings External Internal
- 18. Strategy Diamond VEHICLES DIFFERENTIATORS STAGING • Optical Fibre technology for saving cost and improving speed. • VoLTE technology for better connectivity. • Huge investments from multiple sources. • Plethora of service offerings which can be connected through IoT. • The coverage is backed by pan India 4G spectrum across three bands and the best fiber and tower infrastructure in the country, providing the best network experience and farthest reach. • Economic pricing for acquiring customer base • LTE technology and 4G spectrum across 3 bands • Optical Fibre and Infrastructure • Significant Investment • Strategic Collaborations with the biggest companies in the world: FB, Google, Microsoft • Huge Research and Development Investment • Superior Data experience - enough throughput for the highest end applications • Seamless Service experience, i.e., Seamless Voice, Video and Messaging experience • Jio must make use of all its service offerings to the fullest. Jio apps have already been in existence for long. It should start promoting them so that more people can join its network base. • IoT services will take at least 2 years to be fully functional. It is still in the testing phase. • By the end of 2021 Enterprise services will be offered by Jio • Jio Mart will also take atleast a year to start its operation • Jio offerings – Jio4GVoice, MyJio, JioNews, Jiosaavn, JioHealthHub, JioTV, JioCinema • Extensive infrastructure deployment with multiple spectrum band will give Jio unparalleled network capacity, low latency and high speed • Tapping into the enterprise services and B2B sector will give it a huge boost. • Jio’s 4G coverage will allow it to serve underpenetrated areas and is approach its target of 99% population coverage along with IoT technology • Jio’s distribution network of over 7,600 Jio Stores (through Reliance Retail) and over 1 million retail touchpoints will help in serving its expanding customer base ECONOMIC LOGIC • With almost half a billion number of people as its subscribers, it can start charging them for services which it has been offering at a very low price • Once people start using its IoT services, revenue will boost for Jio • Optical Fibre based technology is way too efficient in operation. • With investment as huge as Rs. 1 lakh crore in the last 9 months, it can capitalise it on a huge level. • Jio Mart, DTH, Enterprise solutions coupled with Cloud services will only help it grow. ARENAS
- 19. 1. Kanika Maheshwari- "Training and Development- Study on Reliance Jio", www. sgsrjournals.co.in 2. "SWOT Analysis", www.managementstudyguide.com 3. Reliance Jio SWOT Analysis, Competitors & USP, www.mbaskool.com 4. DWAPP, 14 April 2018, "Jio Swot Analysis: Detailed report for professionals and students", https:// digitalwale.com/jio-swot-analysis/ 5. Yash Vardhan Lodhia, 10 Jan 2017, "Reliance Jio Infocomm Ltd.", https: //www.slideshare.net 6. Greg Farrell, Matt Robinson and Bhuma Shrivastava, 23 April 2018, "Is Jio Really Profitable? Audit To Answer Doubts And Controversies", www.ndtv.com 7. Tanya Daga et. al., "Effect of Reliance Jio on Digital India", 8. Pete Bell, 10 Aug 2017, "The Jio Effect: How the Newcomer Made an Impact in India", https:// blog. telegeography. com 9. Mansi Taneja, 7 Sep 2018, "Reliance Jio impact: 15,000 people lost jobs, just 3 companies left in 2 years", www.zeebiz.com 10. Jain, Upasana, 12 September 2016. "Idea agrees to give Reliance Jio interconnection points" Appendix
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