Biz and Bytes (Vol. 8.

Issue: 1, 2017)
E-ISSN: 0976 0458, Print ISSN: 2320 897X

Reliance Jio (A pack of services): Impact on Indian telecom market

Dr. Pankaj Sharma Dr. Tapen Gupta

Associate Prof., Associate Prof.
Guru Nanak Institute of Management, Guru Nanak Institute of Management
Mullana, Mullana

Abstract
Home to the world's second largest population of 1.3 billion, India is a young nation with 63% of
its population under the age of 35 years. It has a fast growing digital audience with 800 million
mobile connections and over 200 million internet users. The internet is like a bloodin the vein of
information driven economy, apart from impacting business and economy it has entered into the
life of common [Link] the major breakthrough in data carrier services comes with the
launch of 4G (LTE) by different telecom companies. This paper is an attempt to analysis the
impact of various JIO services i.e. jio money, 4G data services, Wifi hotspots etc. whereas other
major player in Indian market like Airtel , Vodafone, Idea etc. are offering services in different
areas comes under direct policy redirection and reformation due to Jio services.
Keywords: Jio, LTE, Telecom, Indian Economy, data and voice processing services

Introduction
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 2017 and to maintain high growth rate over the next few years as
people switch to smartphones and gradually upgrade to 4G.
Market Size
Driven by strong adoption of data consumption on handheld devices, the total mobile services
market revenue in India is expected to touch US$ 37 billion in 2017, registering a Compound
Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according to research firm
IDC.

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India is expected to have over 180 million smartphones by 2019, contributing around 13.5 per
cent to the global smartphone market, based on rising affordability and better availability of data
services among other factors.&
According to a report by leading research firm Market Research Store, the Indian
telecommunication services market will likely grow by 10.3 per cent year-on-year to reach US$
103.9 billion by 2020.
According to the Ericsson Mobility Report India, smartphone subscriptions in India is expected
to increase four-fold to 810 million users by 2021, while the total smartphone traffic is expected
to grow seventeen-fold to 4.2 Exabytes (EB) per month by 2021.
According to a study by GSMA, smartphones are expected to account for two out of every three
mobile connections globally by 2020 making India the fourth largest smartphone market. Total
number of Fourth-Generation (4G) enabled smartphone shipments in India stood at 13.9 million
units in the quarter ending December 2015, which was more than 50 per cent of total shipments,
thereby surpassing number of Third-Generation (3G) enabled smartphone shipments for the first
time.^ Broadband services user-base in India is expected to grow to 250 million connections by
2017.
Investment
With daily increasing subscriber base, there have been a lot of investments and developments in
the sector. The industry has attracted FDI worth US$ 18.38 billion during the period April 2000
to March 2016, according to the data released by Department of Industrial Policy and Promotion
(DIPP).

Some of the major developments in the recent past are:

LeEco, a Chinese technology company, has entered into a partnership with Compal
Technologies and invested US$ 7 million to set up manufacturing facility at Greater Noida in
order to start manufacturing Le2 smartphones in India.
Chinese telecom gear maker Huawei has set up its largest global service centre (GSC) at
Bengaluru in India, with an initial investment of Rs 136 crore (US$ 20.28 million), which will
extend its support to Huawei's domestic and international telecom carrier customers in about 30
markets across Asia, Middle East and Africa.
Chinese smartphone maker Gionee, which currently assembles smartphones in partnerships
with contract manufacturers Foxconn and Dixon, plans to invest Rs 500 crore (US$ 74.56
million) to set up a manufacturing facility in India.
Singapore Telecommunications Limited (Singtel), the major shareholder in BhartiAirtel,
announced that it has signed an agreement with its majority owner Temasek Holdings Private
Limited to purchase a 7.39 per cent stake in Bharti Telecom Limited, the parent company of
BhartiAirtel Limited, in a deal worth US$ 659.51 million.
Axiata Digital, a subsidiary of Malaysia's largest telecom firm Axiata Group Berhad, has made
its entry into Indian e-commerce market by investing Rs 100 crores (US$ 14.91 million) in
Bengaluru-based StoreKing.
Chinese smartphone manufacturer OnePlus has partnered with Foxconn to start manufacturing
its products in India as part of its plan to have 90 per cent of the devices sold in India to be locally

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manufactured by the end of 2017.

Government of India to make a windfall gain from sale of spectrum in 2016-17 and achieve its
fiscal deficit target of 3.5 per cent of Gross Domestic Product (GDP) for the year.
Vodacom SA, a subsidiary of Vodafone Plc, has entered into an agreement with Tata
Communications Ltd to buy the fixed-line assets of TataComm's South African telecom
subsidiary Neotel Pty Ltd.
Reliance Communications Ltd, India's fourth largest mobile services provider, has agreed to
acquire SistemaShyamTeleServices Ltd (SSTL), the local unit of Russian company Sistema
JSFC, in a deal valued at Rs 4,500 crore (US$ 671.01 million), which includes payments to the
government for spectrum allotted to Sistema.
American Tower Corporation, a New York Stock Exchange-listed mobile infrastructure firm,
has acquired 51 per cent stake in telecom tower company Viom Networks in a deal worth Rs
7,635 crore (US$ 1.13 billion).
Swedish telecom equipment maker Ericsson has announced the introduction of a new radio
system in the Indian market, which will provide the necessary infrastructure required by mobile
companies in order to provide Fifth-Generation (5G) services in future.
Government Initiatives
* The government has fast-tracked reforms in the telecom sector and continues to be proactive
in providing room for growth for telecom companies. Some of the other major initiatives
taken by the government are as follows:
* The Ministry of Communications & Information Technology has launched Twitter Sewa, an
online communications platform for registration and resolution of user complaints in the
telecommunications and postal sectors.
* The Telecom Regulatory Authority of India (TRAI) has released a consultation paper which
aims to offer consumers free Internet services within the net neutrality framework and has
proposed three models for free data delivery to customers without violating the regulations.
* The Government of India has liberalised the payment terms for spectrum auctions by
allowing two options of payments to telecom companies for acquiring the right to use
spectrum, which include upfront payment and payment in instalments.
* The Department of Telecommunications (DoT) has amended the Unified Licence for telecom
operations which will allow sharing of active telecom infrastructure like antenna, feeder
cable and transmission systems between operators, thereby lowering the costs of operations
and leading to faster rollout of networks.
* The Telecom Regulatory Authority of India (TRAI) has recommended a Public-Private
Partnership (PPP) model for BharatNet, the central government's ambitious project to set up a
broadband network in rural India, and has also envisaged central and state governments to
become the main clients in this project.
* The Ministry of Skill Development and Entrepreneurship (MSDE) signed a Memorandum of
Understanding (MoU) with Department of Telecommunication (DoT) to develop and
implement National Action Plan for Skill Development in Telecom Sector, with an objective
of fulfilling skilled manpower requirement and providing employment and entrepreneurship

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opportunities in the sector.

* The Telecom Regulatory Authority of India (TRAI) has directed the telecom companies or
mobile operators to compensate the consumers in the event of dropped calls with a view to
reduce the increasing number of dropped calls.
Future Trends
India will emerge as a leading player in the virtual world by having 700 million internet users of
the 4.7 billion global users by 2025, as per a Microsoft report. With the government's favourable
regulation policies and 4G services hitting the market, the Indian telecommunication sector is
expected to witness fast growth in the next few years.
The Telecom Market Segments
Mobile (wireless):Comprises establishments operating and maintainingswitching and
transmission facilities to provide directcommunications via airwaves
Fixed-line (wireline):Consists of companies that operate and maintain switchingand
transmission facilities to provide direct communicationsthrough landlines, microwave or a
combination of landlinesand satellite link-up
Internet Services:Includes Internet Service Providers (ISPs) that offerbroadband internet
connections through consumer andcorporate channels

Market Share In Terms Of Total Subscribers (Fy16)

Wireless Landline Broadband

Company % Share Company % Share Company % Share
BhartiAirtel 24.31% BSNL 58.52% Bharti 25.69%
Vodafone 19.15% MTNL 14.52% Vodafone 18.54%
Idea 16.94% Bharti 13.89% Idea 15.31%
Reliance 9.91% Tata 6.83% BSNL 13.59%
Aircel 8.43% Reliance 4.64% Reliance 10.40%
BSNL 8.35% Quadrant 1.00% Others 16.48%
Tata 5.81% Vodafone 0.36%
Telewings 5.07% Sistema 0.23%
Sistema 0.74%
Videocon 0.64%
MTNL 0.34%
Quadrant 0.31%

About Reliance Jio

Reliance JioInfocomm Limited (RJIL) previously known as Infotel Broadband, is a broadband
service provider which gained 4G licenses for operating across India. Sandip Das, former CEO
of Maxis Malaysia, is the current group president of Reliance JioInfocomm.
It is doing business as Jio, is a LTE mobile network operator in India. It is a wholly owned

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subsidiary of Reliance Industries headquartered in Mumbai, that provides wireless 4G LTE

service network (without 2G/3G based services) and is the only 100% VoLTE (Voice over LTE)
operator in the country, with coverage across all 22 telecom circles in India.
The company launched its 4G broadband services throughout India in the first quarter of 2016-
2017 financial year. The MukeshAmbani-led Reliance Industries Limited subsidiary recently
announced the Jio Happy New Year Offer for all existing and new users that "extends free voice,
data, video call, SMS and Jio apps till March 31, 2017." The Happy New Year Offer basically is
an extension to Jio's Welcome Offer that ended on December 3, 2016.
The company has a network of more than 250,000 km of fiber optic cables in the country, over
which it will be partnering with local cable operators to get broader connectivity for its
broadband services. With its multi-service operator (MSO) licence, Jio will also serve as a TV
channel distributor and will offer television-on-demand on its network.
Services Bokeh by JIO
Affordable Devices:Jio has worked with all the leading device manufacturers of the world to
ensure availability of 4G LTE smartphones across all price points – from ultra-premium models
on one hand, to entry level models on the other.
Digital Communication: The application Jio4GVoice brings the 4G communication suite to all
smartphones. With its RCS (Rich Communication Services) features like Enriched calling, Chat,
File share and Unified Messaging, it redefines the calling and messaging experience. It also
enables Jio's cutting edge voice and video call service on non-VoLTE smartphones.
Digital Currency:Jio envisions a new India which will use digital currency instead of paper
money for a more secure and convenient way to transact. Jio Money, Jio's digital currency and
digital payments business, will play a crucial role in this by offering a platform for ubiquitous,
affordable and secure digital payments.
Jio Drive: Micro and small businesses will soon have access to cutting-edge cloud storage
technologies which were once affordable to big companies only, giving them a new edge to
compete on a global landscape. Jio Drive is an application that brings powerful cloud capabilities
to every smartphone. Using Jio Drive, anyone can store, sync and share any content between
their own devices and also with their friends.
Digital Education: Teachers and students from far flung areas can connect with each other,
crowd-source knowledge and adapt new age learning techniques and thus lift the level of
education to a completely different plane.
Digital Healthcare: Expert medical advice would be available anytime, anywhere - with
medical practitioners able to grow their practice without constraint, and provide quality of life to
the crores that make up our country.
Digital Entertainment and social connectivity:Jio Chat is a powerful communication
application that integrates chat, voice, video calling, conferencing, file sharing, photo sharing
and much more. Jio Play enables users to watch HD TV anytime, anywhere on any device, from
hundreds of channels, across categories and languages. Jio Beats is a premier digital music
streaming service that gives instant access to millions of songs and curated playlists. JioMags
and Jio News provide access to the most popular collection of magazines and news from leading
publishing houses across multiple languages.

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Digital Entrepreneurship:Jio is building is a powerful platform on which a range of rich digital

products and services can be enabled - digital currency, digital commerce, digital education,
digital healthcare, e-governance, Smart Cities, M2M and the Internet of Things. It does not
matter whether these services are created by Jio itself, its ecosystem partners or anyone globally.
Reliance is committed to the principles of Net Neutrality.
Impact of Reliance Jio on Market
Increase InInternet Speed
Reliance Jio beat Airtel, Vodafone and others, becoming the fastest among all 4G service
providers in India in December 2016, according to data released by the Telecom Regulatory
Authority of India. TRAI's MySpeed portal had previously in October revealed that Reliance Jio
was the slowest 4G service provider in India.

The graph for average upload speed shows, however, shows Telenor as number one with
2.8Mbps while Jio follows closely at second position with 2.6Mbps.
Jio Cause Growth InTelecom Subscriber Base

India's telephone subscriber base expanded at a CAGR of19.96 per cent, reaching 1058.86
million during FY07–16Tele-density (defined as the number of telephoneconnections for every
hundred individuals) in India,increased from 17.9 in FY07 to 83.36 in FY16In 2016, total
telephone subscription stood at1058.86 million, while tele-density was at 83.36 percent
Jio Contribute Wireless SegmentTo Dominates The Market

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In 2016, India's telephone subscriber base reached1058.86 million In 2016, the wireless segment
(97.62 per cent of totaltelephone subscriptions) dominated the market, with thewireline segment
accounting for an overall share of 2.4 percentUrban regions accounted for 57.29 per cent share in
theoverall telecom subscriptions in the country, while ruralareas accounted for the remaining
share.
Robust Growth In Wireless Subscriptions

During FY07-16, wireless subscriptions in the country increased at a CAGR of 22.94 per cent,
with the number of subscribers reaching to 1,058.85 million. In FY16, urban wireless
teledensity stood at 148.73 while rural wireless teledensity stood at 50.88
Grows Over The Years InWireless Teledensity

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The mobile segment's teledensity surged 6 times from 14.6per cent in FY07 to 81.38 per cent, in
FY16GSM services continue to dominate the wireless marketwith a 95.73 per cent share.

Number Of Internet Subscribers Increasing At A Fast Pace

The number of Internet subscribers in the country increasedat a CAGR of 44.56 per cent, with the
number reaching342.65 million in 2016 from 8.6 million in 2006By December 2015, the
number of internet users wasanticipated to reach 402 million. Whichhas already reached to 462
million by the end of 2016 with the increasingnumber of subscribers coming online especially
throughmobile devices.
Emergence Of Tower Industry
A surge in the subscriber base has necessitated network expansion covering a wider area, thereby
creating a need forsignificant investment in telecom infrastructure. To curb costs and focus on
core operations, telecom companies have been segregating their tower assets into
separatecompanies. For example: Reliance Communications has decided to finalise a deal to sell
its stake in Reliance Infratel. Thevalue of the deal is around USD3.68 billionCreating separate

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tower companies has helped telecom companies lower operating cost and improve capital
structure; thishas also provided an additional revenue streamInspired by the success seen by
Indian players in towers business, most of the operators around the world are replicatingthe
model
Mobile Number Portability

Mobile Number Portability (MNP) in India was introduced inNovember 2010MNP allows
subscribers to change their mobile serviceprovider while retaining their old mobile [Link]
requests in India increased to 209.13 million at the end of 2016.

Change in Service and Marketing Strategies

v Idea Cellular launched new campaign “Get idea and dance
v Airtel launched new ad campaign “AirtelmyPlan Family”
v Airtel India launched a mobile app “Wynk Movies”, it is a library that includes videos and
movies
v Vodafone launched “Choose Your Number” facility where prepaid and post paid customers
get numbers of their own choice
v To compete with Jio 4G services, Vodafone launched 'Double Data' scheme forits prepaid
customers where users will get double data pack at the same [Link] such as
Vodafone, Airtel have already launched 4G technology atvery competitive prices.
Conclusion
Reliance Jio is creating the most extensive and future-proof network in India, and perhaps, in the
world. It will provide next generation legacy-free digital services over an end-to-end all-IP
network, which can be seamlessly upgraded even to 5G and beyond. In addition to the existing
pan India 2300 MHz spectrum and 1800 MHz in 14 circles, Jio invested over Rs 10,000 crore
during this year's auction to acquire 800 MHz spectrum in 10 circles and 1800 MHz spectrum in 6
circles. This brings the cumulative investment in spectrum assets to nearly Rs 34,000 crores. Jio
now has the largest footprint of liberalized spectrum in the country, acquired in an extremely cost
effective manner.
Reliance Jio has laid more than 2.5 lakh kilometres of fibre-optic cables, covering 18,000 cities
and over one lakh villages, with the aim of covering 100% of the nation's population by 2018. It
has an initial end-to-end capacity to serve in excess of 100 million wireless broadband and 20

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million Fibre-to-Home customers. Reliance Jio has also built nearly half-a-million square feet of
cloud data centres and a multi-Terabit capacity international network.
The current market trend indicate that the reliance will going to hamper the other companies to
greater extent.

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[9] Live Mint and Wall Street Journal, 9th December 2016
[10] [Link]fi[Link] Nov 19, 2016

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