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The Telecom Space on India - Reliance JIO

Major Pricing Strategies of Jio:

Three general pricing strategy:
1. Value based pricing.
2. Cost based pricing.
3. Competitor based pricing.
New product pricing strategy:
1. Market Skimming Pricing
2. Market Penetration Pricing.

Customer Value- Based Pricing

The company first assesses customer needs and value perceptions. It then sets its target price
based on customer perceptions of value. The targeted value and price drive decisions about what
costs can be incurred and the resulting product design. As a result, pricing begins with analysing
consumer needs and value perceptions, and the price is set to match perceived value.
When customers buy a product, they exchange something of value (the price) to get something of
value (the benefits of having or using the product). Effective customer-oriented pricing involves
understanding how much value consumers place on the benefits they receive from the product and
setting a price that captures that value.
Customer value–based pricing uses buyers’ perceptions of value as the key to pricing. Value-based
pricing means that the marketer cannot design a product and marketing program and then set the
price. Price is considered along with all other marketing mix variables before the marketing
program is set.
For Example:
Jio has been one such contender who owes their huge success to their pricing strategies and with
this pricing they understand the customer well, it shows the customer that what value addition
they are getting in return.
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 Penetration Pricing or Pricing to Gain Market Share

A few companies adopt these strategies in order to enter the market and to gain market share.
Some companies either provide a few services for free or they keep a low price for their products
for a limited period that is for a few months. This strategy is used by the companies only in order to
set up their customer base in a particular market.

Firstly: using this strategy

Reliance Jio gave away free connections to consumers in order to grab or acquire maximum
consumers in a given market. This has forced the market competitors to slash down their prices,
because in failing to do so, they were sure to lose their market share. Furthermore, if the
competitor is a smaller player in the market, they would eventually be pushed out of the market
due to the losses incurred from cutting down prices. This moves by Jio changed the market into an
oligopolistic competition, leaving only 4 players in the market pushed out of the market due to the
losses incurred from cutting down prices. This moves by Jio changed the market into an oligopolistic
competition.
In the similar manner by keeping their product cost low as their introductory offer, help themselves
in the market and creating a consumer base. Similarly, when the companies want to promote a
premier product or service, they do raise the prices of the products and services for that particular
time.

PRICING ADJUSTMENT STRATEGIES

1. Discount and Allowance Pricing.
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2. Promotional Pricing.
3. Psychological Pricing
4. Segmented Pricing
5. Geographical Pricing
6. Dynamic Pricing
7. International Pricing

Jio Applied, some of these Price Adjustment Strategy, as mentioned below:

 Discount and Allowance Pricing
In this price adjustment strategy is rather common. Most companies adjust their basic price to
reward customers for certain responses, such as the early payment of bills, volume purchases and
off-season buying.
Discount and allowance pricing can take many forms: Discounts can be granted as a cash discount,
Offers etc.
 Promotional Pricing
Promotion pricing calls for temporarily pricing products below the list price, and sometimes even
below cost, to increase short-run sales. Thus, companies try to create buying excitement and
urgency. Promotional pricing could take the form of discounts from normal prices to increase sales
and reduce inventories. Also, special-event pricing in certain seasons to draw more customers could
be used.
 Psychological Pricing
Another one of the price adjustment strategies is psychological pricing. It refers to pricing that
considers the psychology of prices, not simply the economics. Indeed, the price says something
about the product.

After Maturity
1. Decoy Pricing.
Jio uses the decoy pricing strategy, which is known to influence the choices made by a consumer.
Since India’s major population is from the middle class and this segment would never turn down a
reasonable deal, Jio understood this advantage and ran with it; successfully introducing multiple
packs offering similar services but at different price margins. Subsequently, indirectly persuading
the consumer to pick the scheme that is valid for the maximum number of days with a signicant
price difference.
Finally; Jio employs a trick that is similar to the markup tactics used in discounts. Its famous ‘Dhan
Dhana Dhan’ offer provided a service of 84 days at ₹399, but later changed it to 70 days at ₹399,
therefore allowing Jio to earn more revenue, with the price being unchanged.
Secondly:
‘Jio uses this pricing strategy, which is known to influence the choices made by a consumer. Since
India's major population is from the middle class and this segment would never turn down a
reasonable deal, Jio understood this advantage and ran with it; successfully introducing multiple
packs offering similar services but at different price margins. Subsequently, indirectly persuading
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the consumer to pick the scheme that is valid for the maximum number of days with a significant
price difference. service of 84 days at ₹399, but later changed it to 70.’
Finally:
Jio employs a trick that is similar to the mark-up tactics used in discounts. Its famous 'Dhan Dhana
Dhan' offer pro service of 84 days at 399, but later changed it to 70 days at 399, therefore allowing
Jio to earn more revenue, with the price being unchanged.
Tata's Nano was also launched at a market penetration price, but failed miserably since the market
sees ownership of a car as a status symbol and when it was offered at that price
consumers perceived it as a cheap product. Pricing should be decided based on the product and the
nature of the market. Jio witnessed huge success with its consumers because it understood the
market well and employed a pricing strategy that works for its product.

Important External and Internal Factors affecting a firm’s Pricing Decisions:

Internal factors that influence pricing decisions include the company’s overall marketing strategy,
objectives, and marketing mix, as well as organizational considerations. Price is only one element of
the company’s broader marketing strategy. If the company has selected its target market and
positioning carefully, then its marketing mix strategy, including price, will be fairly straightforward.
Common pricing objectives might include customer retention and building profitable customer
relationships, preventing competition, supporting resellers and gaining their support, or avoiding
government intervention. Price decisions must be coordinated with product design, distribution,
and promotion decisions to form a consistent and effective marketing program. Finally, to
coordinate pricing goals and decisions, management must decide who within the organization is
responsible for setting the price.
External Pricing Factor considerations include the nature of the market and demand and
environmental factors such as the economy, reseller needs, and government actions. Ultimately,
the customer decides whether the company has set the right price. The customer weighs the price
against the perceived values of using the product—if the price exceeds the sum of the values,
consumers will not buy. So, the company must understand such concepts as demand curves (the
price–demand relationship) and price elasticity (consumer sensitivity to prices).
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Economic conditions can have a major impact on pricing decisions. The Great Recession caused
consumers to rethink the price-value equation, and consumers have continued their thriftier ways
well beyond economic recovery. Marketers have responded by increasing their emphasis on value-
for-the-money pricing strategies. No matter what the economic times, however, consumers do not
buy based on prices alone. Thus, no matter what price they charge—low or high—companies need
to offer superior value for the money.

PRODUCT MIX PRICING STRATEGIES

The product mix constitutes not only a single product line but all the products within an
organization. In product mix pricing, the company looks for a set of price that maximizes it’s profits
on the total product mix. For example, companies like Volkswagen or General motors have
multiple product lines and many strategic business units in their organization structure. Each
product within the structure forms a part of the product mix.
Thus, when we have to decide the product mix pricing, we have to decide the effect on the overall
pricing and the ripple it will create on multiple product lines.
In general, there are 5 types of product mix pricing used by any organization to take care of their
product mix and product lines.
1) Product line pricing: Product line pricing is used when the prices within the product line is
kept variant so that the customer purchases one or the other product within the product
line.
2) Optional product pricing: Many a times, an organization charges extra for an added feature
that it provides and the prices are kept on the basis of the feature which is being provided.
This is called optional product pricing.
3) Captive product pricing: Setting a price for the products that must be used along with the
main product I called captive product pricing. Examples include razor blade cartridges,
printer cartridges, etc.
4) By Product pricing: Setting a price for the by-products to help offset the costs of disposing of
them and help make the main product’s price more competitive. Companies like British
Petroleum and Shell deal in a lot of Crude Oil and these companies also provide the finished
goods like oil and petrol. So the pricing of the raw material as well as its by product is kept
different. Generally, it is kept on the basis of cost of production of the by product.
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5) Product bundling pricing: This involves combining several products and offering the bundle
at a lower price. This is a kind of product mix pricing which is used to push more product in
the market at a lower price point. The margins are lesser but the cash movement is much
faster, thereby giving liquidity to the brand.
Pricing Strategy of Reliance Jio:
 To promote the idea of Digital India and, to take the internet services to every part of the
nation, Reliance Jio provided free services to its users.
 The company gave SIMs free of cost to Individuals against their phone number and Aadhaar
card number.
 Reliance Jio targeted users with smartphones who want good services and high-speed
internet at a low cost.
 It was able to sell approximately 14 lakh SIM cards to the individuals within the first few
days of the launch.
 After the roll-out of free services, Reliance Jio adopted a flexible pricing strategy and
announced a reasonable rate for all its products and services.
 Jio kept Voice calling services free for its users who mainly had to pay for the data usage.
 Reliance Jio Phones were also reasonably priced with a security deposit of Rs. 1500 and,
user can withdraw the amount following the usage of three years.
 Following this, Reliance Jio also started offering LYF devices at prices as low as Rs. 2999 and
additionally offered JioFi at an affordable price of Rs 1999.

PRICE CHANGES OF JIO

Initiation Price Changes:
Companies are bound to face market situations where they are required to initiate price changes. It
means, either they are to cut the prices or increase the present prices to survive, maintain status
quo or further growth. Initiating price changes involves two possibilities of price cuts and price
increases.
Initiating Price Cuts:
There are many circumstances where a firm is to resort to price cuts.
There are genuine reasons for cutting prices:
First may be existence of excess capacity. In such situation the firm is badly in need of additional
business and cannot generate it through increased sales efforts, product improvement or even
price rise.
It may resort to aggressive pricing, but in initiating price out, the company may trigger a price war.
Second reason for initiating price cut is a drive to dominate the market through lower costs.
Here, either the company starts with lower costs than its competitors or it initiates price cuts in the
hope of gaining the market share and lower costs to price cutting policy involves the following
possible traps:
1. Low-quality trap:
Consumers will assume that quality is low.
2. Fragile-market share trap:
A low price buys market share but not market loyalty. The same customers will shift to any lower-
priced firm that comes along.
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3. Shallow-pockets trap:
The higher priced competitors may cut their prices and may have longer staying power because of
deeper cash resources.
Initiating Price Increases:
Price increase is a source of maximising the profit or maintaining it if done carefully. Say a company
earns 3 percent profit on sales, and one percent price increase will increase profits by 33 per cent if
sales volume is not affected.
The factors leading to price increase can be:
1. Increase in cost inflation. That is rising costs unmatched by productivity gains squeeze profit
margins and lead companies to regular rounds of price increases. Companies often raise their by
more than the cost hike, in anticipation of further inflation or government price controls, in a
practice called anticipatory pricing.
2. Over demand can be another cause that leads to price increase. When the company cannot
supply all of its customers, it can raise its prices, ration or cut supplies to customers or both.
The price can be increased by at least four ways:
1. Delayed quotation pricing:
Here, the company does not set final price until product is finished or delivered. This pricing is
prevalent in industries with long production lead times like construction and heavy industrial
equipment.
2. Unbundling:
The company under this plan maintains its price but removes or prices separately one or more
elements that were part of the former offer, such as free delivery or installation.
Automobile companies, sometimes, add antilock brakes and passenger-side air-bags as
supplementary extras to their whiles.
3. Escalator clauses:
Under this, the company asks the customer to pay today’s price and all or part of any inflation
increase that takes place before delivery. This hike based on specified price index. These escalation
clauses are quite common in construction line whether it is a house or industrial project or air-craft
and ship building.
4. Reduction of discounts:
The company asks the sales force to offer its normal cash and quantity discounts at reduced rate.
To gain four such attempts, the company must avoid looking like a price gouger. Companies also
think of who will bear the brunt of the increased prices.
It is so because, customer memories are long, and they can turn against the company which is
perceived as price gauger.
Reactions to Price Changes:
Naturally any price change provokes response or reaction from customers, competitors,
distributors and suppliers and even the government. Here, we shall touch only the reactions of
consumers and competitors.
Customer Reactions:
Consumers are more interested in knowing the cause or causes of price change.
A price cut can be interpreted in several ways:
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1. The item or product is about to be replaced by a new model.

2. The item is faulty and it is not selling well.
3. The firm’s financial position is badly affected.
4. The price will come down further.
5. The quality has been reduced.
A price hike may have some positive meanings:
1. The items is ‘hot’
2. It has a high value because of quality.
Competitor Reactions:
Competitors are most likely to react when the number of firms is few, the product is homogeneous,
and buyers are highly informed. Competitor reactions can be a special problem when they have a
strong value proposition. The price hike them to take steps based on objectives of such price hike
where they will resort to advertising and product improving efforts.
In case of price cuts, they have different interpretations:
1. That the company’s trying to steal the market
2. That the company is doing poorly and trying to boost its sales
3. That company wants the whole industry to reduce prices to stimulate total demand.

Jio’s Onslaught of the Indian Telecommunication Market

On 5th September, 2016 Reliance Jio Infocomm Limited(RJIL) (hereinafter referred as ‘Jio’) released
its free data and voice scheme ‘Jio welcome offer’ which was further extended till December. Next,
it introduced ‘Happy new year offer’ which extended the previous plan till 31 March, 2017. Even in
2018 and now in 2020, it is charging nominal rates to provide high speed data and voice which
instigated the Indian digital revolution. For the first time in India, humongous investments were
done and a new entrant penetrated the telecommunication market which was held tightly by few
incumbents. They successfully penetrated the market within a year. However, their zero pricing
strategy was declared predatory and anti-competitive. They were on thin ice, where a single
characterization of dominance demarcated them from being penalized for anti-competitive
behavior. This portrays the beginning of a new era for Indian competition law, where a
revolutionary pricing strategy was applied which provided the consumers utopian incentives. The
spotlight of our attention should be focused on a particular phase ‘penetration’ and its relation and
position with Indian Competition Law. It remains a gray area and has demonstrated potential to
renovate the competition law scenario in India.

Controversial Pro-Penetration Stand of TRAI

An interesting perspective can be extracted from Telecom Regulatory Authority of India’s (TRAI’s)
ruling concerning the predatory price allegation on Jio. Jio made its mark on the telecommunication
market when it started providing free data and voice services in 2016. Consequently, it generated a
gargantuan shift in the consumer base. Even when they started charging for their services, it was
still a fraction of what its rivals (Airtel, Vodafone and Idea) were charging. In 2018, TRAI amended
the predatory pricing rule which caused a disruption in the market, especially for the rivals of Jio. It
permitted Jio to continue with its low pricing but barred its rivals to reduce their current prices to
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tackle competition. It reasoned that the rivals’ existing position would cause abuse, whereas, Jio
being a new entrant was inept to abuse (predation). It also scrapped traffic volume as a parameter
for establishing market power, which gave absolute immunity to Jio, as it was experiencing huge
growth in terms of traffic volume. However, these changes were nullified by the sectoral appellate
tribunal, when the rivals challenged them on the merits of intent and capability of Jio. The sectoral
appellate tribunal observed that TRAI’s changes offered ‘artificial protection’ to the entrant and as a
counter-measure allowed the rivals to offer cheap rates to compete with the low tariffs of Jio. Two
polar views can be observed here, while TRAI directly allowed penetrative pricing as it granted the
relaxations to Jio due to its nascent position, the appellate tribunal rejected the merit of market
penetration through low pricing, thereby rejecting the theory of penetrative pricing by ignoring the
entrant’s position and denying it the benefit of newcomer’s promotional pricing opportunity.

Penetrative Pricing: The Search for Clarity and Dawn of its Undeniable Existence
Unlike predatory pricing, penetrative pricing is not much popular in the arena of competition law.
Competition Act, 2002(hereinafter the ‘Act’) which regulates competition in India is silent upon this
matter to the extent where there is no explicit mention about it in the entire Act. Certain topics
regarding penetrative pricing are discussed below in an attempt to clear the fog:
1. Definition- Penetrative Pricing is a common marketing and pricing strategy. Seldom has a
clear and concise definition been provided in the cases or the regulating bodies which
encompasses majority of the aspects of penetrative pricing with respect to competition law.
A hypothetical definition is being provided here:
‘Penetrative pricing can be defined as lowering (usually) of prices of items or services by an
non-dominant entrant entity to establish, promote and highlight its identity and existence in
the market, where multiple incumbent players already exist , with the anticipation,
preparation and objective to expeditiously attract the consumers’ attention at the expense
of suffering initial losses which may or may not be recouped once their identity is
established through this short term incentive-based strategy.’

The term penetrative price was predominantly used in the National Stock Exchange of India
Ltd. & DotEx International Ltd. v. MCX Stock Exchange (hereinafter ‘NSE Case’), and then in
Fast Track Call Cab Pvt. Ltd & Meeru Travel Solutions Pvt. Ltd. Vs. ANI Technologies Pvt.
Case(hereinafter ‘cab case’). However, the former was rejected on grounds of anti-
competitiveness, abuse of dominance and intention of predation, while in the later they
didn’t venture into the legitimacy of the pricing strategy i.e., the concept of penetrative
pricing, but approved its logical and circumstantial foundation making it critical to note that
they cited non-dominance and not pro-competitiveness of penetrative pricing for letting it
continue its practice which does not confirm their view on this strategy.
It was first successfully applied and accepted by Competition Commission of India (CCI) in
Bharti Airtel Ltd. v. Reliance Jio Industries Ltd.(hereinafter ‘Jio case’). It was also the first
instance where they appreciated its strategic value and provided certain criterions,
however, these were included in the obiter dicta portion and not in the ratio decidendi one,
which illustrates that it is yet not prepared to formally accept it as a pro-competitive and
major strategic development in the Indian competition law sector. This makes it ambiguous
in nature as the opinion of the commission remains unclear as it did not set formal
guidelines, keeping it open to future interpretations.
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2. Nature- The very essence of penetration is to increase market diversity and offer better
choices to the consumers which can be termed as pro-competitive in nature. The underlying
principle of penetrative pricing was implied by the CCI in the cab case as:

‘A new entrant armed with new idea, superior technology or a superior product or
technological solution that challenges the status quo in a market and shifts a large consumer
base in its favour would cannot always be as held dominant’.
This establishes the pro-competitive nature of penetrative pricing which can be wrongly
portrayed as predatory price with mala fide intention aimed at anti-competitiveness.
A unique feature of the Jio case is its initial zero pricing strategy. It was nefariously used in
the NSE case, but NSE being the dominant entity was not considered under the ambit of
penetrative price but was rather monopolistic in nature. However, in the Jio case it was
successfully accepted by the commission on the grounds that Jio was an entrant.
Nonetheless, certain pertinent questions remain debatable as to the time period of this
strategy, its intent, its position as to the pricing factor and its implication in causing
temporary disruption of the status quo. In Jio case, zero pricing drove the entire focus on
the quality which the consumers had the free choice to test and compare. While zero prices
tend to prevent firms from competing on price, they invite competition on quality. Entrants
can produce greater quality at zero prices and suffer losses temporarily, if they are superior
they will gain market share in the future and recoup the losses. It debunks the theory which
tags zero pricing as an anti-competitive dead end in competition law.

3. Criteria- The CCI hinted at certain criterions as observed in the Jio case. They include non-
dominant nature of the offering company, intent of incentivization, absence of competition
reducing approach and its short time span. The Commission expressed its opinion as
follows:
“providing free services cannot by itself raise competition concerns unless the same is
offered by a dominant enterprise and shown to be tainted with an anti-competitive
objective of excluding competition/ competitors, which does not seem to be the case in the
instant matter as the relevant market is characterised by the presence of entrenched
players with sustained business presence and financial strength. In a competitive market
scenario, where there are already big players operating in the market, it would not be
anticompetitive for an entrant to incentivise customers towards its own services by giving
attractive offers and schemes. Such short-term business strategy of an entrant to penetrate
the market and establish its identity cannot be considered to be anticompetitive in nature
and as such cannot be a subject matter of investigation under the Act.”
It differs from the cab case from a fundamental viewpoint. In these cases, they came to
notice mainly due to their convenience and relatively low pricing, whereas, the opposite
happened for Jio. Its zero pricing garnered public attention where quality took the
secondary pedestal, however, upon trial the consumers found its quality to be peerless in
the whole country. These two factors spearheaded Jio’s telecommunication crusade.

4. Predation: Dissecting the Infamous Allegation

It is imperative to understand predation in order to establish its relation, effect and
influence on penetration. Predatory price finds its mention in Section 4(2)(a)(ii) of the Act
and is elaborated in the explanation as:
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‘‘predatory price’ means the sale of goods or provision of services, at a. price which is below
the cost, as may be determined by regulations, of production of the goods or provision of
services, with a view to reduce competition or eliminate the competitors.’ Thus the rivals in
the market are unable to compete with the price of the dominant player and will have to
leave the market or endure losses which are terminal in nature. The CCI in Re: Johnson And
Johnson Ltd. held that “the essence of predatory pricing is pricing below one’s cost with a
view to eliminating a rival.”
Predatory pricing is considered as a severe form of dominance. It is considered as an anti-
competitive offence in most nations’ competition regulation principles. Previously Article 82
of the Treaty establishing the European Community(TEU) used to regulate and prohibit it. In
USA, Section 2 of the Clayton Act prohibits predatory pricing. There exists various tests
which predict the predatory nature of a company pricing policy.

Supply Chain and Distribution Network

 Jio is present in all 29 states of India with direct physical presence in more than 18,000
urban and rural towns and over 2,00,000 villages. Jio has built the most sophisticated,
efficient and largest LTE network in the country. Jio already has the largest fiber network in
the country and highest amount of spectrum deployed for LTE services in the industry.
 Reliance has distributed the sim cards through already established Reliance Digital &
Reliance Digital Express store. Even before the launch in 2016, the sims were available in
these stores. The combined presence of these stores are present in over 600 cities of Urban
& Rural India. Thus, their distribution network is already sought out.
 Jio has about half a million activation outlets and close to a million recharge outlets at
launch. This is in addition to the digital channels that Jio has for seamless activation and
recharge facilities for customers. The outlets have real time access to over 1,050 Jio offices
set-up across the country.
 Currently the sim cards are available in local telecom stores as well.
 eKYC customer Verification was introduced to activate SIM cards almost instantly when one
buy them.
 Aadhar based sim activation allowed them to handover active sim card and need not
required moving the documentation around.
 They believe in aggressive distribution strategy. Initially, for those who have wanted to get
their hands on the JIO but couldn’t due to the unavailability or shortage of SIMs, they
introduced telco plans of door-to-door SIM delivery.
Jio launched a portal to allow people to book a Jio SIM card by providing certain basic
information, following which the SIM was delivered to applicant’s address in 5-7 days.
 The sim Card suppliers are present mostly in China or Taiwan such as Rayson Technology
CO. LTD. Even the Indian companies have partnership with companies in China/Taiwan and
often sim manufacturing is sub contracted to them.
 The network has advanced features such as Software Defined Networking (SDN) and
Network Functions Virtualisation (NFV). Jio has over 1,00,000 radiating sites, which is
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significantly more than what any other operator had at its launch and already positions Jio
as one of the largest network operators in the country. Fiber is the critical backbone on
which a telecom service provider is able to provide high end services to consumers.
 RJIL's Singapore subsidiary is also key consortium partner in a multi-terabit capacity
international network, a new state of-the-art 8,100 km cable system, the Bay of Bengal
Gateway (BBG). BBG provides direct connectivity to South East Asia and the Middle East,
then onward to Europe, Africa and Far East Asia through seamless interconnection with
existing cable systems. This strategically important undersea cable landing facility in Chennai
is owned by the RJIL, provides a high-speed, high capacity, low latency route connecting
India to the rest of the world.
 RJIL's total spectrum footprint with this stands at 1,108 MHz (uplink + downlink) across
three spectrum bands namely 800 MHz, 1800 MHz and 2300 MHz band across each of the
22 circles with an average life of over 16 years. All of this spectrum is liberalised and can be
used for rolling out any technology. In addition, RJIL has entered into agreement with
Reliance Communication Limited (RCOM) for sharing of spectrum in the 800 MHz band
across 21 circles.

Value Delivery Network

Jio has changed the nature of mobile services in India (arguably globally too), redefining
benchmarks, setting new milestones, inspiring unprecedented adoption, usage and service metrics
that are better than the best globally, while ushering in a truly converged digital service.
100 million subscribers on-boarded in 170 days
 Powered by innovative biometric driven eKYC
Value creation through abundant data capacity
 India data consumption increased multi-fold with Jio
 India is now the largest mobile data consumer in the world
 Jio mobile data traffic is more than 1 Exabyte (1bn GB) per month
 Average consumption on Jio is 10GB/month/user (Highest in world)
Simplest tariff structure
 One India ~ No roaming charge
 Truly Free voice-Local, STD, Roaming, Off-net
 Only pay for one service (highest demand)-data
 Lowest data rates in the world
 Largest Migration from Free to Paid
STRATEGY AND VISION
Coverage- Jio continues to expand its network with aim of full Indian population coverage and
target of over 95% within the next one year. This coverage will be backed by the largest network of
spectrum, tower and fiber assets, thus providing huge capacity.
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Data- Data consumption per consumer in India is far below the global average. Jio's network is
engineered with abundant capacity to serve every Indian. Jio’s customer base of 100+ million today
on an average already consume 10GB/ month/user. This is highest per capita mobile data
consumption in world.
Quality- Quality of broadband services hitherto in India were below par international standards.
Jio's vision is to offer speed that are multiple times faster than the current average speed offered in
the market, backed by its state-of- the-art future proof all IP network and world-class customer
service quality.
Affordability- Affordability is key to success of the digital revolution. Jio has developed its network
at an extremely efficient cost base coupled with significant operating efficiencies. These efficiencies
are enabling it to offer services at a very competitive cost compared to others. Jio has introduced
One India simplified tariff plans with truly free voice and lowest data rates in the world.

Channel design:
 Analysing customer needs- Find out what target customers wants from the channel so that
each channel member adds value for the customer
 State their marketing channel objectives in terms of targeted levels of customer service.
Company should decide which segments they want to serve and select the best channels
that minimize the total level of intermediaries from company to ultimate consumer.
 Identify its major channel alternatives in terms of the types of intermediaries, the number of
intermediaries, and the responsibilities of each channel member.
 Evaluate each alternative against economic, control and adaptability criteria.

Various level of Channels involved in Jio:

 Distribution level one: Company Jio sales dept Reliance Retail (Like Reliance
digital, Reliance Xpress) Consumer
 Distribution level two: Company Jio sales dept Distributors Retailers
consumer.
o Local grocery shops
o Mobile phones and accessories shops
 Distribution level three: Company Jio Sales dept consumers
o E-commerce sites (Collaboration with E-commerce sites while selling new
smartphones)
o Home delivery
o Roadside Promotional stalls
o Jio retail outlets
Jio sim cards were also promoted by selling along with LYF mobile phones and Jio phones to the
consumers. As the e commerce had grown for the past 5 years, Jio also created a new level of
distribution channel i.e., by collaborating with Flipkart, amazon and sell recharge coupons and sim
cards. Similarly, door step delivery of sim cards were also introduced both post-paid and prepaid
and consumers get their service immediately within days.
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Jio has an exclusive distributorship as distributors focus only on one operator. When a SIM Card or
voucher is sold, the retailer gets a margin of 2.25-6% and the distributor about 2%. Both get
bonuses, or incentives, for bringing in new customers.
Marketing and promotion activities done on overall level like television ads, e commerce sites like
issuing cashback offers for recharge, bank tie ups. These activities are done for all the channel
partners.
Similarly, region level promotion activities are done to improve sales. In Jio outlets the performance
is evaluated based on the number of activations of sim cards. For promoting Jio sims they get tie up
with local mobile shops (Ex: Poorvika, Universal mobile shops).
Channel decisions: After finalising best Channel company should implement and manage the
selected channels. Steps involved in channel management is
o Selecting
o Managing
o Motivating and
o Evaluating the channel members
During festival period Reliance roll out mass promotion activities.
 Exclusive cashback option when mobile phone or other accessories are paid using specific
bank credit or debit card.
 Giving discounts on electronic gadgets along with no cost EMI options
Promotes their sim card and offers 1-month data and voice call for free. This Jio Sim card comes
with various bundle freebies. Jio cinema, magazines, Jio wallet. Consumers pays for recharge
vouchers and gets many values added services for free. This makes different from other
competitors and they are effectively managing their channel decisions.
Retail outlets:
 Local newspaper, hoardings and pamphlets are used to promote their festival offers.
 Roadside stalls are setup in front of colleges, malls and other busy junctions in order to push
sales.
By doing these activities the channel is motivated. They also do promotion in selected circle or
region where their sales are down or where the subscriber base of mobile segment is minimum.
Evaluation is again done post promotional activity measures.
Mergers & Acquisitions by Reliance Jio
Mergers and acquisitions (M&A) in India rose 14.55 per cent to $43.54 billion in value terms in the
first half of 2020, mainly due to Reliance Industries selling stakes in its digital arm Jio platforms.
Deal count plunged by 24.69 per cent year-on-year to 243 transactions. International investors
acquiring a 24.71 per cent stake in Jio Platforms for $ 15.27 billion drove the increase in M&A deal
value in India during the first half of the year.
For the last two years, if there’s one company that is made its intentions loud and clear in the data
and telecom market then it has to be Reliance Jio. While the Mukesh Ambani-led billion-dollar
company has created a stir with its aggressive pricing and offers, on the side lines it has been
acquiring companies or stake in companies with interests in data, entertainment and content. Here
we list out some of the biggest acquisitions Reliance Industries has made keeping in mind its
telecom, including its data and content business:
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 To make its presence felt in the online music streaming business, Saavn was one of the first
and biggest acquisition made by Reliance Jio. On March 23, 2018, Reliance Jio announced
this strategic merger of its digital music service JioMusic with music over-the-top platform
Saavn. Jio acquired a 75-80 % stake in the merged entity. The company said that the
combined entity is valued at over $1 billion with JioMusic’s implied valuation at $670 million
and Saavn at $330 million.
 Soon after the launch of JioPhone, Reliance picked up a stake in the company KaiOS. It is
the operating system on which JioPhone and other feature phones run. Jio acquired 16%
stake for Rs 46 crores.
 In its most recent acquisition, Reliance Industries picked up the majority stake in this
company to bolster its Jio GigaFiber’s operations. Reliance Jio bought a majority stake in
Den Networks, Hathway Cable, and Datacom in October, 2018. Jio acquired a 66 % stake in
Den Networks with a primary investment of Rs. 2,045 crores and a 51.3 % stake in Hathway
Cable and Datacom with an initial investment of Rs. 2,940 crores. The investments were
majorly aimed to boost the rollout of Jio GigaFiber which is already taking on Bharti
Airtel, BSNL, and other broadband providers in India. Reliance Jio also has the wireless
infrastructure assets of RCom to consolidate its telecom presence.
 Keeping in mind its properties like JioTV and JioCinema, the company picked up stake in this
leading production house. Balaji produces films, TV shows and also has an OTT content
platform called ALT Balaji. It acquired a 25% stake in film and television production
house Balaji Telefilms Ltd (popularly known as ALTBalaji) in a deal worth Rs. 413.28
crores. The stake purchase will give Reliance Jio Infocomm Ltd. access to the content
generated by Balaji Telefilms. Reliance also acquired 5% stake in film entertainment
company Eros International for $48.75 million as video content becomes a key driver to
steer data consumption for its telecom venture Reliance Jio.
 Jio also acquired open telecom solution provider Radisys in June last year for $74
million (Rs. 511 crores). That deal was majorly focused towards enhancing Reliance Jio's
presence in the areas of 5G, Internet of Things (IoT), and opensource architecture adoption.
 In April 2018, Reliance Industries invested $180 million in the edtech start-up Embibe over a
period of three years. The investment helped acquire a stake of 72.69 % from Embibe's
existing investors. In April 2020, Bengaluru-based start-up Embibe received a funding of Rs
500 crores from Reliance Industries.
Embibe is an education platform that uses data analytics to deliver personalized learning
outcomes for students. It targets students across K-12, higher education, professional
skilling, vernacular languages, and all curriculum categories across India and abroad. Embibe
uses AI stacks focused on content intelligence and automation, behavioural
recommendations, and student intelligence.
 On April 3, 2019, RIL announced that Reliance Jio Digital Services Limited acquired artificial
intelligence (AI) firm Haptik for Rs 700 crores with Rs 230 crores as the consideration for the
initial business transfer that could compete against Google Assistant and Amazon's Alexa.
Thus, Reliance will hold about 87% of the business with the rest being held by Haptik
founders and employees through stock option grants. Reliance said that the investment is to
focus on the enhancement and expansion of the platform with an addressable market
opportunity of over 1 billion users in India.
Presented by
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- Bhaskar Saha (20PGPM013) -Monalisa Borah (20PGPM025) - Rishabh Shukla (20PGPM039)

-Nayanika Biswas (20PGPM027) - Navin Srivastava (20PGPM026) -Soutreyo Saha (20PGPM055)
-Sowmya Narayan S (20PGPM056)