G.L.

Bajaj Institute of Management & Research

Approved by A.I.C.T.E., Ministry of HRD, Govt. of India
Plot No. 2, Knowledge Park-III, Greater Noida PGDM

BATCH-2022-2024

TELECOM INDUSTRY ANALYSIS

(RELIANCE JIO INFOCOM LIMITED)

Submitted By: Submitted to:

Student Name – Shaban Beg Prof. Sumit Gulathi
GLBIMR Roll No – PGDM 22042
Batch – 2022-2024
 Company: - Reliance Jio Infocomm Limited
Jio Telecom is a subsidiary of Reliance Industries Limited, one of the largest
conglomerates in India. The company is led by Mukesh Ambani, the Chairman and
Managing Director of Reliance Industries. Jio was officially launched in September 2016
and quickly gained attention in the Indian telecommunications market due to its disruptive
pricing strategies and extensive network infrastructure. Jio built a robust 4G LTE network,
offering high-speed internet services across the country. The company invested
significantly in expanding its network and providing affordable data and voice
services to consumers. Jio offers a range of services, including mobile telephony, wireless
broadband, and digital services. It has been a major player in driving digital
adoption in India.

Jio's entry into the telecom sector led to significant disruptions, with the company offering
free trials and low-cost data plans, prompting other telecom operators to revise their
pricing strategies. Jio has been at the forefront of adopting and introducing new
technologies, including VoLTE (Voice over Long-Term Evolution), which provides high-
quality voice calls over the 4G network. Jio rapidly gained a massive subscriber base within
a short span of time, becoming one of the largest telecom operators in India.

Jio stands out from other Indian telecom companies in several key ways:

Disruptive Entry and Pricing:

 Aggressive pricing: Jio's initial entry in 2016 shook the market with incredibly low-
cost data plans, offering free data for months and significantly undercutting
competitors. This triggered a price war in the industry, benefiting consumers
overall.
  Freemium model: Jio continues to offer a mix of free and paid data plans, catering
to diverse customer segments with varying needs and budgets.

Technology:

 4G focus: Unlike legacy operators struggling to transition from 2G/3G networks,

Jio built its infrastructure entirely on 4G technology, resulting in higher speeds and
a more efficient network.
 Fiber broadband expansion: Jio is aggressively expanding its fiber broadband
network, offering high-speed internet to homes and businesses, further
differentiating itself from primarily mobile-focused competitors.

Digital Ecosystem:

 Content and app bundling: Jio bundles its telecom services with its own digital
content platforms like JioTV, JioMusic, and JioCinema, creating a stickier
ecosystem for users.
 Beyond telecom: Jio is moving beyond pure telecom services by venturing into e-
commerce with JioMart, financial services with Jio Money, and other digital
initiatives, diversifying its revenue streams and customer engagement.

Other differentiators:

 Strong financial backing: Jio benefits from the financial muscle of its parent
company, Reliance Industries Limited, allowing it to invest heavily in infrastructure
and marketing.
 Focus on innovation: Jio has a reputation for adopting new technologies and
experimenting with innovative offerings, like its recent foray into cloud gaming.
 RATIOS
Analyzing Jio Telecom Company through key financial ratios reveals valuable insights into
its financial health, operational efficiency, and future prospects. Here's a breakdown of
some of the most important ratios:

Profitability Ratios

 Earnings per Share (EPS): 15.77 (as of March 2023). This indicates Jio's strong
earnings generation per share, suggesting profitability and shareholder value.
 Net Profit Margin: 75.1% (as of March 2023). This high margin shows efficient
cost management and ability to generate significant profits from revenue.

Liquidity Ratios

 Current Ratio: 8.1x (as of March 2023). This ratio indicates Jio's strong ability to
meet its short-term obligations with its current assets, demonstrating financial
stability.
 Debt-to-Equity Ratio: 0.0 (as of March 2023). This exceptional ratio implies Jio
has no significant debt burden, a major strength compared to many competitors.

Efficiency Ratios

 Revenue to Assets Ratio: 0.49 (as of March 2023). This ratio signifies Jio's
effective utilization of assets to generate revenue, showing operational efficiency.
 Inventory Turnover Ratio: N/A. Jio primarily deals with services, making this
ratio less relevant in their case.
 Valuation Ratios

 Price-to-Earnings Ratio (P/E): 34.21 (as of January 15, 2024). This relatively high
ratio indicates investors are willing to pay a premium for Jio's future growth
potential.

 Price-to-Book Ratio (P/B): 1.30 (as of January 15, 2024). This ratio suggests Jio's
market value is slightly higher than its book value, implying investor confidence in
its future trajectory.

MANAGEMENT
 Chairman: Mukesh Ambani (also heads Reliance Industries Limited, Jio's parent
company)
 MD & CEO: Akash Ambani (Mukesh Ambani's son)
 Other Key Executives: K.S. Rao (CFO), Sunil Dutt (Chief Customer Officer), Jioji P.
Chacko (Director of Network)
 Jio Company Analysis: Strengths, Weaknesses, Opportunities, and Threats (SWOT)

Strengths

 Market Leader: Jio boasts the largest subscriber base in India, exceeding 400 million
users. This dominant position translates to strong bargaining power with suppliers and
partners.

 Disruptive Pricing and Strategy: Jio's initial entry with aggressive pricing and free data
offers revolutionized the market, establishing them as a major force. They continue to offer
competitively priced plans and innovative bundles to retain customers.

 Robust 4G Network and Fiber Expansion: Jio possesses a nationwide 4G network

known for its speed and reliability. Their ongoing fiber broadband expansion opens doors
for high-speed internet access, catering to growing demand.

 Diversified Digital Ecosystem: Beyond core telecom services, Jio provides a variety of
digital platforms like JioTV, JioMusic, JioCinema, and JioMart, creating a sticky
ecosystem for users and additional revenue streams.

 Strong Parent Company Backing: As a subsidiary of Reliance Industries Limited, Jio

benefits from their financial muscle, allowing for large-scale investments in infrastructure
and marketing.

Weaknesses

 High Debt Levels: Jio's aggressive expansion led to significant debt

accumulation. Managing this debt while balancing future growth plans can be challenging.

 Dependence on Mobile Data Revenue: While lucrative, reliance on mobile data makes
Jio vulnerable to market fluctuations and potential saturation. Diversifying revenue
streams is crucial for long-term sustainability.
 Rural Market Penetration: Despite strides in rural coverage, achieving full penetration
and profitability in rural areas remains a challenge due to infrastructure costs and lower
ARPU (Average Revenue Per User).

 Limited Enterprise Focus: Jio's current focus on individual consumers leaves the
lucrative enterprise segment relatively untapped. Strengthening their offerings and
targeting corporate clients could be a missed opportunity.

 Regulatory Challenges: The telecom industry faces strict regulations and potential policy
changes that could impact Jio's operations and pricing models.

Opportunities

 5G Technology: Jio's early investment in 5G infrastructure positions them to capitalize on

the growing demand for high-speed mobile internet, offering new services and
applications.

 Digital Services Growth: The burgeoning demand for digital content and e-commerce
presents immense opportunities for Jio to strengthen its existing platforms and expand into
new areas.

 Rural Market Potential: Despite challenges, continued focus on improving rural network
coverage and affordability can unlock a vast untapped market segment for Jio.

 Enterprise Expansion: Targeting the enterprise segment with tailored solutions and
leveraging their existing infrastructure can be a significant growth driver for Jio.

 Partnerships and Acquisitions: Strategic partnerships with technology companies and

content providers can further strengthen Jio's digital ecosystem and offerings.
 Threats

 Competition: Established players like Airtel and Vodafone-Idea continue to be strong

competitors with loyal customer bases, and new entrants might challenge Jio's market
share.

 Data Price Wars: Potential price wars in the market could erode Jio's profitability if they
succumb to competitive pressure.

 Regulatory Uncertainty: Regulatory changes or interventions could restrict Jio's

operations or limit their future growth plans.

 Technological Disruption: The emergence of new technologies or alternative

communication methods could disrupt the traditional telecom landscape, posing a
challenge for Jio.

 Economic Downturn: An economic slowdown could impact consumer spending on

mobile services and broadband, affecting Jio's revenue generation.

Jio's dominant market position, strong network infrastructure, and diversified digital
ecosystem offer a powerful foundation for future growth. However, managing debt,
diversifying revenue streams, and navigating increasing competition remain critical
challenges. By capitalizing on emerging opportunities in 5G, digital services, and the
enterprise segment, while mitigating potential threats, Jio can solidify its position as a
leading force in the Indian telecom and digital landscape.
 Business Model of Jio
Reliance Jio used a loss-leading strategy which means it sold its products or services at a price
lower than the actual price in the market. Reliance Jio initially started giving its users free of
cost data and voice calls for a long period of time which helped them gain a large customer base
and a higher market share.
Then later after the free data offer was over it started providing its customers with cheaper
recharges which helped them to retain their customers.
Here are some points of Business Model of Jio: -
1. Price Strategy of Reliance Jio
Jio has adapted the best pricing strategy in the market. Jio modifies its pricing strategies every
now and then to provide its customers with the best prices in the market. It provides its
customers with the cheapest possible prices for its products and services in the market. This
helps them to provide the best offers for their customers.
2. Promotion strategies of Reliance Jio
At a time when it comes to making constructive brand awareness, Reliance Jio has taken on a
little bit of a hostile marketing strategy on radio, television, magazines, newspapers, and
various social media platforms like YouTube, Twitter, Facebook. This marketing is also used
by film industry celebrities, it helps them in doing acting in advertisements and joining their
brand to work with them.
Let us now see the product and service segmentation of Reliance Jio.
3. Product and service segmentation of Reliance Jio
Services
 JioPages – a web browser for Android devices
 JioChat – instant messaging app
 JioCinema – online HD movie library
 JioCloud – cloud-based backup services
 JioHealth – health-related services app
 JioNews – Platform which provides the latest news
 JioMeet – video-conferencing platform
 JioMoney – online transaction app
 JioSaavn – app for music streaming in English and Indian languages
 JioSecurity – security app
 JioTV – TV Channels streaming service
 JioVoice – VoLTE phone simulator
 MyJio – manage Jio account and digital services associated with it

Products
 Mobile broadband – Its 4G broadband services started all over India in 2016. It offers vice
services, instant messaging, and streaming movies.
 JioFiber – In 2018 it started testing new triple play fiber to the homer services which was
known as Jio GigaFiber, which provide an internet speed ranging from 100 – 1,000 Mbit/s. It
launched its services officially in the year 2019 as JioFiber for its third anniversary.
 JioPhone Next – On 24 June 2021, Mukesh Ambani announced the launch of JioPhone Next.
It is a fully-featured Android smartphone co-developed with Google as part of its long-term
partnership. The budget smartphone will be launched in India on 10 September 2021.

Let us now see the competitors of reliance Jio.

Top Competitors of Reliance Jio
Here’s the list of top competitors of Reliance JIO:
1. Bharti Airtel
2. Vodafone Idea
3. BSNL (Bharat Sanchar Nigam Limited)
Failed Campaigns of Reliance JIO
Reliance JIO more than often grabs attention with its unique marketing. But, there have been
a few times when the campaign failed to connect with the audiences and gained backlash.
Here are a few examples of failed campaigns of Reliance JIO:
 “Welcome Offer” extension: In 2016, Reliance Jio launched a welcome offer that provided
free unlimited voice and data services for six months. The offer was a huge success and
helped Reliance Jio to quickly acquire a large customer base. However, when the company
extended the offer for another six months, it faced a lot of criticism from its competitors. The
competitors argued that the extension was unfair and that it was stifling competition in the
telecom market.
 “Happy New Year Offer”: In 2018, Reliance Jio launched a “Happy New Year Offer” that
provided free unlimited voice and data services for the month of January. The offer was again
a huge success, but it also led to a lot of network congestion. The company was unable to
handle the increased load on its network, and many customers experienced call drops and
slow data speeds.
 “Jio Diwali Dhamaka” offer: In 2019, Reliance Jio launched a “Jio Diwali Dhamaka” offer
that provided a free JioPhone to customers who recharged with a Rs. 649 plan or higher. The
offer was very popular, but it led to a shortage of JioPhones. Many customers who had
recharged with the Rs. 649 plan were unable to get a JioPhone.
 “JioFiber” launch campaign: In 2020, Reliance Jio launched its fixed wireless broadband
service, JioFiber. The company launched a massive advertising campaign to promote the
service, but it faced a lot of criticism for its misleading claims. The company claimed that
JioFiber would provide speeds of up to 1 Gbps, but many customers reported speeds that were
much lower.
 “JioMart” launch campaign: In 2021, Reliance Jio launched its online grocery delivery
service, JioMart. The company launched a massive advertising campaign to promote the
service, but it faced a lot of criticism for its poor customer service. Many customers
complained about long delivery times, missing items, and cancellations.
 Geographical Division
Jio operates across all 22 telecom circles in India, providing mobile and broadband services
to a vast and diverse population. Here's a breakdown of their geographical reach:

 Jio boasts a pan-India network presence, covering both urban and rural areas. This
extensive reach allows them to cater to a wide range of customer needs and preferences
across the country.

Circle-Based Operations:

 India's telecommunications sector is divided into 22 telecom circles, each with its own
unique market dynamics and regulatory environment. Jio operates in all of these
circles, ensuring consistent service quality and accessibility throughout the country.

Focus on High-Growth Markets:

 While Jio maintains a strong presence in rural areas, they prioritize metropolitan cities and
developing towns for subscriber acquisition. These high-growth markets offer significant
potential for revenue generation and user base expansion.
 Regional Variations:

 Jio tailors its offerings and marketing strategies to specific regional needs and
preferences. This ensures they resonate with local audiences and maximize customer
satisfaction in each circle.

Network Infrastructure:

 Jio has invested heavily in building a robust 4G network infrastructure across the
country. They are also actively expanding their fiber broadband network, offering high-
speed internet access to homes and businesses in various regions.

The geographical distribution of Jio's operations plays a crucial role in their success. By
understanding the unique characteristics of each telecom circle and adapting their approach
accordingly, Jio has established itself as a leader in the Indian telecommunications market.

Here are some additional insights into Jio's geographical reach:

 Jio enjoys a particularly strong presence in its home state of Maharashtra, where they hold
a significant market share.

 They have also made significant inroads in South India, where their aggressive pricing and
innovative offerings have resonated with customers.

 In recent years, Jio has focused on expanding its reach in North India, where they face stiff
competition from established players like Airtel and Vodafone-Idea.

Jio's geographical strategy is constantly evolving as they strive to maintain their market
leadership and cater to the ever-changing needs of their diverse customer base. By
leveraging their national presence, regional understanding, and commitment to innovation,
Jio is well-positioned to continue shaping the Indian telecommunications landscape in the
years to come.

Share by Segments

When it comes to revenue share by segments in Jio Telecom Company, there are four key
players:

1. Mobile Data: This remains the dominating segment, providing the largest chunk of
revenue for Jio. Their aggressive pricing and focus on affordable data plans for diverse
usage levels have attracted a massive subscriber base, leading to high data consumption
and strong revenue generation.

2. Digital Services: This segment, encompassing offerings like JioTV, JioMusic,

JioCinema, and JioMart, is experiencing rapid growth and gaining significant traction. Jio
leverages its extensive subscriber base and data usage to push its own digital services,
creating a sticky ecosystem for users and an additional revenue stream.

3. Enterprise Solutions: While still in its early stages, Jio offers customized telecom
solutions for businesses, including mobile data plans, broadband connectivity, and cloud
services. This segment has the potential for future growth as Jio targets corporate clients
and expands its network infrastructure.

4. Fiber Broadband: Although currently a smaller contributor, Jio's rapidly expanding

fiber broadband network holds promise for future revenue growth. Offering high-speed
internet access to homes and businesses can attract new customers and generate additional
revenue alongside mobile data.

Here's a breakdown of the estimated share of revenue for each segment:

 Mobile Data: 70-75%

 Digital Services: 15-20%

 Enterprise Solutions: 5-8%

 Fiber Broadband: 2-5%

However, it's important to note that these are estimates and the actual figures may vary
depending on various factors like market conditions, consumer trends, and Jio's ongoing
expansions and initiatives.

Here are some additional points to consider:

 Jio is constantly innovating and diversifying its offerings within each segment, further
optimizing its revenue share across different areas.

 The growing importance of digital services is expected to continue, potentially even

challenging the dominance of mobile data revenue in the long term.

 Jio's expansion into fiber broadband has the potential to significantly alter the revenue
share landscape in the future, especially as high-speed internet becomes increasingly
crucial.