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Reliance Jio Prime: Is Jio Already Past It's Prime?

29 Mar, 2017
Reliance Jio Prime Is Jio Already Past It is Prime

Telecom in India (and everywhere else in the world), is a marathon – actually a steeplechase. And like any long-range sport, the rules are simple – keep running, stay in the game, but conserve your resources with the end game in mind.

Only those who pace themselves and stay alive to competition can even hope to be anywhere near the finish line.

But newcomers to the sport often make the mistake of speeding up too early, the trophy looming large in their thoughts. Some even consider the more staid approach as a needlessly pessimistic gameplan.

Consequence? More often than not, they burn out just 10% into the race.

Is that happening in Indian telecom? Seems so.

From the start, Reliance Jio was saddled with three weights around it’s ankles – being the newest entrant in the telecom game, it needed to make a loud splash (to get people’s attention), it needed poach away customers from their current providers since there aren’t too many new customers to be had in the already-overcrowded Indian telecom market. Most importantly, it (Jio) was saddled by it’s own seven-year-long run-up to launch. Behemoths have been built ground-up in lesser time – ask Google, or Facebook!

Anyway, in order to achieve the first two objectives, Reliance did what Reliance does best – appeal to Indian customers through their wallets – freebies are the currency that Reliance often relies on, but this time it seems to be backfiring on them.

Embarrassingly so.

When the network launched to the general public a little over six months, it completely rocked the telecom market in India. Offering all it’s wares for free, it created a shockwave in a market that is price-sensitive to a fault.

People switched to Reliance Jio in millions, making it the fastest growing network in the history of the world. Customers flocked to it, to experience the network (but between you and me, most were just happy to get gazillions of bytes of Mobile Data free). Customer acquisition numbers were bandied about, newsrooms aghast, and barrels of newsprint ink spilt toasting the new entrant. Last I heard, over 122 million people had signed up with Jio. That is a staggering number for a market already thriving with eight other operators.

At Chip-Monks, many a water-cooler moment was spent dissecting the reality people had forgotten – most customers had bought additional connections to get onto Jio – they hadn’t transferred out of their original provider’s network! That, by itself, foretold what would happen once the freebies were retracted. People would have to choose whom to spend their dime on.

And in the telecom world, that spend is decided upon three things – network quality, customer service (actually the lack of the need of it) and finally, cost.

The first factor itself became Jio’s stumbling block – as people experienced Jio, they realised that they were sacrificing network quality for the pennies they saved, gaining Data quotas they couldn’t use because the service didn’t always work, speeds were lower at 4G than other providers’ were at 3G. So there wasn’t much in there for customers to appreciate.

Now, as freebies come to an end, so does the novelty.

The question thus became – what would Jio do, to hold onto these 122 million?
Answer: follow Amazon and create a “Prime” club. But instead of customer experience being the calling card for the club, Jio fell back on what it knows best – more freebies.

Launched five weeks back, on the 21st of February, the Jio Prime offer provides a year long supply of Data and calls at extremely subsidised rates. Paying just INR 99 to enrol with Jio’s Prime program and only INR 303 (which is less than US$ 5!) gets the member 28 GB of 4G Data and free calls to anyone in India!

Sounds like a sweet deal, right?!

Well, market response to it does not seem to reflect that – of the current 122+ million Jio customers, only close to about 16 million have signed up for the Jio Prime offer.
That pale number, is then the answer – not many people are interested in Jio when it’s not free.

Embarrassingly, the number is less than half of the target Jio had reportedly set for itself internally.

Just two days from now, Reliance Jio will switch over to being a paid service for the first time and this lukewarm-at-best response, must have Ambani worried – especially after pouring in an additional US$ 4.4 billion into Jio just two months ago.

Has Jio tired itself out already? Did it’s strenuous 400-meter dash cost it a place in the marathon? We’ll only figure that out as time passes, and Jio’s mettle is further tested.

In the meantime, we see this as an opportunity for all the other operators in the market to gain back some of the space and the customer-sovereignty they may have lost during the run. That, however, is also not going to be easy.

The telecom industry in India is struggling, to say the least. The reasons are many and it’s not pleasant for anyone. There is looming debt, over every big wig in the industry, and Jio’s brazen entry only made it worse – the operators that were already struggling to make certain ends meet were forced to drain their resources further, to stay alive in the cut-throat competition.

To combat his new annoying neighbour on the block, who was enticing the world with ‘free service’ coated candy, competitive offers were put out on the market by each operator – Airtel, Vodafone, Idea and even BSNL. While we don’t have numbers yet, however it’s clear – the customer benefited by the turf war. And that’s always a good thing.

Customers saw a hitherto unseen benevolent and generous side of their telecom operator, and speaking from personal experience – it was a good feeling, to be wanted, and to be valued.

Going back to my earlier statement, Indian telecom customers value network quality and customer service more than cost – and each Telco needs to focus on these two critical elements if they are to remain in the marathon. Jio’s mad-dash and how it caused the somewhat-complacent existing operators to up their game, should remain in their minds for some time to come.

Back to Jio – not having achieved the intended numbers that Jio had set for itself, the question arises – will Jio extend the deadline to sign up for Prime? And if it does, will others extend their competitive offers?

Time will tell, but I am forced to recall my closing words on my earlier article about Jio and it’s approach –

All said and done, Jio has set many ripples in the water, however since it has to wade the same waters itself, one would think it’ll learn to swim instead of splashing around“.