Reliance Jio: Marching Toward Monopoly
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Case Code: ECON080 Case Length: 12 Pages Period: 2017-2019 Pub Date: 2020 Teaching Note: Available |
Price: Rs.300 Organization : Reliance Jio Infocomm Limited Industry : Technology & Communications Countries : India Themes: Monopoly, Free Market, Industry Consolidation |
Abstract Case Intro 1 Excerpts
Excerpts
The Rise of Jio
Owned by India-based conglomerate Reliance Industries Limited (RIL), Jio was a telecommunications company that operated and provided services in all 22 telecom circles of the country. It provided fourth generation (4G) Long-Term Evolution (LTE) services and was the first VoLTE (Voice over LTE) service provider in India. The Jio service was originally introduced in beta for only Reliance employees on December 27, 2015, to mark the 83rd birth anniversary of Reliance Industries founder Dhirubhai Ambani. At this time, India had nine private-sector wireless providers and Jio was the tenth telecom operator in a crowded market. On September 5, 2016, Jio formally launched its services with a plan called 'Welcome Offer'.....
Challenges for the Sector
The court ruling created panic among the telecom operators, who apprehended a far bigger danger for the sector. Some analysts said if the SC verdict was implemented, it could pave the way for a duopolistic telecom market in India comprising Airtel and Jio, as Vodafone Idea's very survival was at stake. But duopoly was not a healthy market structure, as consumers would have limited pricing options, they said. Ambareesh Baliga, an independent stock market analyst, warned...
Way Forward
In October 2019, Mukesh unveiled a plan to set up a US$24 billion e-commerce platform that would help his ambition to dominate India’s Internet shopping space. Industry experts saw this e-commerce platform as an Alibaba-like venture to disrupt the online shopping space, which was being dominated by e-commerce companies like Amazon.com, Inc. and Flipkart Private Limited in India. For Reliance’s digital business, its board proposed investments of Rs1.08 trillion (US$15 billion) into a wholly-owned subsidiary, which in turn would be used to reduce Jio's debt. A series of capital transfers would help Jio become debt-free by March 2020, company sources said...
Exhibits
Exhibit I: Cost of 1GB Mobile Data in Top Five and Bottom Five Nations
Exhibit II: Top Broadband Service Providers in India (2018)
Exhibit III: Telecom Service Providers in India by Market Shares and Subscriber Base (As of August 2019)
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