To say that Reliance Jio has taken the world of communication by storm would be an understatement. By offering a whole gamut of free services, albeit for a pre-notified length of time, you set the cat among the pigeons and created ripples in the market, leaving your rivals reeling under the impact and buckling under, unable to offer competitive pricing.
And now, having captured a sizeable portion of the market, you have priced some of your products, effective from April 1. You announced that the tariff would be much lower than what is prevalent in the market, which, in simple parlance, means that the undercutting will continue and the pressure on the other providers will be maintained. It goes without saying that unless they too scale down their rates, they might well be forced out of the market and Jio, true to its name, will be in a position to rule the waves. This are happy tidings for all users as they would stand to benefit from the price war and can choose the provider who is able to provide a slew of services for the least price.
A conglomerate like yours can easily withstand the rigours of the marketplace and this places you at a distinct advantage as compared to your rivals. Jio has revolutionised the communications industry and I am certain that with your business acumen you might well be having several more aces up your sleeve. So, good luck and godspeed. Jio aur jeete raho.
Long live Jio
As one who has been an ardent admirer of the fabled entrepreneurial skills of your family, I cannot conceal my happiness at the way Jio has transformed the telecom space in just a short span of a few months. Impressive.
But I have a caveat, though. The country has a surfeit of operators—almost 12. Given the scale of your operations and the traction you are bound to get once you operationalise the new tariff plan beginning April 1, I would like you to ponder over the following points:
Tariff wars and aggressive pricing coupled with enticing offers are going to be the order of the day. However, given the innovative strategies you are proverbially known for, I would expect that competition would get killed. This is not a good thing to happen. Can I suggest you think of consolidation in the industry? Mergers and acquisitions would be beneficial for all. It will give synergy and more traction. No more than 3 or at the most a maximum of 4 players in the market.
Government is actually giving the much-needed digital push. Despite not having the first-mover advantage you have seized the opportunity and become an important player. Now that you are monetising the operations, please plan it in such a way that the rural brethren who cannot afford a costly handset can get a bundled offer at an affordable price.
These measures—consolidation of the telecom space by keeping the number of operators to 4 or less and providing durable handsets at below Rs 2,000 will be a fitting tribute to your father whose innovative and pragmatic planning is legendary.
Without sounding effusive, let me say Jug Jug Jio!
A sustainable plan needed
As I write this letter, I am quite sure thousands of Jio SIM cards would be switching hands in exchange for time and some personal information. The moment I realised that I can use unlimited GBs of mobile data for zero rupees, I couldn't help but think of how I was robbed by these other service providers that had me draining thousands out of my pocket in a few months just for a handful of GB's that they provide.
I have to admit, more than the contentment of getting unlimited mobile data for free, the satisfaction of getting a chance to ditch these other cruel service providers was very fulfilling. It was a feast to my eyes watching my poor service provider send a revised tariff every now and then with myself playing the role of an upset girlfriend by not responding. Jio did help in quenching the thirst of my egotistic mind.
But, it is all optimistic and beneficial only when my consumer hat is on. When I take it off, it is gloomy and distrustful. This is a clear flexing of capital power to break down other players. But it is very alarming to think of a competition-less business when other players run out of fuel to carry on. Considering the fact that you are an intelligent businessman, can we expect the prices to rise back up if such a situation comes? What is going to happen to the thousands who will eventually lose job because of this predatory pricing? And subsequent impact on the markets due to the volatility?
Laying down a sustainable path ahead will put a seal to this scepticism and uncertainty.
Jio aur jeene do, Sir.