INDIA: Telecom giant Jio’s history dates back to 2007 when it was founded as Reliance Jio Infocomm Limited in Ahmedabad. Mukesh Ambani, India’s richest man and son of industrialist Dhirubhai Ambani, laid the stones for the company and laid its grounds in the 4G era of the Indian Telecom Sector.
Jio’s journey began in mid-2010 as Infotel Broadband Services Limited (IBSL). IBSL was the very first telecom operator which had won the 4G broadband spectrum in over 20 circles in India. Later, in 2013, IBSL was renamed Reliance Jio Telecom Limited (RJIL) or simply JIO.
The big question is how Jio became the largest telecom company in India, surpassing telecom mammoths like Bharti Airtel and Vodafone.
Presence of a strong parent organization
JIO’s parent organization, Reliance Industries Limited (RIL) had been one of the country’s most successful and financially sound companies. Founded in 1973, the conglomerate has its roots in textiles, mineral, oil, natural resources, retail, petrochemicals, telecommunications, etc.
RIL handles almost 5% of the government of India’s total revenues from excise and customs duty. Other than that, it is also the highest income taxpayer in the private sector in India.
JIO had its base built on a platform that had the trust and understanding of the audience. With a history of work in different sectors across the country, RIL had made the introduction of JIO more perpetual and revolutionary.
The power of connections
The tale of the connections of the Ambani family members with bureaucrats and politicians dates back to the era of Dhirubhai Ambani. As a promising industrialist who had foreseen the future, Dhirubhai had played a lot of tactics to make sure his company reaches the top of the hill.
In a similar fashion, Mukesh Ambani is known for his close ties with members of the ruling-Bhartiya Janata Party (BJP) and especially with Prime Minister Narendra Modi. Jio’s rise from a nowhere company to the largest telecom operator in less than 10 years hints at the various direct, indirect, or shrouded contributions from the political arena.
Demonetisation : A boon for Jio
On 8 November 2016, the Government of India announced the demonetization of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2,000 banknotes for the demonetized banknotes.
Various reports were going around during demonetization that Ambani knew about the government’s plan to disburse the 500 and 1000 notes. Ambani, a supporter and a close ally to the Prime Minister, made a king’s move to create a buzz and planned a mega-launch of free 4G service by Jio.
Within the first month, Jio announced it had gained 16 million subscribers in India and later crossed the 50 million subscriber mark in 83 days since its launch. In early 2016, Jio had made alliances with global companies like Deutsche Telekom, Millicom, Orange S.A., Rogers Communications, MTS, etc.
Dominating hold over the competitors
Before the 4G allocation of Jio, existing telecom operators in India viz. Vodafone, Idea, Bharti Airtel, etc. had flourished their business. After Jio offered the 4G service, the actual value of these companies fell miserably.
Other than its customer count, the operators lost their financial hold in the market. As for the case of the second-biggest telecom operator Airtel, incurred huge losses. A 2017 report by NDTV stated that “Bharti Airtel Reports Lowest Profit in 4 Years, Hit by Demonetisation and Reliance Jio”. Vodafone India lost its whole chunk of subscribers to JIO and suffered losses in billions. In 2019, BBC had reported Vodafone’s $7 billion loss in a quarter.
With his strategies, Mukesh Ambani made sure that no other company could plan to expand and grow as quickly as Jio.
Marketing the formula of ‘free’
In a statement at the annual general meeting of Jio, Mukesh Ambani said that “Every Indian is used to Gandhigiri, now every Indian can do ‘datagiri’ which is an opportunity to do unlimited good things with unlimited data.”
When the entire nation was curbing with the drastic decision of demonetization, Jio rolled out its free calling, data, and SMS plans. Taking notice of the current financial situation in the market, Jio did some rigorous campaigns and marketing to make sure that the word is out to each Indian. As more and more people readily opted for the free JIO plans, Mukesh Ambani had foresighted a long future for JIO.