After scooping funds via several rounds from foreign investors in 2020, 2021 would be the year where we would see Reliance Jio doubling down on its promise of powering the country to become a truly digital economy. The company would achieve it via its suite of tech products that offer education, ecommerce, entertainment, and healthcare solutions (1).
Jio is also looking to offer its bevy of tech solutions on its ‘Made in India’ smartphones. Moreover, Jio would look for its customers to use its currently on-trial 5G mobile networks to access these solutions.
In several ways, 2021 will be the year when people would see whether Jio can furnish its ‘super app’ in India, a term borrowed from WeChat, China, which offers a range of solutions via a single platform to its users.
The upcoming auctions for the 5G spectrum in the first half of 2021 encourage Jio’s massive ambitions. Mukesh Ambani, the chairman of Reliance Jio, urged the Indian government to hasten the 5G technology roll out in the country while speaking at the India Mobile Congress 2020 inaugural. He also stressed the necessity to make India 2G-mukt (2).
It is worth highlighting that later at the same event, the Indian government officials had stated that it would soon announce the spectrum band for 5G services rollout in India (3). India would use 5G for consumer and enterprise telecom services and defense, aerospace, television, and radio broadcasting. Since each of these needs a dedicated spectrum to operate without any interference, it would divide the broad spectrum based on frequencies.
Mukesh Ambani could be looking at acquiring about 300 million mobile internet users in India who are still using 2G mobile networks through the repeated push for a quick rollout of 5G in India. It includes a significant chunk of users from other tele companies such as Vodafone Idea and Bharti Airtel, which have largely phased out of 3G but have about 40 to 50% of their users still using 2G services, according to estimates.
Ambani is most likely to expand Jio’s user base in India through a countrywide shift from 4G to 5G. Notably, Reliance had begun its 5G technology trials along with US-based Qualcomm in October. The company also claims that it has achieved a speed of one GB per second (4).
Ambani had claimed that Jio would pioneer India’s 5G revolution by the end of 2021, which contrasts with Sunil Bharti Mittal’s statement, the chairman of Airtel, who stated at the same event that the country is not yet ready for the 5G rollout (5).
Now, let’s take a look at Jio’s promises that it made this year and are slated to be filled in 2021, according to the company.
Jio Android Smartphones
Reliance Jio is working with one of its strategic investors, the tech giant, Google, to roll out 100 million low-cost 4G or possibly 5G smartphones at a fraction of cost per unit in the upcoming year. Making smartphones with Google is directly reported; however, the 100 million figure is based on various news citing sources.
Ambani had announced that Jio would partner with Google to build an Android-based smartphone OS at an affordable price at the Reliance AGM, Annual General Meeting in July 2020. He also added that to power such a value-engineered handset, we would also require an equally value-engineered OS.
According to a PTI report (6), Reliance Jio is planning to roll out a 5G smartphone for less than 5,000 INR. It is also estimating to reduce the price to 2,500 to 3,000 INR a unit as the operation expands. Reports also suggest that the company would outsource the manufacturing of these smartphones to Indian vendors.
They could be out in the market by early 2021. It is worth highlighting that today, the range of 5G smartphones starts from 27,000 INR in India.
According to its official, Jio targets the 5G smartphone to the current 20 to 30 crore 2G mobile phone user base. Notably, Jio was also the first company to launch 4G mobiles in India for free for a refundable deposit of 1,500 INR.
However, it remains to see if the Jio Android smartphone can gain momentum in India’s smartphone market, which is presently dominated by Chinese smartphones such as Vivo and Xiaomi (7). The Chinese companies took over the country’s market in late 2016 and cause a loss in market share for Indian firms such as Micromax.
It is most likely that these Chinese smartphone makers would remain relevant in India considering their continous iterations in hardware specs and affordability. They were even able to cut prices further by manufacturing handsets in India.
Apart from announcing its strategic partnership with Google, which has invested 33,737 crore INR for a 7.7% stake in Jio Platforms (8), it has also partnered with Facebook as its premium strategic partner.
Jio to Collab JioMart and WhatsApp to Widen
The online grocery store of Reliance, JioMart, was launched earlier in 2020. Notably, it already has limited integration with WhatsApp. Users can text ‘Hi’ to a phone number for JioMart, followed by the initiation of a chat with the store’s virtual assistant. One can track their order status and make queries related to a product or refund via the chat.
Several reports suggest that, in the future, JioMart could emerge as a ‘mini-app’ on WhatsApp (9). If such collaboration does turn into a reality, it would be a win-win for both.
JioMart would get access to WhatsApp’s over 400 million users in India. And for WhatsApp, users shopping via its platform would mean an opportunity to drive up payments via its newly-launched payments feature WhatsApp Pay. Notably, WhatsApp Business already allows the social commerce model for several Indian startups to leverage community-driven reselling mode to increase sales.
“At Facebook, we are in the business of serving small businesses, and nowhere is this more true than in India. With more than 60 Mn small businesses and millions of people around the country relying on them for jobs – these small businesses form a big part of what our partnership with Jio can serve here.”
– Mark Zuckerberg, CEO of Facebook (10).
Ambani added that Jio would bring digital connectivity, and WhatsApp and WhatsApp Pay bring interactivity and move to close transactions and build value. Moreover, JioMart has unmatched online and offline retail opportunities. It would give small shops from rural India a chance to digitize and be at par with anyone else in the world.
Citizen’s Outbreak
Even though Reliance Jio disrupted India’s telecom market with its cheaper data plans when launched in 2016. It drove down the prices in the market and contributing massively to internet penetration in India. It also led to Reliance’s chairman, Mukesh Ambani, identified as a crony capitalism symbol in citizen-led movements.
The most recent example is the on-going protests against the new farm laws enacted by the Indian government. Farmers protesting on the Delhi borders have alleged that the laws would work to the detriment of farmers and benefit corporates like Reliance and Adani Group.
As a part of their protest, in the previous week, videos surfaced of members of the village panchayat in Punjab shutting down Jio’s mobile towers. There are reports of protesting farmers in Punjab cut the power supply to Jio’s mobile towers in several parts across the state. It includes Nawanshahr, Ferozepur, Mansa, Fazilka, Barnala, Patiala, and Moga districts in the past several weeks (11).
Reliance Jio then wrote to the TRAI, the Telecom Regulatory Authority of India (12) blamed its rivals Airtel and Vodafone Idea for spreading rumors in Punjab that Jio would gain from the farm laws implementation.
It is worth highlighting that cutting power supply to mobile towers would affect the internet services and supply. It can hurt the lives of several people, from students to working professionals. Even in emergency times, internet access is necessary, suggesting that such steps taken by farmers in Punjab aren’t a judicious tactic for voicing their protests with the central government’s decision. As a part of the protest, people are also boycotting Jio sim cards and products. However, even those looking to port their numbers to other telcos like Airtel would have to wait at least 48 hours for their services to resume.
The largest telecom in India has asked the regulator to take strict action against its rivals.
According to sources, even if temporary, telcos do not want to lose customers in that segment since Punjab, Delhi, and Haryana are high ARPU regions. Notably, the average revenue per user is a key industry metric. At the end of quarter three, Vi’s ARPU is at 121 INR, Bharti Airtel is at 144 INR, and Jio is at 139 INR (13).
It is also worth noting that as of September-end, Jio has 406 million customers, Vi has 272 million subscribers, and Airtel has 294 million. The leader in the customer market has an ambitious target of reaching 500 million subscribers.
Unlike its counterparts, who are burdened with legacy 2G and 3G networks, Jio has claimed several times that its present 4G technology is ready to upgrade to 5G.
Nevertheless, it is unclear whether these protests would boil over or die down with prevailing good sense.
Jio to Make a Comeback?
In 2021, Jio is looking to relaunch its super affordable feature phones, JioPhone, whose production was severely impacted in 2020 because of the component supply issues amid the COVID-19 pandemic. It was once sold at a price below 700 INR, but there are reports that it would increase about 1000 INR because of the surge in component prices.
The new JioPhone would come with a Jio 4G subscription plan, facilitating 2G and 3G users’ migration from rival companies such as Vodafone Idea and Bharti Airtel to Jio.
JioPhone, originally launched in 2017, became a huge hit for Reliance Jio because of its affordable price. But the market has made a drastic change since then. Considering the need for a smartphone these days for remote learning and working, a feature phone is a difficult sell (14).
In June 2020, the company had launched the Jio UPI ID for users in select cities like Delhi, Mumbai, among others. Reliance Jio stated that the Jio UPI ID would enable MyJio App to become a super app for all digital transactions for Jio customers (15).
In August, about 1,000 JioPhone users could make and receive UPI payments through the JioPay app on their feature phone. There are expectations that in the upcoming year, Reliance Jio would look to expedite its market presence further in the digital payments space via JioPhone.
JioGlass Launch
While there are no concrete reports on when Jio’s most cutting edge product would hit the market, but there are speculations that the mixed reality solution would hit the market in 2021. Jio Glass was demonstrated at the Reliance AGM meeting in July 2020. The company stated that it is designed for teachers and students to enable virtual 3D rooms and conduct holographic classes via Jio Mixed Reality Service in real-time.
“Jio Glass is at the cutting edge of technology that provides best-in-class Mixed Reality services to give users a truly meaningful immersive experience.”
– Kiran Thomas, President, Reliance Industries Limited (16).
Jio Glass weighs about 75 grams and would come bundled with 25 apps to allow AR video meetings and several other features. A user would join a virtual meeting not on their conventional 2D screens but as a 3D avatar. Netizens were left in awe after watching the Jio Glass demo, and many of them saying, ‘the future is here (17).’
Apart from these, there would be several other upgrades and enhancements on its existing products, ranging from its health-tech app JioHealth Hub to its video conferencing solution, JioMeet (18).
Take Away
The massive fundings Reliance’s Jio Platforms has made throughout 2020 are from some of the biggest technology names. It includes global organizations like Intel, Google, Qualcomm, Facebook, and other private equity investors such as KKR, TPG, Silver Lake, and General Atlantic. The funding has propelled Jio into a different league altogether.
Collaborations with global tech leaders and massive fundings have gained Jio a crucial lead in new technologies. Jio is likely to give its peers sleepless nights if we combine it with its track record of cut-throating pricing, use of money power, and influence in the present administration.
Jio also aims to dominate several segments from smartphones to apps and developing new users and is not only focusing on connectivity. It is also making use of technologies like AI and blockchain.
Most importantly, all eyes are Jio at the moment to see whether it would be able to materialize its 5G ambitions in 2021. But considering the current scenario, it would not be a reality without its own challenges.
