The Jio disruption…the Teacher’s Day Gift to Digital India?

September 1, 2016 will be a red letter day in the history of “Reliance”, which is a household name in India, made so by the great Mr Dhirubhai Ambani. Mr Dhirubhai operated in a different era where licensing was the key to industrial success. Though he stared as a boy who dispensed petrol in petrol bunks, Dhirubhai overcame the odds in the society to raise a large conglomerate. Though some times, his achievements were credited to manipulation of the license raj system, what remained in the end was that Dhirubhai created a huge manufacturing base in India giving employment to thousands of people. He also shared his wealth to millions of his share holders through his own disruptive Stock Market practice of ” Debentures” converted into “Equity”. I would credit much of India’s stock market growth in the 80’s to Mr Dhirubhai’s entrepreneurship and willingness to share the benefits with ordinary people.

The second generation of Mukesh and Anil developed the enterprise though they so far had not established an intention to share the corporate wealth with public the way Dhirubhai did.

Now as the third generation of Dhirubhai family enters the management scene, Mukesh has unleashed the “Reliance Jio” which has the potential to stir up the entire telecom scenario in such a way that we can describe it as a “Disruptive Moment” in the Telecom industry.

Will this “Free Voice” over mobile and “Globally Cheapest Data over LTE network” transform our society as we have never envisaged is the moot point of discussion today.

Yesterday, as Mukesh made his speech at the AGM, the market capital of Airtel, Idea and even RCOM dived by over Rs 13500 crores as doubts surfaced if these companies can exist after the Jio onslaught. But at the same time even the Reliance stocks did dip indicating that the shareholders of Reliance thought that this was a  business strategy to eliminate the competition though it may bleed Reliance itself for some time. Ultimately, whoever has the deeper pockets may survive and Mukesh thinks that he has the deep pockets to ride over a phase where there could be large scale loss of business and revenue for the incumbent operators who have some sunk costs to manage. Survival of these companies will require a high marketing acumen and some innovative as well as painful initiatives that these companies may have to initiate.

Inevitably the Government will be dragged into controversies since while on the one hand the Modi Government should be happy at any initiatives that will help its Digital India Campaign, which Reliance Jio project services would definitely do, there are policy issues of inter connectivity between Jio and incumbent players which will be contested both at the level of the DeiTy as well as in the Courts. Government needs to ensure that it does not get dragged into controversies that it favours either one or the other group in resolving the crises.

Government also has a responsibility to see how its own BSNL services are revamped to meet the competition. During the UPA days the popular thinking was that BSNL was deliberately choked by corruption at political level to provide advantage to the private operators. But in the last few months, the current Government appears to be trying to change this perception and now is another opportunity for BSNL to show that it is not much behind the other Private players when it comes to strategizing on the market issues.

At the Consumer level, if “Voice Calls” are not charged, it would be a great boon to “Predominantly Voice users” such as the College going youth who can be seen endlessly talking on the streets. Soon other operators also need to make “Voice” free.

As regards the heavy users of Data including those who are shifting to making calls on the data network such as WhatsApp or Skype, the reduction in data charges to half of existing levels at the base level and further down at higher levels will be a boon. For most of us the mobile bill will come down by 50% immediately if we shift to Jio services.

We should therefore welcome the entry of Jio into the mobile services market and hope that consumers will eventually benefit.

The services will be commercially launched from September 5, 2016, which is this year’s “Teacher’s Day”. Just as a “Teacher” shapes the future of a student, it is possible that Reliance Jio may shape the future of Digital India through its service.

We may separately look at the technology issues that may arise on account of the Jio strategy in a separate post.

Naavi

About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
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