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November 26, 2021

Reliance Industries has emerged as a telecom convergence leader

By GlobalData Thematic Research

Reliance Jio, a subsidiary of Reliance Industries, was one of the late entrants into the Indian telecom market but has disrupted the market with its aggressive pricing and strong telecom convergence capabilities. It has challenged its competitors, Bharti Airtel and Vodafone Idea, not only in core connectivity offerings but also in various value-added services. This has forced its rivals to follow similar strategies to stay relevant. 

Reliance Jio disrupted the Indian telecom market in 2016 and maintains its lead

When Reliance Jio entered the Indian telecom market, 4G services were expensive. Its cheap mobile data plans helped it secure a 35% share of mobile subscriptions just four years after launch. Its aggressive data pricing also acted as a catalyst for rapid growth in mobile data by India’s mobile users and led other players to lower their tariffs. This helped to increase smartphone adoption in rural parts of the country, as affordability was a key barrier to ownership. Reliance Jio also launched its fixed broadband service under the JioFiber name in 2020.  

Recently, it launched its own low-priced Android smartphones. These target current phone users in India and aim to offer them a cheap internet device. The company uses these various products to sell its digital offerings. 

Reliance Jio is very strong in the telecom convergence services sector

The conglomerate Reliance Industries has a strong presence in digital media with JioTV (a mobile application for video streaming), JioCinema (an OTT streaming service), and JioSaavn (an online music streaming service). Therefore, the operator Jio heavily benefits from this range of offerings. As Jio merges mobile with data and media, it has emerged as a telecom convergence leader. 

Reliance Jio, for example, offers bundles with mobile-only Netflix for its 4G subscribers. The JioFiber connection bundles multiple OTT applications with subscriptions. Its newly launched smartphones come pre-loaded with apps such as JioCinema, JioSaavn, JioCall (video conferencing app), and JioHealth (mobile health app), among others. Furthermore, the company has pre-loaded its smartphones with third-party social media apps like Facebook and WhatsApp. 

Competitors are closely following Jio in the telecom market

GlobalData places Reliance Industries as a leader in the telecom services scorecard. Its strong telecom convergence offer is one of the key reasons it has beaten its rivals in such a short span of time. No doubt its rivals have been closely following its strategies. Airtel, the closest competitor in both the mobile and fixed telecom spaces, has also invested heavily in digital media and streaming services. It has ventured into TV, OTT, and data subscriptions. 

We expect converged services to be a key differentiator to operators as it acts as both a market differentiator and an additional source of revenue. Telecom operators will find huge opportunities in offering integrated services to their clients as they compete head-on for future 5G services.