4 Reasons: Jio remains a Telco.

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Reliance, parent of Jio has delivered world-class and world’s most economical, $0.26 per gigabyte (GB) priced 4G VoLTE service in India. Jio deserves credit for executing the herculean task of laying telecommunications hardware across India for catalyzing India’s ongoing information technology revolution.

Coinciding with the dawn of COVID in India, since March 2020, Jio has raked in billions of dollars in private equity from all corners of the globe. Media is awash with stories of how JIO’s consumer internet play is imminent and it will gobble up wide swaths of Indian consumer’s digital mind-and-wallet share, from eCommerce to video conferencing, to super apps to everything.

One of the world’s most respected, long-time consumer technology analyst succinctly sums up JIO’s end game.

Once a Telco, Always a Telco. Is Jio different?

The four most dangerous words in investing are, 'This time is ...

Let me explain,

1. Jio’s core competency: Capital & License

Large capital and Regulatory permissions, these are two ingredients which Jio and its parent Reliance have historically leveraged to succeed in any industry, be it Oil or Telecommunications. If any of these two ingredients are missing, Reliance has no clear track record of success and leadership, check their product portfolio, and try identifying any consumer winners? There was Vimal suitings, which they sold.

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The consumer software industry requires neither capital nor licenses. Apple, Google, Amazon all started with tiny seed capital in former motor garages. Capital followed consumer traction.

Reliance has the capital, why not build an e-commerce company, cab-hailing, food delivery, etc. Think about it, why is Reliance-Jio unable to produce any clear leader in any consumer software domain?

Startups happen despite the government and licenses, and not because of the government.

2. Culture eats strategy for breakfast

Starting a consumer technology application is easy, winning is difficult. Culture is the competitive advantage that has enabled the success of technology companies, both domestically, and globally.

Culture starts with the values and working style of the founders and immediately percolates organization-wide across communication, organization structure, team collaboration, innovation, attracting-retaining, and rewarding a diverse talent pool, extreme customer obsessiveness, and finally, treating ecosystem partners fairly.

If the culture ain’t aligned right, the business mission of consumer technology companies is rarely achieved.

Parent Reliance has a stellar track record of executing large projects requiring capital and license.

Culture is set early and is hard to change.

Has Jio set the right culture?

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3. Net Neutrality (Read: Telco cannot decide for users)

India is a Net Neutral nation and the telco cannot decide what the users consume.

Jio’s consumer applications – JioMeet, JioMart, Jio-Saavn, Ajio, Jio News, etc, will need to compete for both, the consumer’s mind and wallet share in an open and free market, with both nimbler garage startups as well as established consumer technology giants.

India’s Telecom and Regulatory Authority of India prohibits Telecom Service Providers from violating the three basic tenets of net neutrality:

  1. All websites or applications should be treated equally by the Telco’s

  2. All applications should be allowed to be accessed at the same internet speed

  3. All applications should be accessible for the same cost

4. Overreading – Jio’s investor & partnerships calculus

Jio has either stitched business partnerships and/or is attracting financial investments from FAANG. Facebook, Google, Amazon are investing in 2020. Apple is a Jio partner since 2016. JioTV+ has recently partnered with Netflix.

These are minority financial investments and regular business partnerships by five ferociously competing globally technology companies.

All 5 of these companies have their well-charted, individual, India paths.

The market analysts are overreading and have overnight transformed a Telco into a “FAANG” investment thesis, a little bit of everything.

Questions to analysts

  1. Are we expecting Jio to build a Facebook, Apple, Amazon, Netflix, and Google?

  2. Will FAANG companies only serve Jio customers & not Airtel, Vodafone?

  3. Will Jio compete with FAANG?

  4. Can Jio transition from an entitlement DNA to one of consumer obsessiveness?

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I think Jio has its own clearly charted path, that of a great Telco, nothing more, nothing less.


I write on India internet, my previously published essays, simultaneously posted in BusinessWorld(BW) and Rediff (R), some of them are:

  1. The USD 30 Billion Sale-&-Leaseback of India’s Internet Economy 🔥 (BW) (R)

  2. Securing India’s Internet Economy 🔥

  3. 2 Koh-i-Noor’s, Different Era’s, Same Story 🔥🔥

  4. The Tata Nano moment for India’s Neo Banks🔥🔥🔥(BW)

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Vibhu Arya

Vibhu Arya

Vibhu has previously worked in India, Middle East, South East Asia, and China across banking, e-commerce, fintech, varied payment types, remittances, and blockchain.
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