Why Reliance Jio wants to become Super Operator and Super App Provider?

The company is resetting its strategy to become Super Operator and Super App Provider in India and is far ahead vis-a-vis its nearest competitor Bharti Airtel as the focus is on doubling its revenue by 2023.

Having achieved 400 million mobile broadband subscribers in a record time and becoming No. 1 operator in India, Reliance Jio is now resetting its strategy to become a Super Operator and Super App Provider in India by 2023. The company is focusing on a 360 degree approach which is a mix of end to end services be it as an operator, device player, integration player and App/Platform player all combined in one. Not an easy task, as globally no operator has even thought of providing these services presently or even planning in the near future as per information available in the public domain.

In the Indian context, Bharti Airtel, a leading global telecommunications operator with operations in 18 countries across Asia and Africa is also not in Reliance Jio league as it is presently focusing only on operator and App/Platform content services and not focusing on managed services and devices strategy. Even on the App/Platform, its bouquet of services is limited in nature vis-a-vis Reliance Jio. The big question is will Airtel also reset its strategy to give a tough fight to Reliance Jio in the Indian market by focusing on other services or will it just piggy back on the opportunities created by Reliance Jio?

On the operator front, Reliance Jio strategy is to add over half a billion mobile customers, over a billion smart sensors and over 50 million homes and business establishments. On the device front, the focus is on developing low cost 4G and 5G smartphones along with Google both for India and the export market. On the network front, the focus is on providing 5G managed services to global operators worldwide once it is proven in India thus opening a totally new revenue segment for the company. On the App/Platform front, the focus is on financial services, new commerce, education, healthcare, agriculture and others.

To leverage all this, the company is planning to depend on its strategic partnership with Facebook, Google and Microsoft. Also startups and inhouse Jio teams are working on these platforms by providing end to end services in each vertical.

Speaking at 43rd AGM, Mukesh D Ambani, Chairman and Managing Director, Reliance Industries Limited (RIL) said, “In the next three years, I can see a strong parth for Jio to connect over half a billion mobile customers, over a billion smart sensors and over 50 million homes and business establishments.”

On the App/Platform front, the company is planning to replicate WeChat/Tencent model by becoming a Super App provider which connects brands with customers and provide services be it video, music, news, mobile payment, cloud, online games and app store. In majority of these services, WeChat/Tencent is No. 1 or No. 2. The company has exceptionally done well in China and as per the first quarter 2020 results, its revenue was 108 billion RMB (around $15 billion).

Reliance Jio is planning to increase its revenue through App/Platform by leveraging its relationship with strategic investors – Facebook and Google which have invested a total of Rs. 77,311 crore. Focus is also on mentoring/funding startups, partnering startups and also acquiring startups in different verticals so that the company can provide cutting edge technologies to both corporate and end consumers.

The company will also increase its revenue pie through handset sales by partnering with Google for 4G and 5G smartphones and will look at both domestic and international markets. Also focus is on increasing revenue by providing 5G managed services to global operators. On the operator front, the company would like to leverage on Jio fiber, Jio enterprise broadband, broadband for SME and Jio NB-IoT service.

All these activities will definitely increase Super Operator/App Provider Reliance Jio’s revenue by 2x in the next three years from present Rs. 68,462 crore in FY 2019-20 to reach Rs. 120,000 – Rs. 130,000 crore in 2022-2023. If Jio succeeds in this strategy, the company will look further at new revenue streams in future thanks to its partnership with all bigwigs globally – Facebook, Google, Microsoft, Intel and Qualcomm. If it fails, it will have to go back to the drawing board and do the course section as there is no looking back for the company in the years to come.

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