Reliance Jio, the 'Disrupter'

Professor Vasant Sivaraman

Author: Professor Vasant Sivaraman

Date: Sun, 2016-09-04 23:34

The much awaited formal launch date for RelJio’s 4G services has been announced and the media has gone to town about disruption in the telecom service industry. In line with classic strategy, examples like the entry of successful low cost airlines on new routes which provides an opportunity for a ‘short sell’ of the incumbent operators, share prices of the pan India mobile phone service providers have shrunk significantly in recent days. Interestingly enough, the valuation of Reliance has taken a beating as well. There are some shades of the familiar in the story so far. Over a decade back, before the Ambani brothers parted ways in 2005, Reliance had launched its ‘Monsoon Dhamaka’ which shook the telecom industry even then. As a late entrant, Reliance had made waves with the promise of ‘calls at the price of a post card’. Bundled deals and unheard of price packages had exploded demand even then except that over time it ended becoming what some now term as a ‘fringe’ player. Analysts now expect that business to fade away with the emergence of Jio.

Before long, you might expect the Jio to be labelled a blue ocean strategy. However, unless Jio can build huge new markets of ‘non-customers’, the media headlines of disruptive innovation might be a better toolkit to make sense of this phenomenon. The country has a rather high mobile penetration which might suggest that new pockets to win customers might not be much. However the trend of dual (and more) sim holders which accounts for some metros having penetration in excess of 100% might also suggest enough untapped customers, notwithstanding the high national penetration numbers.

It has been reported that the new generation of the Ambani family has been driving Jio which is perhaps good news since the service will then be more likely well aligned with the market of youth. With huge investments in 4G network infrastructure, free voice calls, deep discounted data rates, superior experience with handsets priced well below comparable devices and a three month free service, Jio has truly shaken the industry.

As with most businesses, the incumbents have historically aimed to build relationships with corporate clients and have focused on high spend customers. This makes sense since that is where you might expect margins to be. In serving such segments, companies tend to work on continually improving their offerings, something termed as ‘sustained innovation’. In the world of ‘disruptive innovation’ this has a likelihood of leading to ‘performance overshoot’. Essentially, customers are provided more than what a large section really wants and in the process a significant mass of customers cease to be truly satisfied. The stage is then set for a disrupter who can enter with a low priced offering with some potential performance drawbacks as well. Nevertheless, underserved customers might find this attractive and to the extent incumbents are less interested in that segment, the new entrant can ‘fly under the radar’. Over time, the disrupter can enhance its product performance and soon ‘assault from below’ to take away customers from the incumbents. When such a scenario unfolds, the disrupter inevitably wins.

Switching costs for individuals in mobile services is low, what with the prevalence of dual sim phones and mobile number portability. From that perspective, incumbent operators might have much to worry about in terms of losing high value business. On the flip side, the history of Reliance in telecom or in consumer businesses is not bright. Apprehensions on the quality of interconnect etc also linger. What if RelJio were to get the subscriber numbers but not the revenue? With voice calls to be free, revenues have to flow from data. Back of the envelop computations by analysts suggest that a break even might take at least a couple of years even with a subscriber base of about 100 million.

The retail business of Reliance has been a patient, long haul and RelJio might be similar. While the ‘disrupter’ has made a splash, in order for the incumbents to be rolled over by the tide, RelJio will need its low price to be quickly supported by low cost and by a rapidly expanding market size.

 

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<p>Sir, do you think Jio with its circles covering pan-India will focus primarily on Category B &amp; C areas (Tier II towns, majorly)&nbsp;or will it give equal importance to every market and get whatever it can?</p>

<p>In a manner of speaking, a truly million dollar question (apparently their break even is at 100 million customers). Judging by history and their stated aims they aim for volumes and use that to drive cost. True, they have a pan India rollout that can well support data. By that reasoning the 'underserved' areas you mention become a 'sweet spot'. Nevertheless, the 'data guzzlers' (for now) continue to be metros and this segment will likely find their plans to be attractive...as might be expected they have a phased roll out and hence in terms of geographies the scope would be wide but in terms of usages, e commerce and the like might drive the focus.</p>

A very useful insight on the recent Jio . Reliance is trying to say "Jio aur marne dho"  to other telcos , while the others seem to be on the track "Jio aur Jeene dho ". Welcome to a new age competition , Indian telco style . Although , Reliance tried  something similar when they came out with thier RComm launch . One thing that can be said about Reliance - they dont spare the money , they go for the best and the latest . For example , their control room in RComm Mumbai was the cynosure of all eyes when it opened way back in early 2000 . It was visited by many who had never seen anything like it before in India . The Jamnagar refinery project still remains the best project done in India . In this light the new Jio initiative is reminiscent of the old , with one key difference - it is not blasting a new path . Rather it is piling up the goo in an already much beaten path of trying to set up a cost effective braodband connectivity . Many of the telcos have tried this , trying to have an all India presence with a seamless network at an affordable cost and reasonable quality , but failed . The :Broad " in the "Broadband " is still pretty narrow in India , in terms of speed and capabilities .  Lets hope that this new initiative will throw up something to talk about , as of now it appears to be a marketing roadshow ,without the substance to back it up . In Marketing 101 they say - dont make a promise till you can fulfill it . 

Sir hello.i am searched jio website for event sponsor our government school balakendram it teaches classical dance,drawing,mrudhangam,tailoring& embroidery,sangeetham vocal to govt school children at free or cost.its a art form institute located area suryapet,telangana,state newly formed.india.pl help our children to expose their talent by event.i dont now much of english.sorry for mistakes.my language telugu and also i can speak Hindi very perfect.v have not any budget and v r staff getting salary per month only 3000₹.pl give reply.i am using jio.no cals only net using.its very useful for me and children.irs type of Digi class.i am Tailoring embroidery and craft instructor.v r watching and learning waste material also how use ful site's and waste news paper how ti make useful craft pen stands. weaving baskets.thoranalu.colour paper flowers.flower vase extra.these things are taking place of plastic things.it means in part of swatch bharath to avoid plastic.v r happy using this type of jio.thank u

The title and its content are apt. It covers the area which is very important in our day to day lives. We are all facing problem with internet speed in our homes. Service providers who are giving good speed have huge charges. Hence entry of reliance jio has certainly shaken the foundations of telecom industry. Jio is giving high speed internet at very cheap prices. As rightly pointed out in blog, there is still untapped market because of multiple sim card owned by single person. Almost all of my friends and family members are having more than 1 sim card. This untapped market and 4G speed at low cost can be USP for Reliance Jio success. Due to this disrupter, telecom companies have changed their strategy and forced to roll out cheaper plans. These companies are worried to losing customers to Jio as they know that majority of Indians tend to choose cheaper product despite having less performance. But road to success is very hard for Jio. With stiff competition and interconnect PIO problem, they will have to take drastic actions to achieve profitability. In the long run, customers eventually want quality also else they will leave the telecom operator (Like it happened for Reliance Communication). Hence, Reliance jio should capture market as soon as possible while improving quality of service and cost.

Reliance Industries Ltd unveiled the so called ‘datagiri’ along with a disruptive marketing tactics in classic Reliance style. The market for telecom service providers is oligopolistic where the participants fight for market share and profits on the basis of prices and differentiated products. Reliance Jio owns both. It has segregated its service by setting up a gigantic bandwidth to handle the traffic of mammoth data. And the plans they are offering is at astonishingly cheap rate. Masses are flabbergasted by the announcement of limitless free calling. Jio has an IP network hence all the calls will be directed through internet just like skype calls. And once the vast optical fibre network infrastructure is erected, there isn’t any marginal cost for the company for providing call service. In an oligopolistic market if some player creates such kind of ripple it forces other players to slash the prices. The approach of other player’s in this market is solely dependent on Relaince Jio.

Reliance jio certainly changed the demography of the Indian telecom space. Not only they added multiple folds in user base quickly, but also bring down the cost and make it more affordable. The disruptive pricing structure forced all other service providers to bring down cost and focus on service quality. Jio amazingly positioned the product and even the enrolment process was such a user friendly using the technology through Aadhar based ID and verification. The kind of investment made in the infrastructure they are surely here to stay. I am sure this will contribute to the digitalization mission of the government and eventually the consumer is the winner.

Hello Sir, Thank you for the deep insights! In fact, this article holds true not just for Jio and the telecom sector, but is equally applicable across industry’s. The article throws light on how ‘disruptive’ new entrants penetrate the market and grow on to dethrone the incumbents. Particularly in the case of Jio, with Mr. Mukesh Ambani being the businessman he is, there is lot of curiosity among people to know how this venture would break-even and if it at all it would go on to become one of India’s biggest businesses. We are all aware of the kind of money Reliance Industries has pumped into this venture to ensure nationwide 4G network infrastructure. Reliance has also set the cat amongst the pigeons using their deep pockets to offer free voice calls, deep discounted data rates, superior experience with handsets priced well below comparable devices to capture market share. As suggested by analysts, it seems like Jio is ardently pursuing the 100 million subscriber mark to help them break-even as well as dent the prospects of incumbents. But it is to be seen how long this trend of taking losses to grow market share can continue. It is also to be noted that in the long run, operating costs of Jio could be much lower than competition with Jio only operating in 4G spectrum, pan India spectrum availability and complementary services including Fibre-optic broadband and Wi-Fi services, etc. While existing players operate in 2G, 3G and 4G spectrums which requires them to pay for each, no one has pan India coverage. Faced with adversity with the entry of Jio, already strained telecom players have started consolidating their positions through M&A (Idea and Vodafone merger), as well as trying to match Jio’s pricing in order to sustain their market share and customer base. That brings us to brand loyalty. As seen recently with the taxi aggregators – Ola, Uber etc, e-commerce retail companies – Flipkart, Amazon, Snapdeal – struggling to retain customer loyalty with cut throat pricing in the Indian market - it needs to be seen how much Jio manages to retain its customers once the freebies end.

Modern era is all about ‘disruption’ and this case would make a classic case study on ‘disruption’ of the telecom industry. With the entry of RelJio, Indian telecom industry is at its competitive best. IT development has been disrupting every industry for the past few years, causing a lot of instability, particularly in the telecom sector. The consumers in this industry are highly price sensitive and with its late entry into the market, Jio has had to roll out a business model which would not only lure the customers but also sweep the competition of its feet.  The competition was left stunned by the offerings provided by Jio and had no strategy to counter it. Backed by the funding from Reliance Industries Limited, Jio has deep pockets to push for an extended price war by offering free voice calls and cheap data packs. Nil switching costs to customers, thanks to mobile number portability and prevalence of dual sim phones, have helped Jio to create a huge customer base for itself in a very short time. The amount of disruption caused by Jio is evident from the recent merger of two of its major competitors, Vodafone and Idea, and slashing of rates by Airtel and other competitors. The storm brought by RelJio has even landed itself in a legal tussle with Airtel with the latter accusing Jio of fraudulent practices. We will have to wait and watch to see if history will repeat itself for Reliance since there is a striking similarity in the way they have approached the market second time around. The author rightly questions the ability of RelJio to turn profitable even with a huge customer base of over 100 million. Will Reliance be able to turn its fortune the second time around? That is the question everyone wants to know the answer to.

In this piece penned by Professor Vasant Sivaraman, it is the competitive landscape of the Indian telecommunications industry that is being studied with the entry of a new player; disrupter aka Reliance Jio. The Indian telecom sector has been struggling over the past few years, it has seen a lot of downturn and with the entry of Jio this war is only going to get bloodier. The incumbent players like Airtel, Vodafone etc. have been taken by surprise by the plethora of offers that have been rolled out by Jio and seemed to be struggling to come to terms with a strategy to take them on. Coming from the house of Reliance, Jio has deep pockets and that is very evident in its strategy of offering free calls (local and national) and data (3G/4G). Reliance Jio threw open its doors to the public in the last quarter of 2016 and continued with its offer of free calls and data till March 31st 2017. I agree with Professor Vasant Sivaraman wherein he talks about Reliance’s last foray into the telecom sector not being as successful as they would have liked it to be especially when it’s entry the last time around has stark similarities with the way they have approached the market the second time. Will they be able to turn it around this time? Will they be able to garner enough market share and lower their costs to be able to turn profitable are some of the questions creeping up in a lot of people’s minds. As we approach the latter half of the year, Vodafone and Idea have merged and the other incumbents have gone all out slashing tariffs and trying to bell the storm that Jio has brought with it. Airtel and Jio are locked in a courtroom battle as well, wherein they have accused the other of fraudulent claims and misleading the customers. The coming few quarters will decide which way the pendulum swings and the fate of the old timers versus the ‘Disrupter’. At the end of the day it will be the customers who will stand to benefit whichever way this goes as the providers try new and innovative ways to woo them.

The way Reliance Jio shook up the market, creating a paradigm shift in ultimate consumer benefit and experience, is just exhilarating. Garnering a large number of subscribers in a short span is clearly Jio’s ambition. Increasing the customer base through offers may not necessarily turn into financial gains. Brands will prevail only if service offerings are matched or are better. The cutthroat pricing strategy adopted by the company has boosted its customer base but it will only last if the quality of services rendered are top notch. Rapid increase in customer base also poses technical challenges to the infrastructure. The internet speed which was there previously isn’t there anymore, it has significantly come down with the increasing customer base. Jio has completely disrupted the telecom industry and has forced competitors to merge, Although Vodafone and Idea would want us to believe that the merger deal was driven by the need to create better infrastructure in the age of data, it goes without saying that the exponential growth of the Jio’s 4G subscriber base (which surpassed the 100-million mark) has been sending shockwaves through the industry and has necessitated this consolidation. Airtel also acquired Telenor to synergise its operations and expand its presence in at least 7 circles. The merger has helped Airtel gain 50 million subscribers. The competition in the telecom industry is fierce and every player is preparing for the battle. In order to sustain the growth, Jio will have to play on its strength of technology to improve the quality of service. Reliance Jio should continue to invest in CAPEX to further improve its network coverage which appears a cause of concern to customer at this point of time. I am confident that tomorrow new ideas will come into play, and new tech will emerge - a trifecta of changes that are bound to reshape the telecom industry for a better future. Let’s hope for a better tomorrow!

Reliance is known for its volume power. In what ever product line they have entered they remained on top and managed to get the volume ledership. Starteing form textile, yarn, share market, petroleum product and now in the telecom industry …….. The habit of the group is same and going similer trend for Jio…… It was never expected and thought of by any customer that one can have date free of cost for such a long period….. they tried to create the space in customer’s pocket by offering huge benefits of free voice and date with technological advantages. Created big customer base but unfortunately most of the customers have used Jio as spare weel and they added one more sim card in their mobile. The theory of feeding free data to a customers who really do not need for their life style but made them habituated to see TV, wattsapp, share markets, Musics, Movie and many more. This way they have made type of permanent place in customers mind. With the power of money they compelled competition to think beyond their limits. The result is merger of two major telecom company Idea and Vodaphone. The Indian telecom industry is passing though heavy merger and acquisition reason – Jio. There are always some end to a war but this one is something beyond the imagination of even customers that why they are getting free.. free…free… One thing is sure that Reliance is a great business company and they have entered into this sector not for any social service but to earn and to do business. The style is different and it seems even today that they simply wants others to die and expecting to become king of the market. It is difficult to conclude even at this stage but one thing is sure ( Based on the history of Reliance ) that once they will have enough base and less compititon than they wil be charging very high from all of us. Will collect back all the free date with interest…

On 1st September 2016, when Mr. Mukesh Ambani announced its telecom service Jio with free calls and world’s cheapest data charges, definitely it shook the entire telecom industry and the nation. But whether it is a blessing or curse, that only time will tell. India has always been a country of poor Internet connectivity and data scarcity. Data is mostly expensive for a majority of rural India, and even amongst the urban elite who can afford to purchase 4G data packs, connectivity issues prevent one from taking full advantage of the service. The offer given by Jio appeared to be really nice and within weeks it became the world’s fastest growing network. People stood in queue to take the Jio sim and enjoyed the data and call service despite of having poor connectivity and call drop issues because it is free. The extent of impact from the launch of Jio can be easily visualized by the mega merger happening between the global telecom giant Vodafone and India’s fastest emerging telecom company Idea. The launch definitely created tremors in the entire telecom market eroding the market cap of country’s largest telecom player, Airtel by Rs 12000 crores in a single day. The smaller players were forced either to merge to the giants or to exit. Also it created lot of bad loans in banks for the telecom companies. The vision of the company was clear right from the launch that they are interested in gaining market share and are ready to go any extent. Now the question arises that since they have already reached the magic subscribers figure of 100million, whether they will start charging and if yes, then how many of customers are going to stick with them? In a country like ours where people are ready to try anything if given free but also seems to keep themselves distant once they are asked to pay for. This battle and switching of Indian customer behavior can be easily seen in the example of Ola & Uber where in 2nd tier city where the market is not mature people switch between them whoever charges less. Considering the current scenario where all other rivals offering almost the same plan as Jio it becomes a big question that how much more cash is Mr. Ambani ready to burn.

1) When Reliance Jio launched in the market Airtel, Idea and Vodafone were sitting high and mighty on top of a growing Indian telecom industry. Rumours about Jio’s launch had long been heard in the halls of these large telecoms but details about it and its plans were hard to come by. The launch of Jio kick-started a data price war which would change the face of the Indian telecom industry. The industry had found itself in a similar position in 2009-10, when their was a price war on call rates waging amongst the oligarchs of this industry. They were all trying to capture the growing mobile market in India. The Indian youth was growing, their hunger for using their phone had been growing and companies were bending over backwards and providing calls and messages at unheard rates to get this generation ‘X’ on their network. During these years many networks who could not keep up with these ever reducing rates shut down shop or decreased their presence on the national stage. The industry stabilised and Airtel, Idea and Vodafone were the three giants standing. In a few years mobile internet started becoming very popular and all three of these companies ensured they were one of the first to provide it to their consumers. Because it was difficult to set up the infrastructure required to provide mobile internet these three companies had a distinct advantage over their competitors. They charged consumers approximately Rs 123 to provide 1 GB of data per month. This was more than what most Indians could afford but that was of little bother to these companies who were more than happy when the money was rolling in from Tier 1 cities. Their margins on this were huge. With the economy growing more and more mobile users in Tier 2 & 3 towns started using mobile internet. The cost continued being high so the penetration of mobile internet as compared to the mobile phone is about 33% vs 87% in India. In comes Jio with its offer of providing free unlimited internet for 3 months. And then free internet for another 3 months but with a cap of 1GB/Day (which is more than what most consumers used in a month.) With these offers they changed the way Indians consume mobile data, Jio came in with offers so irresistible that everyone was now using mobile data. People who never saw the reason to use it now could not stay away from it because it was free. Once people were hooked onto the free data Jio knew it was only a matter of time before they are willing to pay for it. But even in making them pay for it Jio offered plans at Rs 11 per GB. This forced the three giants to change their prices and start providing data at a cheaper rate to everyone. This also forced Vodafone to shut down shop in India and sell their stake to Idea. The Indian telecom market is having a second phase of price wars, over data this time. With one of the Oligarchs merging with another and the emergence of a new giant in Jio the Indian telecom market has changed forever; now whether this will benefit the consumer or will these oligarchs find another way of making money is yet to be seen. What is an important point to note though is that while the initial data is offered at Rs 11 per GB according to the data plan if one exceeds their limit they will need to pay Rs 250 per GB on Jio. And that I guess is what capitalism is all about.

Thank you sir for writing this article. The topic is contemporary and includes concepts that we are either learning or may learn eventually. As a student, it was an enriching experience. The telecom industry in India has been dynamic with mergers, acquisitions and occasional disruptions. The advent of Jio has brought about all these aspects back to the industry. Jio’s disruptive pricing strategy has triggered negotiations between Vodafone, Idea and Airtel for a merger. Seldom does any industry witness a massive consolidation of incumbents due to a new entrant. Despite a high mobile penetration in India, internet connectivity at the base of the pyramid has been essentially low. Mr. Ambani has correctly identified this gap in the market and used it to “assault from below”. Bundling is a standard price discrimination strategy which the incumbents failed to use effectively. Jio has not only used it to target untapped customer segments, but also as a marketing tool. Thus, both the product and the marketing were tailored to the target groups. It also benefitted from dual sim phones which helped capture the less price-sensitive segments too. A sufficiently long free-trial period is what motivated many like me to try Jio. The use of Aadhar to ease the process was another feather in Jio’s hat. However, the performance of Jio was disappointing towards the end of the trial period. With a huge customer base, the network slowed down. Jio, playing the ‘victim’ card that the incumbents were intentionally not providing enough inter-connect points to hike call drop rates, did bring about a level of generosity and forgiveness amidst the masses – a phenomenon that several “outsiders” play (such as Donald Trump or Arvind Kejriwal). However, that was no excuse for slow internet and low coverage. This, along with the price-sensitivity of the BOP, led to a low retention rate (30-40%) when Jio rolled out its subscription. Despite this, I continue to keep a Jio sim because of the ease provided by dual-sim phones. I activate the plans if and when my primary sim has issues. Particularly for this reason, the statement “What if RelJio were to get the subscriber numbers but not the revenue?” resonated with me as a deep insight. The article helped me relate our courses of ‘Micro-Economics’ and ‘Decision Analysis using Simulation’ with real-life industry trends. It also helped me know about Red Ocean and Blue Ocean strategies. Understanding the practical relevance of our curriculum further motivates us to try and excel in our academics. It would be interesting to see if the merger of the former front-runners of Indian telecom sector comes through and if it does, what effect it would bear for the industry and for its customers. The recent introduction of “practically free” handsets is another game-changer that will further intensify the competition in the industry. As a customer, these are truly exciting times. However, I am not sure if the telecom companies would agree.

Dear Sir, I take this opportunity to thank you for enlightening all of us with your wonderful views on the disruption of the telecom industry caused by Mukesh Ambani’s Reliance Jio Infocomm. Your writing illustrates years of experience and in-depth insights on the subject. Data has been termed as the oil of the 21st century. Much like his crude oil exploration and refining businesses, Mr. Mukesh Ambani’s Jio Infocomm has emerged as the major disruptor of the telecom industry. Revolutionizing the telecom industry has emerged as the force to reckon with its extended promotional offers, free voice calling and the cheapest data rates in the industry. Riding on its low cost, high efficiency and futuristic technology model, Reliance Jio has changed the rules of the game in the telecom industry. Has tapped the underserved market of lower and lower middle class households by providing them with free internet services over a period of time and change in the habits if usage of data which would subsequently lead to an increase in the Average Revenue Per User (ARPU) from its current levels of Rs 165. Jio 4G also brings about a suite of apps under the Jio Digital Life branding that opens up access to a wide range of services that covers all the aspects of internet usage all under the main app framework-My Jio. These apps are one of the most downloaded apps on the Android app store in a matter of 12 months. In addition of to the low cost, high efficient telecom services, Jio is all set to launch its 1500 INR feature phone in the market which would support Reliance Jio sim cards and can add nearly 50 crore new subscribers in a time span of few years. All this has led to feeling of uncertainty and a potential consolidation in the telecom sector with giants like Vodafone and Idea planning a merger. So how was Jio able to launch a plethora of services under a single brand name and cause ripples in the entire telecom industry? The rise of Jio is nothing but a strong example of the money and muscle power that is prevalent in India. The Jio Infocomm has been backed by 1, 20, 000 crore INR investment largely funded through its petrochemical and other businesses. Even the logo of Jio is the mirror image of the word Oil. The launch of Jio has led to a larger bloodbath in the telecom industry. With its loss leader strategy, similar to what is being played by many major players in sectors like e-commerce and online taxi aggregation will surely lead to the empowerment of common people of India. At the same time it would wipe out the profits of balance sheets of many a large and small sectors, would discourage entrepreneurship and create disgraceful image of Indian bureaucracy in the minds of foreign and domestic investors.

Thank you sir, for such an insightful article. It is actually quite interesting to note how companies are coming up with different and disruptive techniques to make their mark in the market, whether it is by bringing innovative products or developing new avenues for income. It has certainly become a war of being different. Tapping the untapped markets is increasingly becoming the driving force for many companies. What is more interesting is how companies are continuously changing their target markets. Now potential is seen in the lower income households because of the larger share that they form in the economy. It is again worth noticing how a number of start-ups in India focus on providing value to these households at the bottom of the pyramid and in turn earn profits. C K Prahlad in his book entitled “Fortune at the bottom of the pyramid” in 2004 explained the value the bottom of the pyramid holds to turn into avenues for generating profits to any company. In this case of JIO, we see how Reliance is continuously adding value for themselves by creating value for people in the lower income brackets. This is however not new for Reliance. Reliance, as a company, started by building trust in the minds of people from lower income households and gaining their confidence. With Dhirubhai Ambani’s move to collect funds from the bottom of the pyramid proves the point that there is untapped value here which can be used for the betterment of the society.. They readily trusted him with their money and it reaped benefits for them in the future. Reliance disrupted the market then and is disrupting it now using the same fundamentals. However, one could argue if this model is for every company. While most companies try to reduce their costs to be able to tap this market, it is not always possible for companies to bring down prices to a large extent. They then shift their focus from lower income households to growing middle income households, where they see more potential and stable demand. This is why with Reliance’s move the companies in telecom business are looking for ways to maintain their presence in the market. It is difficult for already established businesses to develop newer models to handle this disruption. This perhaps teaches us how important adaptability is for any person or organization in this market. With increasing start-ups focusing on this section of the society, it is probably not a place for all big companies. Identifying the pain points of people here and converting them into socially and economically viable business projects is something that requires creativity and dedication. This can only be provided by those organizations committed to bringing a positive change in the society.

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