There is no denying the fact that Reliance Jio has completely changed the telecom market by offering unlimited free calling and data services at a very low rate in comparison to the other market players. In fact, for the first six months, Jio provided services to its customers for free and it definitely helped a lot in gaining customer base in less time.
However, the other market players are not so happy about it and just recently, the chairman of Airtel, Sunil Bharti Mittal, blamed Reliance Jio for the existing problems faced by the telecom industry.
Jio, the subsidiary of Reliance Industries, was launched in market in September 2016 and it ate up the income and profit of existing telecom players of that time, i.e., Airtel, Vodafone and Idea, by offering free voice and data services for the first six months and now it has started charging for data services but voice services are given free for life. The other market players were forced to cut down their plans in order to compete and retain their customers.
Sunil Mittal blamed the free offers provided by Jio as the main reason because of which the telecom companies had to write-off investments worth $50 billion. He also said that Jio was also against the relief package for the sector which is already burdened with debt.
The chairman of Reliance Industries, Mukesh Ambani, responded to this allegation and said, “there’s no need to cry so much” and a businessman should always be ready to face setbacks.
He said, “For all people in the industry, I suppose earnings and losses are the risks that we take. I don’t assume we can rely upon, governments and regulators to assure our profits and losses.”
“To me, what’s most vital is did we move the country ahead and does the citizens gain.” Ambani said. “The query…you ought to be thinking about is even if there are income and losses, who gains and who loses.” He simply put his stress on the fact that if the country is transferring ahead and the consumer is gaining then it is really worth taking those losses. “A number of us are big players, we can afford it,” he added.
When Ambani was asked when Jio will achieve break-even, he said, “I don’t want to predict, but I think we are ahead of our schedule in terms of the returns that we are generating. Jio results are declared every quarter now. You can see the trend. You watch the next few quarters. You will learn in January and you will learn in March.”
Asked if competition motivates him, Ambani said, “Our DNA is that we are very focussed. We always believe in the principle of saying that if you focus on the goal, you will overcome all obstacles. If you focus on the obstacles, you will never achieve your goal.”
“At Reliance, we want to be the best in the world,” he asserted. “I am sorry if it appears competitive.”