Jio’s gamble: Leveraging content, infrastructure to win India

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Looking at our list of fastest-growing apps in 2016, the inclusion of Jio’s apps in the top 10 indicates a notable change in India.

Jio, a subsidiary of Reliance Industries and the newest player in the Indian telecoms market, saw two apps included in the year’s global list: JioMusic and AJIO (an online shopping app). This is just one of the few remarkable turns in the six months since the mobile phone network launched. What makes it remarkable is the apps were not created by an app development team but a network provider venturing into the app space for the first time.

What’s important to understand is how Jio was able to get two apps in the global list. Apparently, all of its apps are pre-installed on a device through its sim cards, which they started selling in September 2016 in India with a highly competitive and market-disrupting pricing model, giving users no choice to opt out of the apps. Reliance is hoping that this strategy will lead them to strong DAU figures, but it’s not quite as simple as that.

Let’s discuss.

Jio: What’s the fuss all about?

The 28-day packages offered by Jio are incredibly competitive, ranging from US$0.27 to US$73.40, all with free local and national calls, generous SMS allowances, and the lowest data costs to date in the Indian market. For the first six months of Jio’s operation, users received free 4G services. The company has extended the offer to attract more customers. The long lines outside its stores in India after its launch were testament to the appeal of the offer.

Reliance Industries’ investment in infrastructure is revolutionary for India. The company has installed over 92,000 telecoms towers across the country. Even more revolutionary is using this infrastructure to distribute and deliver their content for free and charge for it later once users are comfortable and, perhaps, even reliant on it. Jio’s arguably aggressive pricing has forced other Indian players to follow suit with price drops and incentives, giving more Indians access to data and smartphone content more than ever before and jump-starting mobile adoption nationally.

A content ecosystem play

A Jio customer paying for a prepaid or postpaid sim package also receives free subscriptions to the network’s apps worth US$18.35 a month until 2018. This package includes 13 automatically downloaded apps and a wide array of digital content.

The network is clearly pursuing an aggressive content strategy in an attempt to create additional streams of revenue beyond just providing data and network access. Their competition is stiff from not only existing apps in the market but also other carriers that offer content.

From music streaming (Airtel’s WYNK, Vodafone Music, Saavn, and Gaana), TV (YuppTV, Hotstar, Netflix, and 17 other digital TV platforms), to digital wallets (Vodafone’s m-pesa, Airtel Money, Mobikwik, and Paytm), Jio faces a tough challenge in differentiating their apps in a saturated market.

The competitive strategy

The magic of Jio’s offering lies in how the company has built a complete ecosystem for their users. The app bundle makes the payment for the apps simple for users who pay every 28 days.

Jio aims to meet almost all of a user’s app needs. It is careful to make sure that there is minimum friction in switching between its apps. Users can easily use the apps without having to re-login, and the JioMoney Wallet app is integrated throughout.

 Even if other networks match the range of content, or even have content apps that users prefer, they may not be able to provide the data or data capacities that Indian customers are craving for.

Much like the Google or Apple ecosystems (or within Tencent’s WeChat), for example, users may find that as more functionality gets centralized in Jio-developed apps, it’s easier to stay within the Jio world as they look for new apps to install and use.

Dormant or active users?

Global telco trends

Conclusion