How Working with Competitors Made Jio a Telecom Giant
Jio Platforms’ unique experiment of co-opetition with global tech giants combined with its local prowess allows it to address an enormous market of price-sensitive customers. Thanks to its sheer scale, innovation, and unique collaborations, it can offer integrated solutions for retail, grocery, fintech, medical, agricultural, e-commerce, and e-payment needs, in addition to telecom services and home entertainment — at affordable prices. The resulting knowledge, access, business possibilities, and even entertainment opportunities could transform the lives of over one billion people in India. In this article, the authors unpack why Jio has been so successful and what lessons we can learn from its evolution.
More than a traditional telecom business, India’s Jio Platforms is proving to be a disruptor. Jio was launched as a “freemium” service, offering free internet services to price-sensitive Indian customers to increase the adoption rate and scale up the market. Previously, Indian customers, whose average income is about $150 per month, had never had access to such a high-speed internet — bundled with so many apps and digital solutions — at such low prices.
Soon after its launch, Jio Platforms managed to capture over 426 million subscribers to become the top telecom operator in India. It now ranks as the third-largest telecom network in the world by subscription numbers. It attracted investments and technological partnerships from tech giants such as Intel, Qualcomm, Meta (Facebook), and Google, creating a unique model of co-opetition — cooperation among competitors. Why has Jio been so successful, and what lessons can we learn from its evolution?
It adds innovative value to the telecom ecosystem.
In a previous HBR article, we described how Zomato, a food delivery company, could transform a whole industry by leveraging existing technologies. Similarly, Jio didn’t invent any new technology. Instead, it created a blend of high-speed internet connection and a comprehensive ecosystem of digital technologies that were previously unavailable to most customers in India. It epitomizes a modern technological disruptor that creates unique value for a segment of extremely price-sensitive customers.
Jio offers 4G telecom services and a network of apps at about $15 per month. An affordable solution, tailormade for the Indian market on a massive scale, could potentially improve the daily lives of the average person, most of whom don’t have access to a computer. Jio can offer them improved access to banks, commerce, suppliers, and merchants. A micro-entrepreneur can improve coordination among employees and supply chain partners while connecting with other micro-entrepreneurs and customers on JioMart, the company’s retail network. The resulting network, improved coordination, and seamless information transfer among parties can reduce inefficiencies, wastage, and exploitation that often results from a lack of knowledge and communications in less-developed areas. Those improvements can also create what economists call a “producer and consumer surplus,” which has value for the whole society.
This unparalleled scaling also presents a great business opportunity. Jio Platforms has raised $20 billion from digital giants like Google and Meta (Facebook) and leading technology innovators like Qualcomm and Intel. These giants, in turn, provide their services using Jio Platforms at prices suitable for the mass market in India. This gives Jio Platforms a total equity valuation of $72 billion, which is rumored to have increased to about $110 billion.
It leverages a partner ecosystem.
Jio’s chairman, Mukesh Ambani, believes “data is the new oil.” Securing, managing, and sharing data are key to creating the network effects of the telecom sector. Each new engagement with a customer not only improves revenues, but it also leads to additional data, enhancing the momentum of the “data flywheel.” Jio Platforms, having already secured over 426 million customers, keeps adding services to enhance its touch points by leveraging its ecosystem of partners.
Jio Platform’s diverse partnerships provide entertainment, payment, health, communication, and e-commerce apps. For example, Jio has partnerships with online content streaming platforms like Netflix, Amazon, Disney+ Hot Star, and Sony, bringing consumers entertainment content that wasn’t available previously, in a single platform and at affordable prices. JioMoney inserts itself between customers, banks, MasterCard and Visa cards, and merchants for all payments, improving micro credit availability and reducing costs in the financial system. Additionally, Jio enables other players, such as car manufacturers, to connect to customers through customized apps.
It engages in co-opetition.
Jio Platforms is an example of co-opetition, where seemingly rival companies collaborate on common goals. Tech titans seek partnership with Jio due to its futuristic technologies (4G now, but 5G in the near future) and unique ecosystem. Jio’s fiber optic-based cable network can facilitate Microsoft’s Xcloud cloud-based gaming console; Google offerings, including YouTube and Google Maps; and Facebook’s WhatsApp Pay — and reach a billion people in India.
A partnership with Microsoft promises to bring cloud technology and infrastructure to millions of micro, small, and medium-sized businesses in India while establishing cloud data centers to cater to their needs. Integration with WhatsApp Pay can provide digitally enabled connectivity between merchants and customers. While Jio’s basic 4G handsets are priced at $20 for the ultra-price-sensitive segment, Google’s partnership has enabled building a next-generation smartphone for Indian consumers. Priced around $90, it comes with Android OS and other preloaded Google apps and can read and voice assist in 10 Indian languages. Partnerships with Intel and Qualcomm aim to enable the development, launch, and expansion of 5G services.
Such partnerships involving global leaders are often complementary and synergistic but can also be challenging to manage. For example, there’s the question of how revenues from payment systems will be divided among the players, all of which want a share of the pie.
It provides a unique digital experience through intermediation.
With its reach and technological capabilities, Jio Platforms can encourage new-age entrepreneurs to create solutions for the masses and sell them via Jio Stores. Many such apps have already been launched. JioHealthHub, for example, can enable people to access quality healthcare and online consultations, while hospitals can use it to offer outpatient and home quarantine services during emergencies and securely store medical records. Embibe is an AI-based EdTech platform for interactive learning, used in partnership with local governments to launch in schools. JioMeet is a cost-effective and secure platform for conferencing and meeting, and JioGlass is connecting teachers and students through 3D virtual classrooms and holographic images. Music streaming app JioSaavn provides music in partnership with Sony Music, T-Series, Tips, YRF, Saregama, Eros, and Warner Music. JioGames encourages developers to make games and distribute them over Jio Platforms. JioDevelopers provides a software kit and infrastructure to develop and build apps.
Jio Platforms’ unique experiment of co-opetition with global tech giants combined with its local prowess allows it to address an enormous market of price-sensitive customers. Thanks to its sheer scale, innovation, and unique collaborations, it can offer integrated solutions for retail, grocery, fintech, medical, agricultural, e-commerce, and e-payment needs, in addition to telecom services and home entertainment — at affordable prices. The resulting knowledge, access, business possibilities, and even entertainment opportunities could transform the lives of over one billion people.