When Reliance Jio made its entry in 2016, it created waves, not ripples. Huge tidal ones, caused by its dirt-cheap tariffs. They washed many away, while incumbents like Vodafone India and Idea merged just to stay afloat. When the waters receded, Jio stood tallest, with more subscribers than any of its competitors.
Indeed, in its most recent results—for the quarter ended March 2020—its net profit, year-on-year, almost tripled to Rs 2,331 crore (~$308 million). In the same period, Bharti Airtel, its closest competitor, saw its net loss over 5X—to Rs 5,237 crore (~$693 million) from Rs 1,035 crore (~$136 million) in the preceding three months. This, even as it saw its highest revenue growth in over seven years.
Having conquered the retail telecom space, Jio has now turned its all-conquering gaze to enterprise customers. It wants in on the higher margins involved in providing connectivity to medium and large enterprises, as well as the reseller commissions earned by also bundling video conferencing solutions and cybersecurity applications.
All told, it’s a ~$3 billion market, according to Bharti Airtel’s 2018 investor presentation. This market is split almost evenly—with large enterprises constituting $1.6 billion, while micro, small and medium enterprises (MSMEs) (MSMEs) Micro, small and medium enterprises As per the Government of India, MSMEs are classified based on their investments and turn over. Micro, investment up to Rs 1 crore, and turnover less than Rs 5 crore. Small, investment up to Rs 10 crore and turnover below Rs 50 crore. Medium, investment up to Rs 20 crore and turnover below Rs 100 crore. make up the rest.
Once again, there are those guarding this treasure. The likes of Bharti Airtel and Tata Communications Ltd (TCL), for instance, who have built up their enterprise portfolios over many years, particularly in the large enterprise segment.
Jio, though, has quietly built an army for its planned invasion of the enterprise space. In November 2018, it hired Prateek Pashine, the former head of the enterprise business at Tata Teleservices, to lead this army. Pashine has particular expertise when it comes to cracking the MSME opportunity, having helmed the small and medium business (SMB) teams at both TCL and Tata Teleservices. He knows the MSME space like the back of his hand, multiple executives told The Ken.
Around Pashine, Jio has assembled a team of around 1,000 executives, many poached from rivals Bharti Airtel and TCL. “Even recently, Jio has hired people at leadership positions,” said Ratnesh Mittal, former senior vice president and India head for Vodafone Global Enterprise Vodafone Global Enterprise Enterprise connectivity major A wholly owned subsidiary of UK based Vodafone Group, offering connectivity and IT services to large businesses .