On 10 September, Reliance Jio’s conquest of the Indian telecom space was meant to enter its endgame. The company, in partnership with Google, was to launch the JioPhone Next—a 4G smartphone that’s easy on the wallet whilst capable of handling the full suite of offerings from both Google and Jio.
The plan was to nudge users to abandon 2G mobile services in favour of Jio’s 4G-only network by bundling data plans with the JioPhone Next. Not only would this swell the company’s user base, but it would also increase the total addressable market for Reliance’s various other digital businesses, such as e-grocery service JioMart or fashion portal Ajio.
Coming as it was, in the immediate aftermath of rival Vi’s latest brush with death, the launch could have been the latest nail in Vi’s increasingly well-fastened casket. It would have also posed a threat to its closest competitor Bharti Airtel. Unlike Jio, both telcos have considerable 2G user bases.
On the morning of the JioPhone Next’s launch, however, it was announced that the device would only see the light of day by the next festive season—roughly two months away. A joint statement from Jio and Google hinted that incomplete testing efforts and the global semiconductor shortage were to blame.
Sources close to the company told The Ken that Jio faced severe inventory shortages, meaning the company would be able to manufacture less than 100,000 devices. This would make it impossible to produce even half of the company’s target of 50 million devices in the following six months.
The inventory crunch, though, was only one of many problems. Sources said there were also issues with the placement and positioning of Jio apps on the device, and challenges with creating Indian language interfaces.
To say this delay is inopportune for Jio is an understatement. Already the top telco in the country with some 415 million subscribers, Jio had set itself a target of 500 million users and 50% market share by revenue. However, Jio has found the final leg of its journey the most difficult to navigate.
The rate of users switching to Jio’s network has slowed slowed The Ken Reliance Jio’s 500 million-user albatross Read more dramatically. In the year ended March 2020, Jio added an average of 20 million subscribers each quarter. The following year, this dropped to 7 million— a 65% decline. Over the same period, the JioPhone’s contribution to the telco’s user base slowed from 50% of new subscribers to just 20%, according to a February note by analysts at Goldman Sachs.
