It is widely believed that Reliance Jio Infocomm will do to data what Reliance Infocomm did to voice a decade ago – democratise the product by taking the price points low enough to have mass appeal. The strategy we have outlined above is seemingly elitist, in that the focus is not on the bottom of the affordability ladder but on the top end.
Apart from the absence of a Robust Network combined with Mukesh Ambani’s ego problems to strike a Passive Infrastructure Sharing Deal with Reliance Communications, we believe that the key hindrance for Reliance Jio Infocomm to launch a truly mass-market strategy is the weak device ecosystem and hence high prices. In voice, the company tried to resolve the problem by offering upfront cash subsidy on device costs. However, we believe such a strategy is now unlikely (given historical experience).
The data market is still in its infancy in India, and any new technology gets adopted first by the higher levels of the affordability ladder. So it would make sense to start with the higher end subscribers and then move down as the device price points fall.
In any case, we doubt if a strategy that targets 20 mn customers within three years of launch would be called anything but mass market in any other country in the world (save for China)!