3 reasons why Mukesh Ambani’s Reliance Jio plans are a little too ambitious for his own good
If it’s Reliance, it’s got to be big, has been the long standing norm when it came to India’s largest private company’s business aspirations. Be it its prized and now trouble-hit petrochemical business or the overtly ambitious retail plans. However, we at Business Insider feel a closer fact check is in order this time around; simply because Ambani has possessed the 4G fully paid up license for 5 years now, and roll-out of the commercial operations, after much delay, has now been slated for the end of the calender year 2015.
So, what are Mukesh Ambani’s chances of success with Jio? Will this turn out to be the hiccup that his retail plans turned into. Remember, the time when Mukesh Ambani earmarked Rs 25,000 crore for retail, and then we all know what happened to Reliance Fresh (the flagship retail format) along with other smaller tie-ups he had entered into to expand his retail footprint.
1) For one, the biggest and the most fundamental hurdle is that Jio is a 4G-based service. Mukesh Ambani’s dreams of lightning-speed data transfer might have to wait just a bit; the delay over the past few years in its 4G services roll-out have not been without reason. As
2) Then there is the very essential reason and the very basis of any business-demand. Reliance needs to source consumers for its 4G services. The target audience will have to be people who already use data on a regular basis, and in a market like India, data-consuming clientele is a very small minority yet. As telecom expert Uppal explains, “ The question is will people be willing to pay the premium for 4G services? Empirical data suggests that currently 4G data demand isn’t on an uptake.” In fact, this would depend on many an external factors including smartphone penetration into the rural markets as well as ensuring that cost-effectiveness of the 4G services.
3) Last, but as they say, not the least is the question of unhindered service. And as we, the country folks know by now, Reliance isn’t the most service-friendly company to enter the ‘services sector’. As Uppal puts it, “Reliance has yet to prove itself decisively in the ‘services' segment.”
What we can say with a great degree of confidence, however, is that Reliance has very, very, deep pockets. And, a company with such resources can never go kaput, but they may never reach market leadership status as has been exemplified by its retail venture.
Popular on BI
- How COVID damages heart found, may lead to new treatments
- Seven assembly bypolls in six states on Nov 3: EC
- iPad's Apple SIM can no longer be used to activate cellular plans
- Millions of Indian smartphone users might have to wait till 2024 for 5G say experts
- Consuming refined grains is as bad as a diet with unhealthy sugars, oils says new study
- Tata Tiago Electric Car
- HCL Tech
- World Heart Day 2022
- Apple Tablets in Amazon Sale
- RBI Repo Rate
- Akash Ambani
- Amazon festival Sale
- Upcoming new Mobile in October
- Amazon Festival Sale
- Best Companies for Work
- India's Richest People
- RBI Interest Rate hike
- Upcoming Smartphone in 2022
- Top 10 Colleges in India
- Top 10 Airlines in World