What can startups learn from Reliance Jio’s aggressive pricing strategy?
Start up can learn from this strategy is that first make the foundation strong and do all your home work correctly before going for price war.
Reliance is always best in Marketing. Pricing strategy works in mass market always. But the some facts are as –
The firm has pan-India spectrum in the 2,300 MHz band, Incumbent telcos currently offer voice on 800 MHz, 900 MHz, 1,800 MHz and 2,100 MHz. However, spectrum in this frequency is not efficient for voice, which still accounts for 77 per cent of revenues of the telecom sector. So even as data is the future, voice offerings will be critical for Jio to capture critical market-share.
Reliance Industries has invested $14 billion in its telecom venture so far and voice still accounts for three-fourths of the telecom sector’s revenues. the voice quality on LTE might not be as good as other telecom operators that offer voice on 2G.
The majority of data subscribers use plans ranging from 500MB to 1.5GB, with the flagship plan being the 1GB plan. I also prefer 1 GB plan and still after 28 days chunk of data left unused always.
India’s telecom data market to grow to $16 billion by 2020 from $4 billion in calendar 2015. The company aims to have 100 million subscribers in the shortest time. According to Morgan Stanley, Jio could have 40 million subscribers in the next fiscal and also have $2 billion in revenues. They also expect an overall revenue market share of 6 percent with 2 percent in voice and 19 percent in data. But looking at the data plan and enthusiasm in the public, the target of 100 million users doesn’t seem to be far off.
Youth is being targeted as they are crazy for web and internet and carry mobiles 24×7.
Reliance deliberately skipping voice as this will be issue in voice quality but they have to generate revenue; hence played wild trump card of data. Its the time to wait and watch for voice quality before jumping on any conclusion.