Airtel vs JIO Airtel ne Jio ko kaise haraya? : Business Case study

Think School Hindi by Zero1

17 Jun 202415:16

Summary

TLDRThe video discusses the evolution of the Indian telecom sector, highlighting Jio's impact on the competitive landscape. It delves into the segmentation of India's video consumption market, categorizing customers into five types: homes without TV access, free TV viewers, TV-first consumers, digital-first consumers, and premium digital users. Jio's business strategy focuses on converting 2G users to 4G, offering affordable data plans, and leveraging sports streaming to attract customers. The discussion also covers Jio's plans to increase revenue by targeting high-value customers, transforming India's digital ecosystem.

Takeaways

📱 The Indian telecom sector has experienced one of its most competitive business wars in the past seven years, primarily due to Jio's entry into the market.
💼 In 2021, Airtel launched airtel.in, and that year, the company made significant profits, marking the beginning of an intense business war in the Indian telecom industry.
🎥 The Indian video consumption market is divided into five main customer segments: households without TV or OTT access, free content consumers, TV-first subscribers, digital-first customers, and purely digital consumers.
📺 India has 45 crore free TV viewers who watch ads in exchange for content, making them a crucial part of the video consumption ecosystem.
🖥️ The most valuable customers are those who consume content exclusively on digital platforms, though they represent only 20 lakh people, indicating a small but highly lucrative market.
📶 Jio's business philosophy emphasizes speed and societal value creation, aiming to capture an invisible market that didn't previously exist.
📊 Despite the rise of smartphones, there are still 25 crore 2G feature phone users in India, a segment that Jio is targeting with affordable data and calling plans.
💰 Jio generates revenue through multiple channels, including free content supported by advertisements, affordable subscription models, and sports streaming, which have gained massive viewership.
🏏 Jio's IPL streaming on JioCinema shattered records, with 147 crore video views during the opening weekend, showcasing the platform's growing dominance in sports content.
💼 Jio's strategy includes cleaning up low-value customers, focusing instead on higher-revenue subscribers, as well as introducing low-cost laptops for broader market penetration.

Q & A

What was the major change in the Indian telecom sector starting in 2021?
-In 2021, Airtel introduced significant changes, including launching airtel.in, and this marked a major turning point in the competitive business landscape of the Indian telecom sector, especially with Jio's entry reshaping the market.
What strategy is Jio using to phase out voice call payments?
-Jio aims to end the era of paying for voice calls by offering affordable data plans and transitioning users to internet-based communication, ushering India into a new telecom era focused on data usage.
What are the five types of video content consumers in India?
-The five types of consumers are: (1) 150 million dark TV homes with no access to TV or OTT, (2) free content consumers who watch ads for content, (3) TV-first customers who pay for TV but not OTT, (4) digital-first customers who pay for at least one OTT service in addition to TV, and (5) digital-only consumers who watch content only on digital platforms and have the highest purchasing power.
How is Jio targeting the 250 million 2G feature phone users in India?
-Jio is offering affordable 4G smartphones and data plans to convert 2G feature phone users into 4G customers, with strategies like pre-installed apps and low-cost monthly data and call packages.
What is Jio's approach to attracting free TV customers?
-Jio targets free TV customers, who primarily use entry-level smartphones, by bundling Jio services with smartphone recharges and offering free access to Jio Cinema for content consumption.
How did Jio Cinema perform during the Indian Premier League (IPL) streaming?
-Jio Cinema reported exceptional performance during IPL streaming, breaking records with 147 crore video views during the opening weekend alone, indicating strong viewer engagement.
What are the differences between low-value and high-value customers in the telecom industry?
-Low-value customers typically generate revenue through low-margin, high-volume business, while high-value customers provide higher margins even with lower volume, leading to more profitable business.
What role does Jio's pricing philosophy play in its success?
-Jio focuses on providing affordable services at the 'bottom of the pyramid,' targeting large untapped markets with low-cost data and smartphones, which has been key to its rapid growth and market capture.
How does the average revenue per user (ARPU) increase as customers move up the value chain in the telecom industry?
-As customers transition from feature phones to smartphones, prepaid to postpaid services, and from standalone services to converged home broadband solutions, their ARPU doubles at each step, contributing to higher overall revenue.
What is Jio's long-term strategy in creating a new market for telecom services?
-Jio aims to create a new market by targeting invisible segments like 2G feature phone users and free TV consumers, offering affordable and innovative services to capture these untapped markets.

Outlines

00:00

📈 Evolution of Indian Telecom Market

Over the past seven years, the Indian telecom sector has undergone intense competition, especially since Jio’s entry into the market. Airtel's strategic moves in 2021, including the creation of airtel.in, set the stage for the largest business battle in the telecom industry's history. Jio has shifted India from the era of paying for voice calls to one where data reigns supreme. To understand this competition, we must first analyze India’s video consumption market, which consists of five types of customers. These range from households with no TV or OTT access to premium users who consume content exclusively on digital platforms. The Indian video market encompasses 300 million customers, and Jio’s business philosophy focuses on scaling and delivering societal value. Jio’s unique approach aims to capture an invisible market by introducing disruptive services like Jio4G and affordable smartphones.

05:01

📱 Jio's Disruptive Data Plans and 2G to 4G Conversion

Jio presents a revolutionary mobile plan, offering 500MB of daily data and unlimited calls for just ₹123 per month, or ₹103 for a yearly subscription. This plan is designed to convert 2G users to 4G by targeting daily wage earners who still use feature phones. Despite advancements, 250 million people in India still rely on 2G phones, with Jio aiming to bring a large portion of these users onto its platform. The strategy includes offering pre-installed Jio services, driving up revenue through subscriptions, and creating a significant financial opportunity for Jio. Jio also monetizes free TV customers by offering value-added services, allowing brands to advertise while customers enjoy free content.

10:17

💻 Revenue Models and Customer Segmentation

Jio’s strategy also involves phasing out low-value customers, focusing on monetizing its services efficiently. India's telecom market consists of 200 million feature phone users, 600 million smartphone users, and 35 million broadband subscribers. As users move up the value chain—from feature phones to smartphones, prepaid to postpaid services, and eventually broadband—their average revenue per user (ARPU) increases. For example, ARPU doubles when transitioning from prepaid to postpaid, and further increases with broadband services. Jio leverages these customer transitions to generate higher revenue, aiming to capture both high-volume, low-margin, and low-volume, high-margin segments.

Mindmap

Keywords

💡Indian Telecom Sector

The Indian Telecom Sector refers to the industry responsible for providing telecommunication services in India, such as mobile and internet services. The video highlights the intense competition in this sector, particularly with the entry of Jio, which disrupted the market by offering affordable services. This competitive environment has shaped the pricing strategies and market dynamics over the last several years.

💡Jio

Jio is a telecom service provider owned by Reliance Industries that revolutionized the Indian telecom industry by offering affordable data and voice services. Its aggressive pricing and wide accessibility played a key role in reshaping consumer expectations and forcing competitors like Airtel to adjust their offerings. In the video, Jio's strategy of catering to different customer segments is emphasized, including its push to transition 2G users to 4G services.

💡Business War

The 'Business War' refers to the intense competition in the Indian telecom market, particularly following the arrival of Jio. This competition has led to significant changes in pricing models, service offerings, and customer acquisition strategies. The video describes this as one of the most competitive phases in the telecom sector's history, with companies vying to attract different types of customers.

💡Voice Calls Ending

The phrase 'Voice Calls Ending' highlights a shift in the telecom industry where the traditional model of charging for voice calls is becoming obsolete. With the rise of data-driven services, telecom providers like Jio have focused on offering unlimited voice calls as part of affordable data packages, signaling a move towards data-centric business models.

💡Customer Segments

The video outlines five distinct customer segments in the Indian telecom and content market: 'Dark TV Homes', 'Free Consumers', 'TV-First Consumers', 'Digital-First Consumers', and 'Digital-Only Consumers'. These segments are defined by their consumption habits, such as whether they pay for TV or OTT services, and are used to illustrate how companies like Jio target their offerings to maximize revenue and market penetration.

💡Digital-Only Consumers

Digital-Only Consumers are the most valuable segment in the video’s analysis, consisting of users who consume content exclusively through digital platforms and rarely, if ever, use cable or DTH services. Although this group represents a small portion of the market, they are described as having the highest disposable income and contribute significantly to the revenue of companies like Jio, as they pay for multiple OTT services.

💡Fortune at the Bottom of the Pyramid

This concept, popularized by the economist C.K. Prahalad, refers to the strategy of targeting low-income consumers in emerging markets to create both business value and societal impact. In the context of the video, Jio adopts this philosophy by aiming to provide affordable telecom services to millions of Indians, many of whom were previously underserved or using 2G networks. Jio’s goal is to convert these low-income users into 4G customers through affordable pricing models.

💡2G to 4G Conversion

2G to 4G Conversion refers to the effort by telecom providers, especially Jio, to move users from older 2G technology to more modern 4G networks. The video emphasizes that there are still millions of people in India using 2G feature phones, and Jio’s business strategy focuses on converting them to 4G through affordable smartphones and data plans, thereby expanding their user base and increasing revenue.

💡ARPU (Average Revenue Per User)

ARPU, or Average Revenue Per User, is a key performance metric in the telecom industry that measures the revenue generated per user. The video explains how Jio and other telecom companies seek to increase ARPU by moving customers from lower-revenue segments, like feature phones or free services, to higher-revenue ones, such as smartphones and broadband connections. The ARPU rises significantly as customers adopt more advanced services.

💡OTT (Over-the-Top) Services

OTT Services refer to content delivered via the internet, bypassing traditional distribution methods like cable or satellite TV. In the video, OTT services are discussed in relation to customer segments, with Jio offering bundled subscriptions to these services along with telecom plans. The importance of OTT services in driving consumer demand for digital content and increasing telecom ARPU is highlighted.

Highlights

The Indian telecom sector has seen its most competitive business wars over the past 7 years, largely driven by the entry of Jio.

In 2021, Airtel achieved a remarkable milestone by generating significant profits, marking a turning point in the competitive landscape of the telecom industry.

Jio introduced a new era for Indian consumers by ending the tradition of paying for voice calls, further revolutionizing the telecom market.

India's video consumption market consists of five major customer segments, including 150 million 'dark TV' homes, where access to TV or OTT content is limited.

Around 450 million Indian customers are free consumers who watch content through ads, with YouTube serving as a prime example of this model.

The 'TV first' customer segment, totaling 77 million users, pays for TV but not OTT, often receiving OTT subscriptions bundled with their mobile plans.

There are 43 million 'digital first' users who pay for both TV and at least one OTT service, making them valuable consumers in the digital space.

The most valuable segment includes 2 million 'digital only' consumers who access content exclusively on digital platforms, making them high-revenue customers.

Jio’s business philosophy emphasizes creating a market for the 'invisible' bottom of the pyramid, capturing untapped potential within underserved segments.

Jio has significantly tapped into the feature phone market, with 250 million 2G users in India, and aims to convert many of these to 4G through affordable smartphones.

Jio's strategy includes offering affordable plans such as ₹123 per month for unlimited calls and data, attracting low-income users into the 4G ecosystem.

Jio's monetization strategy leverages free TV consumers by offering low-cost recharges and providing ad-based content on platforms like Jio Cinema.

Jio made a significant impact in sports streaming, particularly with the Indian Premier League (IPL), breaking viewership records with 147 crore video views in the opening weekend.

The IPL viewership on Jio platforms saw over 400 million concurrent viewers, more than the entire population of the US, demonstrating the immense scale of its operations.

Jio’s business model effectively segments customers by value, with high-revenue opportunities in converting feature phone users to smartphones and bundling services.