#BoycottJio Controversy: No More Than A Storm In A Teacup

On October 9, 2019, I noticed my Twitter timeline was abuzz with a hashtag, #BoycottJio. Until then, I hadn’t heard about the announcement by Reliance Jio to charge users 6 paise per minute for voice calls made to other networks. This didn’t seem like a big deal to me since Interconnect Usage Charges (IUC) is a given and an industry-standard. But the fact that this hashtag was trending meant this announcement had rubbed some folks wrong. The telco that has taken India by storm, is the darling of investors and consumers alike and can be credited to bringing about a revolution in the Indian telecommunications industry, was amid a backlash.
Here’s the announcement that caused all the outcry:

If the furore on Twitter wasn’t enough, the next day witnessed a ton of media reports and near predictions on how Jio is cheating its customers, how this can mean a loss of customer base and a lot more. This pushed me at my wit’s end, and I decided to put this announcement in perspective on Twitter and LinkedIn. Of course, I did this knowing well that I was throwing the cat among the pigeons. But I was ready for a well-meaning debate. Here’s a synopsis of my observations and analysis (read #GreyhoundStandpoint) on this topic:

#1 First Things First, I am surprised that people are surprised with Reliance Jio deciding to charge for calls. Let’s face it, organisations are run with the sole premise of churning profits. Hence, any and every promise they make comes with Terms & Conditions. The economics of FREE isn’t real, and those who expected lifetime free services clearly don’t understand how the world of telco operates.

#2 Jio has rightfully compensated with extra data for the additional charge of 6 paise per minute. The fact is, users love more data! With this in mind and to ensure consumers don’t feel cheated, the company has promised to offer 1 GB of data for every INR 10 spent with them. Let’s put these numbers in perspective – in the years when Jio wasn’t around, consumers have had to pay over INR 300 for the same amount of data.

#3 Jio isn’t charging to put that money in its pocket; instead is charging for IUC that it has subsidised so far and per the regulators’ guidelines. While the jury is still out there on whether the IUC should be abolished or not, the regulator in the meantime has clarified its position on the topic and has stated its concern and doubts on permanently removing this charge by January 1, 2020 (as decided earlier). This has been a trigger for Jio to announce its decision to pass on this charge to the consumer.

#4 What most are missing is that prime focus for Reliance Jio till now has been data and not so much of voice. Albeit a limited set of customers may migrate to other networks, but let’s not expect any significant changes on user base & consumer behaviour cause of this.

#5 What telcos genuinely need to do is to be laser-sharp focused on the next-generation services and go up the value chain. Key is to capitalise on technologies like IoT and build capabilities on its industrial use-case. In addition, telcos must invest in both consumer and enterprise applications cos that can be sold as part of offerings.

Bottom line, to say Jio needs to be boycotted or they have missed on corporate ethics, or the like is over dramatising the entire episode. Such tactics are as old as the world of business and advertising, and it’s us customers who need to be smarter about consuming such claims. Period.


Analyst:

Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.

Have a question on this or other Technology & Innovation topics? Click here to set up an enquiry call with Sanchit Vir Gogia.


Copyright © 2019 Greyhound Research. All rights reserved. You may share this research note using the options made available. Please don’t copy this research note (complete or parts) and distribute over the web and emails. Connect with us if you need clarifications.

Leave a Reply