Reliance Jio was supposed to usher in Digital revolution in India. It has succeeded in forcing its competitors to improve their quality of services (QOS). However, its own QOS has deteriorated drastically in last three months, since it launched its services.
So, no one was surprised when MukeshAmbani announced that Jio will offer free services till March, 2016.
In his announcement, last week, Ambani applied basic management rule of 80/20 in justifying his decision to extend free service offer and in explaining the reason for poor data services. The 80/20 rule (Pareto principle) states that for many events, roughly 80 per cent of the effects come from 20 pe cent of the causes.
Ambani said: “…We have noticed that 80 per cent of Jio users consume less than 1 GB of data daily. 1 GB per day is still a substantial amount of data. In fact, it is 30 times the average usage on other networks!”
“But, the other 20 per cent of users consume disproportionately higher amounts of data, and we have observed that this disproportionate usage contributes significantly to the congestion that I mentioned earlier. In short, 20 per cent of the users create a poor experience for the other 80 per cent.”
In its new free offer Jio has capped data usage to 1GB per day, after which speed will be reduced to 128 kbps per day.
Reliance Jio’s top management is slightly late in realising 80/20 rule. My observation is that the same rule would apply to the subscribers also. Generally, in a telecom service company 20 per cent of the subscribers generate 80 per cent of the revenue.
These 20 per cent subscribers were fed up with poor quality of services of the incumbent operators. Many were waiting for Jio to launch services and were eager to shift to Jio. Many subscribed to Jioservices as second phone. However, most of them had bad experience with Jio in last couple of months.
These customers had potential to contribute 80 per cent of the revenue. They have stopped using Reliance Jio services. They are not even carrying it as their second phone.
Unlike voice services, Jio can’t blame Airtel, Vodafone and Idea for poor data services. So, it blamed subscribers for it, which is not fair. First you invite subscribers to experience high data services and then claim that the high usage subscribers are responsible for poor services.
I have always said that Jio could be a strong player only if it offers good quality of services. It would not matter whether its services were free or not. Accumulating a large subscriber base is not the only important thing. All operators including Government-owned BSNl have roped in large number of subscribers in last three months. It is important to offer good quality of services, which Jio is lacking.