Mukesh Ambani’s army of expats at Jio
Over the past six years, Reliance Industries has hired many expats to innovate and differentiate at the world’s fastest-growing telco
- RBI against independent regulator for payment systems outside central bank
- Germany’s transport authority orders Opel to recall 73,000 diesel vehicles worldwide
- RBI opens banking tap to ease liquidity crunch at NBFCs
- New RBI norms put mobile wallets on par with payments banks
- Imminent NBFC slowdown could lead to credit crunch
Ask any Reliance Jio insider and you will be told Building TC-22 at the Jio headquarters in Navi Mumbai is where the action is. On the seventh floor is Mukesh Ambani’s desk— four feet wide, bare and with a telephone on it—one among 200 other workstations on the floor.
“MDA spends a couple of hours every Wednesday here,” says a Jio executive. MDA is Mukesh Dhirubhai Ambani, India’s richest man and the chairman of the Reliance Industries group of companies. “I personally thought that this wouldn’t work for long. But it has. There is no hierarchy and it is a totally flat organization, very different from the refinery business,” says the executive.
Why the open-plan office, especially for Ambani who spent most of his career in offices where business was conducted behind closed doors? “To retain talent,” says a second person, a senior Reliance Industries executive. “As MDA often says, we are a start-up. We have to behave like one.”
Jio started operations just about 16 months ago. It sees itself in the digital business, not as a telco. Most of its people are in their 20s and 30s. And, its staff—with an unusual proportion of foreigners—are pushed to disrupt every aspect of a telco’s operations: the network, building security systems, devices, branding, consumer behaviour, etc.
This is the story of those expats and how they changed Jio’s fortunes and the Indian telecom business. Most of them were personally hired by Ambani and his lieutenants signing on the talent from across industries and the globe in the last seven years.
The second person cited earlier confirms that as much as 15% of the 20,000 people working at the Jio Navi Mumbai campus are expats—many of them in key roles. For the two months that FactorDaily worked on this story, Jio turned down its requests for meetings with any of its expats and attempts to contact them individually were mostly unsuccessful.
First, a quick list of the senior expats. Jio’s chief product and innovation officer is former Deutsche Telekom executive Rainer Deutschmann. Networks is headed by ex-Sprint chief technology officer Mathew Oommen, an American with Indian roots. Stratos Davlos, hired from Apple, heads platform and engineering and was instrumental in developing the Hello Jio voice assistant. Jordanian Tareq Amin leads tech development and automation. Caroline Seifert was its chief brand and design officer for a year. Janina Anjuli Schmidt worked closely with Seifert and now leads design. Chinese Shuming Li looks after all of Jio’s wifi rollouts. Marcus Brackebusch was one of the brains behind platforms and systems (Jan 2015 to May 2017). And Nikola Sucevic, a Swedish data scientist, leads data analytics development in area of radio coverage and capacity, machine learning, and telecom data mining.
This is just at the top. “There is a significant number of people at a variety of levels… from super senior most people reporting directly to MDA, to straight down,” says keen Jio watcher Kunal Bajaj, a former director at Paytm and ex-India head of consultant Analysys Mason.
To be sure, this is not the first time Reliance Industries is working with expats. Even in Jamnagar, its refinery was set up by foreign experts with long years in the petroleum business. “The group has always worked with international people. With digital, it has grown further,” says the second person.
FactorDaily interviewed nearly a dozen people within and outside Jio to get an understanding of how Ambani’s team of expats works and how it helped build the fastest growing telecom company in the world with some 146 million subscribers.
When Ambani decided to build Jio in 2011, he knew it had to be different from the very beginning if it was to disrupt incumbents. This meant going to the core of a telecom business operation: its network. For the first time, any telecom operator in India had decided to build a 4G network, primarily focussed on data. Even calls on Jio’s network would run on data.
In a country just embracing 3G technology, Jio’s punt on 4G was amusing to many. Airtel, Vodafone India, Idea Cellular among others were still rolling out the 3G network and waiting for people to taste internet on 2 or 2.5G networks. To be sure, globally, companies such as Vodafone, China Telecom, and Verizon had started building 4G networks. But, nowhere in the world had a telecom company built an LTE-only network from scratch.
“Jio came in late, but it had an advantage of setting up a network that was futuristic. The Jio network is 5G ready,” says telecom veteran T.V. Ramachandran. “Jio went on with deployment of 4G equipment, others thought Ambani was doing a mistake.”
India didn’t have much talent to build this network. Ramachandran explains that apart from makers of telecom equipment like Ericsson, Nokia and Huawei, no one was spending on building R&D around networks. “When you don’t have people in India doing that, the best thing is to get people from abroad to set it up,” he says, adding that BT (the erstwhile British Telecom)—and now Jio—is the rare telco that does network R&D.
Ambani handpicked Oommen, who was earlier the chief technology officer of Sprint, responsible for network and technology development, systems architecture, and device development.
Oommen had worked with Reliance Infocomm—the telecom services business that Ambani had started in 2003 but had to part with in a family business split with brother Anil—and it wasn’t difficult for Jio to get him back to India. “Oommen is one of the top five guys in the world in network technologies,” says a person, who works closely with him.
Oommen’s network team is from across the world. Jio has the largest fibre backhaul network; its radio network is wider than anyone else. Oommen helped design a network where everything rides on data, even voice. Hence, voice consumers only use 10-15% of the bandwidth, allowing Jio to utilize more of its network for data.
A senior executive of an incumbent operator says, “While we are deploying LTE network, 50-60% of our network utilisation is still for voice. Jio’s is much less.”
The network is key to Jio’s strategy and one of the four top differentiators it has to grab customer market share; the other three being cheap devices, a large family of apps, and low tariffs—these would be ineffective sans a data-ready network.
Oommen knew that. On the IP-based Jio network, the cost of servicing data and calls is as low as eight paise for a minute. For others, it is about 30 paise, but this includes the contentious 14 paise interconnection usage charge.
He continues to travel for a couple of weeks every couple of months. “He has a team in the US to do a lot of international tie-ups… who work on network innovation. His team here has a lot of expats – mostly people of Indian origin who wanted to come back,” says the person who works with Oommen.
Once the network was in place, Ambani wanted to tackle the next big hurdle: devices. Even there, he found out that Jio was in a virgin territory.
Early in 2003, months before the Reliance Infocomm launch, Ambani had asked colleagues at a meeting: “What is the cheapest cost of communication?”
“A postcard!” he answered his own question. “That costs 40 paise.” The calling rate in an offer called Monsoon Hungama launched July 2003 was set at 40 paise a minute.
In 2011, Ambani was following the same affordability playbook: 4G smartphones had to be affordable. He and a few others visited China and met with several phone makers. “Half of the world’s devices are made in China,” says the second person quoted earlier.
Beginning 2012, Jio started sending a lot of people from Mumbai to China to put together the devices strategy and roll it out. The only 4G devices were from Apple and Samsung and they were very expensive and wasn’t fitting into Jio’s plan. “We were always thinking of hundreds of millions of customers and in that context LYF was created,” says the second source. LYF was the initial crop of custom-readied phones for Jio, which then made way for the JioPhone.
The TC-22 tower was again the hub of Jio’s work on devices. A team of designers was put together from different countries: China, Germany, England, Israel and the US. The team spent an inordinate amount of time in China. Adding an extra band for 4G services to existing phones would make them costlier by Rs2,500-3,000. So, the team started designing a phone from scratch with partners in Europe and China. It took them a year to make it but they could price the LYF phone at Rs4,000.
Within months of launch in the first quarter of 2016, LYF captured 7% market share in smartphones in India, according to data from Counterpoint Research. By the third quarter, the phone was out of stock. “With the commercial launch of Reliance Jio service with attractive introductory offer, the LYF branded smartphones saw a sharp demand with reports of stock-outs at some locations,” Jaipal Singh, senior market analyst, client devices, IDC, wrote in a report.
Soon, the market followed Jio and LYF and suddenly 4G smartphones were much cheaper. Between September 2016 and September 2017, the 4G smartphone base went up from 86 million to 178 million. Jio gained the most with its first mover advantage—from 16 million to 139 million—during the period.
But it wasn’t easy for the expat designers. “LTE is a very dynamic network. The networks are constantly optimising itself, and there are software-driven networks. There is no human intervention. That interaction with devices is constantly changing,” says a third Jio executive, who is one of the expats.
A dominant share of new 4G additions was good but Jio realised that to attract a large number of users of feature phones, which typically are voice and SMS only, the Rs4,000 tag for new phones was too high. So, the design team, full of expats, worked on what would be called JioPhone—a smart feature phone. It was not easy. “We are not a devices company, we don’t make phones. But, the team figured the lowest we can go to give a smartphone experience,” says the second executive mentioned above.
With LYF, Jio had brought down the price of 4G phones to a fourth of prevailing prices. With JioPhone, it further reduced the price to the level of feature phones.
Copycats followed quickly. Soon, every operator partnered with the likes of Micromax, Karbonn, Intex and Lava to make cheap smartphones and bundle them with services—India’s data world was being disrupted.
Disrupting the market
Finding people has become a little bit easier since the September 2016 launch of Jio. One big advantage that really excited a lot of people was the vision of Jio, which made people to come and work here. “MDA and (Manoj) Modi—they were meeting people personally. They have been the HR managers,” says the second person.
During one such meeting, Jio hired someone from Apple to build the entire customer service and experience. FactorDaily is not certain about this person but it most likely to be Stratos Davlos, the head of platform and engineering.
“The user experience is from someone who has come from Apple. He built his team here and got more people from Apple,” says the second executive, without saying whether it was Davlos.
Another Jio executive working closely with the team confirmed it is a 20-25 member team. MyJio was the first app that it started to build, which allows users to recharge their phones, track usage, get coupons, and gift vouchers to friends and family. MyJio, the company claims, is the fastest app to get 100 million downloads. The team didn’t stop there—it wanted to extend the same user experience to its cinema and live television apps.
“Unlike other telcos, integration of content and the network started in Jio from the very beginning… which is critical to deliver a seamless customer experience,” says Mritunjay Kapur, a partner at KPMG India specialising in telecom, among other industries.
Once Jio had its pricing in place, it went after innovative marketing. It knew a single version of a campaign doesn’t fit all of India and so bought technology and language translation licences from SDL, a London-based company. “It was the first time any telecom operator was buying licences for the entire stack,” says Richard Delanty, who worked closely with Jio and was the senior vice president—sales and operations at SDL.
Soon, SDL was flying people to Mumbai for large integrations. “Jio was running multilingual campaigns, but the entire workflow was automated, which gave Jio the ability to do multi-region rollouts at speed and scale,” says Delanty. Once a campaign was designed in English, at the press of a button it would go to the translators and would come back after translation. Since the workflow was automated, there were no follow-ups and the campaigns would go to the respective regions.
Tech: the holy grail
“The size, scale and speed of the network rollout was unprecedented… The availability of talent in the country wasn’t enough for something like this,” says Kapur of KPMG.
For Reliance, it was important to collect a lot of network data, user insights and monitor the surges of usage. To begin with, Jio decided to get some people from the US, who had worked on analysing tons of data. In July 2015, Jio hired Nikola Sucevic, a ex-Ericsson executive with two decades of experience in telecom and data science. Others—Indians and foreigners— were hired from companies such as Microsoft and boutique data science companies. The data team has some 30 people.
On the network security side, the team is headed by a person from the UK, aided by four other expats. The information security function was headed by hacker Karsten Nohl, famous for exposing flaws in telecom networks potentially affecting millions of users all over the world, for three years until March 2017.
Young and expat hires have changed Jio and Reliance Industries. About half of the people on the Jio Navi Mumbai premises come to work casually attired, as FactorDaily noticed on a visit to the Jio office late last year. Ambani, who continues to dress in his usual white shirt and black trousers, is often seen huddled with employees in jeans and t-shirts. “If you look at them you can’t make out that they are doing such serious work,” says the second person, chuckling.
The casual attire was a big change within Reliance, so were Saturday holidays. “Now, even one of the canteens have started serving non-vegetarian food,” says the second person. Jio employees go out in the evening to the gym or to play tennis and come back to work in shorts.
Still, there is a problem: most of the expats don’t move with their family, as want to go back after sometime, especially if they are not senior-level executives.
“The ecosystem for expats isn’t there. The [Reliance] group has a very good school, but then not everyone can be admitted. For expats to come and stay here, their lifestyle needs to be developed,” says a senior executive at Reliance. “If you want a 25-year-old German to come and stay here, you either need to pay him a lot, otherwise he will struggle here.”
That’s a problem Ambani and Jio will have to deal with. Not everything comes easy when you are building a digital-first telecom services company in India—even if you have spent Rs2 trillion building it. Factordaily
Editor's Picks »
- Policy rethink and higher volumes to aid container shippers
- DCB Bank delivers a strong Q2 but pressure on margins foreseen
- Havells India: Rising costs give a jolt to profitability in September quarter
- All’s well at Mindtree, except for high client concentration risk
- India’s rising steel demand is making companies starry-eyed