4 min read.Updated: 23 Jan 2019, 10:36 PM ISTRohit Prasad
It must ratchet up the scale of its ambition, and rediscover the audacity that lay behind its original success
eliance Jio fired the most dramatic opening salvo of the new year with its announcement that it was venturing into the e-commerce space. It also served notice to its powerful competitors by suggesting that data of Indians should be controlled by Indian companies. Whatever be the trajectory of Reliance’s e-commerce ambitions, much can be learnt from its declaration. First, there must be a clear realization that the internet is a melting pot where connectivity providers, search engines, social media companies, device manufacturers and e-commerce platforms are engaged in stiff competition with each other, even as they cooperate in various ways to provide services to customers. For instance, Google’s search engine competes with Amazon in e-commerce by providing comparison shopping services. Second, the competitive advantage in this game will be seized by the company that is able to gather the most amount of data from customers and use it in the most effective manner. Third, bending the still nascent rules of the game to one’s advantage will constitute a key pillar of market leadership. Fourth, a stratospheric level of ambition is a necessary condition for mere survival in this market. And finally, the ability to “mess with the minds of competitors" using jaw-dropping announcements followed by razor sharp execution is key.
It seems almost superfluous to mention that as of January 2019, Jio seems to have established a clear advantage over Airtel and Vodafone Idea. It is not even clear whether Jio regards them as its primary competition in the long run. So far, Jio’s growth was largely attributed to smaller telecom companies exiting the market. However, in October 2018, with all small firms having already exited the market, Jio added 10.5 million users while Vodafone Idea and Airtel lost 7.3 million and 1.8 million users, respectively.
In terms of its recent loss of subscriber numbers, the most plausible hypothesis is that the incumbents are losing 2G, 3G, and the 4G mass market customers. The 4G premium customers may have no reason to move and may even be averse to the Jio brand. Airtel’s problems with the mass market segment can be tackled by the introduction of a 4G feature phone, the simplification of its pricing plans to match the clarity of Jio’s plans, and bringing more flexibility in its data plans by setting monthly data limits rather than daily limits.
But to address the problems of Airtel and Vodafone Idea in terms of subscriber numbers would be to miss the point. The game today is not about allowing subscribers to connect to the internet but, rather, helping them to solve problems and becoming a part of the way they live, work and play. In the case of Airtel, it is also about stopping being seen as the follower and recovering its leadership position. In terms of subscribers, the company is still the leader with 343.5 million. It caters to a large percentage of technology startups in India. But in the battle for the mind of the customer, it seems to be a step slower than the new kid on the block.
To reclaim its lost leadership brand, Airtel should draw a leaf out of the politician’s playbook. The Congress party has recently come back from the dead by targeting farmers, SMEs, and unemployed youth. K. Chandrashekar Rao (KCR) has held off the challenge of the mahagathbandhan by a slew of welfare measures, including a successful scheme for giving doles to farmers. The challenges of the mass market can be best addressed by a similar targeting strategy. Here are three possible ideas that could help.
First, an agri-tech platform to provide farm-related services via the farmer’s mobile phone. Farmers residing in rural areas have started using popular communication apps. With its partner IFFCO Kisan Sanchar Ltd, Airtel can bring in efficiencies on a massive scale by filling knowledge gaps related to weather predictions, mandi rates, trader contact details, updates on government policies and subsidy details. Once they grow data-rich, Airtel’s platform can provide insights and data-driven recommendations moderated by expert opinion on crop selection. It can evolve into a complete e-commerce platform exclusively for farmers.
Second, an all-India weather portal that can be used by farmers, insurance companies, logistics providers, aviation companies and energy utilities. The weather solution can work off connectivity provided by sensors placed all over the country.
Third, a “Come to India" initiative that aims to turbocharge India’s highly underutilized tourism potential, both for international and domestic tourists, by the creation of millions of competent travel guides, waste warriors, tour operators and travel agents in partnership with government agencies. This could be synergized with a skills development and jobs portal for the youth of the country, especially those looking for jobs in the range of ₹15,000-25,000 a month.
In short, Airtel has to transform itself from a connectivity provider to a cause-driven company that aims to radically improve the lives of ordinary Indians. It must ratchet up the scale of its ambition, and rediscover the audacity that lay behind its original success. The journey will probably require a rewiring of its culture.
As Louis Gerstner, the CEO responsible for making IBM an internet-compatible company, said: “Until I came to IBM, I probably would have told you that culture was just one among several important elements in any organization’s makeup and success… I came to see, in my time at IBM, that culture isn’t just one aspect of the game; it is the game."
We look forward to a jaw-dropping announcement or two from India’s pioneering communications company.
Rohit Prasad is a professor at MDI, Gurgaon. Game Sutra is a fortnightly column based on game theory
Co-authored with Ravi Tanna, a student at MDI Gurgaon