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Introduction to Reliance Communications and Current Market Position


Discuss About The Marketing Strategy Reliance Communications?

Reliance Communications has been facing challenges for higher competition in the telecommunication sector as Reliance Jio entered the market with ‘free packages'. In the second half of 2016, Reliance Jio created a storm by offering free 4G data services and unlimited free calls to the users. In the last few years, Reliance Communications has been facing the issues of reaching new customers and the existent customers left the services. However, Reliance Communications (RCom) has the ability to provide same 4G service to the customers as they have pan India spectrum (800MHz). Reliance Communications can tackle the high competition in the Indian market and the management of RCom is planning to fend off the competition with marketing strategies to fetch new customers. RCom is presently the sixth largest telecommunication company according to marketing position. However, the market share is getting weak as subscribers of RCom are mostly low-revenue customers. In this case, study, how the new ascent of Reliance Jio poses threat to Reliance Communications will be discussed with new marketing strategies of Reliance Communications.

Reliance Communications (RCom) is an India based telecommunications company and it has it's headquartered in Navi Mumbai, India. Reliance Communications mostly provides GSM services (Voice, SMS, 2G, 3G and 4G) to mobile and it has DTH services and broadband services also. It also offers fixed-line telephone, IPTV and satellite TV services. In the present Indian market, RCom has more than 85 million subscribers and it is the sixth largest telecommunications[1]. RCom is a subsidiary of Reliance Industries and the owner of the company is Anil Ambani. Reliance Communications was established in the year 2002 and operating income is US$1.1 billion as of in 2017. In the year 2002, RCom mainly launched CDMA services and in the year 2008, it started to provide GSM services. In 2010 it brought the spectrum of 3G services and started to give 3G services in 13 circles and in 2012, RCom reduced the price of data by almost 50%. In 2013, RCom made a partnership with Lenovo to make co-branded Smartphone. Later in 2016, RCom announced that it would stop its CDMA services across India and it would migrate all CDMA connections to GSM. One of the biggest decisions of RCom was the acquisition of MTS brand and in the year 2016, RCom acquired MTS India and SSTL got 16% share of RCom.

Reliance Communications' Marketing Strategies to Tackle Increasing Competition

Death of Dhirubhai Ambani had spilt between Anil and Mukesh Ambani. After the splitting in 2005, Anil Ambani got the companies like Reliance Energy, Reliance Infocomm, Reliance Natural Sources and Reliance Capital. Till 2003, in India upper middle-class people had an annual income of $11000 to $13000 and they could afford GSM mobile phones cost $60. India was that time had low income; however, technology was an important factor for them[2]. In order to grow in the market, most of the telecommunication companies target mostly upper middle class and they charged premium pricing. In this scenario, RCom entered the market and it named the subsidiary as Infocomm. In addition, RCom mainly targeted the mass people by offering a lower price in calls and texts. It succeeded to grab the second position by the end of 2006 and the successful strategy of Infocomm made the government take a decision in taking the similar business model of the telecommunications sector. In a previous time, RCom took the cost leadership strategy by offering the lowest price in calls and they incurred handset switching cost and most important infrastructure cost. Of late, RCom lost the position in the market; other telecommunication companies like Airtel, Vodafone, Idea and Aircel grab the market share more than RCom. Recently, Elder brother Mukesh Ambani launched telecommunication company name Reliance Jio and it affected the growth of RCom and RCom is going to spiral downwards.

Reliance Communications has market capitalization of more than 4 billion dollars and once the company was listed in Asia's top five most valuable telecommunication companies. RCom Company is India's integrated telecommunication company and it has its customer base of more than 40 million and in overseas, it is more than 1.4 million. RCom has the corporate clientele for more than 250 multinational companies and 600 individuals. RCom gives digital network services to more than 13000 towns and in more than 50,000 villages. RCom has world's largest next generation IP enabled connectivity infrastructure that contains more than 165000 km of the fibre optic cable system in India, UAE and Asia Pacific and also in Europe[3]. However, these are all the glory of past, in recent time, Anil Ambani faces huge challenges from other telecommunication providers in India in reaching new users in India. In India, the telecommunication network is the 2nd largest in the world. As per the statistics on June 2017, telephone subscribers in the India are 1.2 billion and mobile subscribers are 1.1 billion[4]. Fixed-line users in India are 25 million and monthly telephone additions are 7 million. These statistics show clearly that India has huge potential in the telecommunication industry. RCom wanted to catch the market and they started with the highest quality of service with low pricing strategy. However, in recent time, Anil Ambani's RCom gross debt in 2017 was ?45,733 crore. The rating of RCom is reduced to Caa1 that suggests that it is providing poor services to the customers. Lots of customers are complaining about call drops and they also suggest about the poor internet connection. In the previous time, RCom has been given the rating of B2 that suggested about speculative connection. RCom has been showing the weak performance in the last few years and it goes to the fragile liquidity position and RCom was told to repay ?25,000 crore to the lenders[5]. RCom has been facing the issue of loosing of customers and it was reported to loss approximate 948 crores in the 4th quarter of 2016. However, in the year of 2015, it acquired a net profit of 79 crores. 

Challenges Faced by Reliance Communications in the Telecom Industry

The reason behind the huge loss of RCom in the last couple of quarters was the introduction of Reliance Jio. Elder brother of Anil Ambani, Mukesh Ambani launched new telecom company Reliance Jio and he spent almost ?1,50,000 crore including services and spectrum. Reliance Jio has the debt of total ?49,000 crore including spectrum liability. Reliance Jio is trying to grab the data users’ market by giving free unlimited class, data and texts. RIL aims to become debt-free from the profit of Jio and petrochemical sector. RIL has a debt of ?194,381 crore through cash, mutual fund, marketable securities, deposits and bank deposits. Mukesh Ambani invested huge money in last three years and it is almost equal to the investment of RIL entire 35 year’s history. Mukesh Ambani has taken the huge risk in opening Jio and it offers huge discounts and free services to the users aiming to grab large market share[6]. Reliance Jio is the new factor in the telecommunication sector in India as the free services to the users in introductory period shook the nation and telecommunication industry in India. Jio has been providing threats to Airtel, Vodafone and Idea and the overall expenses of data and calls go significantly low. In the previous time, an individual used data pack of 1GB for an entire month and Jio offered 1GB for a user for a single day. This huge changes of users' mentality in using high-speed $G internet brought huge radical alteration in the telecommunication market[7]. RCom has registered in declining the customers' base. The decline is noticed in mainly the data traffic usage per customer. In 2015, more than 39 million customers used the data connection of RCom, however, in 2017, it became significantly low estimated to 28 million. Moreover, in a year ago the data traffic of network used 104,700 million megabits and in 2017, it dropped to 79000 million megabits. On the other side, Reliance Jio introduced the free data and voice calls to the customers in the introductory period. This ‘freemium' strategy worked and Jio announced 100 crore GB of data traffic per month and almost 200 crore voice with video minutes a day. This strategy of free data led India to become leading country in terms of mobile data usage. It also led to use of mobile data usage that is 50% more than China itself[8]. Jio sets the sigh of India is becoming a digital country and it is going to be digital Life faster than any other country.

Merger Plans with Aircel

In case of voice users, Jio's entering the market of telecommunication; all the major players in the Indian telecommunication sector had to cut off the tariff. In tariff wars of voice pricing, RCom lagged behind as Jio was giving free calls to all mobile connections and telecom giants Idea, Airtel and Vodafone cut off their prices as well to face Jio. The rise of Jio makes the worst loser to RCom and RCom failed to retain the customers and the users of RCom started switching the connection. On the other side, Reliance Jio offers its network almost all the cities in India and it is giving the almost double number of $G towers. Mukesh Ambani stated that by the end of 2017, Jio will be present almost all the villages, cities and places in India. Nonetheless, RCom business is witnessing steady downfall in each quarter and subscribers fall to 84.8 million in the fourth quarter of 2016 and it was almost 103 million in the previous quarter[9]. RCom was losing the average revenues per customer; this figure goes down from ?108 to ?83. On the contrary, Reliance Jio got more than 100 million customers in just 170 days of launching the business. It made a record of adding 7 new customers in a second. In the commencement of business in the telecom sector, Mukesh Ambani's Jio made history to fastest achieved customer base in Indian history.

Amidst the pressure from Reliance Jio and other market players in the telecommunication sector, RCom has a debt of 30 billion and it shares just 6.25% market share in the telecommunication sector. RCom is planning to turnaround with marketing strategies. At first, RCom is trying to grab the customers with lower tariff and in order to reach a large number of customers; the organisation is planning to advertise in huge scale. Moreover, to keep away from Jio's threat, the organisation is planning to merge with Aircel. Aircel has a customer base of 89 million and it has market share of 7.5%, slightly better than RCom. If they merge, RCom will have better market share and they can fight back to Jio. RCom had 14% of market share in 2013 and in 2017, it has just 6.25%[10]. In order to keep itself afloat, marketing strategy is needed. RCom is planning to monetise its assets and they want a long-term contract with setting high infrastructure. RCom will be doing marketing with taking the initiative of IMC. In order to marketing, RCom put new four senior executives in their panel and it wants to taste the success through merging with Aircel. Revenues of RCom were 0.9% between 2013 and 2015 and on the other side of Aircel reported to facing loss[11]. Reliance Jio launched its business on 15th August 2016 and RCom announced 4G services just after two days and RCom revised the plans of tariffs and marketing technique. Aircel and RCom both have a debt of ?28000 crore and ?14000 crore respectively. In order to keep afloat in the market, RCom wants to bring down the tariff and billing of the customers and they could u additional spectrum.


In the first part, the rationale of the study that is problems facing by RCom in recent time in telecommunication industry will be explained. In the rational part, the justification for choosing the subject will be described. Moreover, in the later part, the situational analysis in the market of telecommunication in regards of RCom will be justified. In this section competitive position, external and as well as internal analysis will be conducted. In the later part, challenges faced by RCom in recent time will be explained with description. The marketing strategies adopted by RCom will be narrated. Moreover, in the final section, the methodology of the study will be delivered and in this section, methods will be justified for taking these for data collection. Timeline of conducting the study will be provided in the last section,

Reliance Communications shared their views to the Government and regulators about taking the corrective measures in order to recover the health of Indian telecommunication sector as this industry has more than ?7 lakh crore debts. RCom itself has more than ?44,000 crore debts. The share price goes to 20.50 and RCom has fallen behind for the loan obligations to the more than 10 banks. 10 Indian's top banks showed the red flags to RCom and they decided not to lend money. The banks marked categorised RCom as SMA (Special Mention Account) to report the loans. India's rating agencies are continuously giving a lower rating to RCom and it has been facing complete competition in Indian Telecom Market. RCom will be getting the clearances from the agencies and regulators in merging of Aircel and MTS and RCom is going to sell 51% towers to Brookfield[12]. The reasons behind the loss of RCom are manifolds. One reason is the rise of Jio and another reason is disruptive pricing model of RCom. The free offers of other companies are posing a serious threat to RCom. Once, RCom itself took the strategy of cost leadership strategy in the inception of telecommunication industry in India. Now, Jio has taken the same strategy to attract more customers and making the situation worse for RCom. RCom has been facing several disappointing quarters and management is thinking about revamping of adjustment of gross revenue, levying the license fees and charge in spectrum usage. Management of RCom is also thinking about financing packaging for the industry. In a past few months, Airtel net profit has been decreased by 70% and Idea Cellular saw its successive loss of 325 crores[13]. The new launching of Jio put threat almost all companies in the telecommunication industry and Vodafone slipped its revenue to 0.5%. Jio offers free services and the customers are switching the telecommunication companies and using mostly Jio’s free connection. Moreover, Jio performed exceptionally well in the December 2016 and RCom stood in the last place among first five major players in the Indian market.

It is clear that the rise of Jio has posed significant threat to all telecommunication companies and RCom has been the worst sufferer. The industry is showing buyouts, merging and exists as Mukesh Ambani's Jio is creating hullaballoo in the Indian market and small players have to quit the market and large players can be in the market with cutting off the prices. The recent example of this can be Norwegian multinational company Telenor. Telenor recently quitted India as intense price war is obvious in the Indian market and consolidate will be hastened as Jio puts a shock wave with free services. Indian customers have been observing frequent call drops, slow internet speed, fluctuating speed of internet and for companies, they have been noticing expensive wireless spectrum. Jio's arrival has been creating a massive shock to RCom and major tie-ups are taking place and Jio aims to take up almost 50% market share at the end of 2021[16]. Jio is offering free mobile service and handset to the customers. Only 1500 mobile will be giving $G speed and with added benefits. Customers will get cash back on the amount, it is clear that Jio is taking the aggressive marketing technique in Indian market that creates intense competition. RCom is now one option left that is a marketing strategy to survive in the market. In order to fend off Mukesh's Ambani's target, RCom has also been responsible to pose threat at the lower end of the market by announcing the merging to Aircel. It is reportedly in the news that RCom has a word with Tata Group in starting a Join forces. TRAI (Telecom Regulatory Authority of India) warned the government about the payment defaults and free data that can create price war in telecommunication sector[17]. RCom has decided to merge with Aircel in the wireless business, in doing so it can make the 4th largest mobile network in India. Aircel and RCom will have 50% stake in merging entity. However, RCom will control the enterprise segment and they will perform as a standalone entity. The marketing strategies of RCom are based on empowering the marketing team through articulate goals through unifying global resources. Moreover, RCom needs to review the plans and sync the plan with the sales team. Some of the management decisions are lower costs drive lead generations and retain more customers through customer satisfaction. Jio's disruption has provided a fatal issue to RCom and they want to fight back through using social media tools, aggressive advertisements and increasing the productivity of the employees.

In order to be successful in long-term, business must have a vision and vision helps to improve the future of an organisation. In order to be successful, RCom uses six strategies, providing future direction, realistic, motivating, express a consumer benefits, fully communicated and consistently measured and followed. In order to achieve the objectives of the organisation, RCom has been following complex architecture in functioning, facilities, domains and coverage of services. RCom has always been using latest technologies and in recent time, it has been facing the issue of loosing of customers.

Strengths are offering flexible plans to the customers and good advertising in the Indian market. In addition, RCom has a backbone like Reliance ADAG Group that provides financial stability. RCom uses celebrity faces in advertising that gives a brand image. Website of RCom gives access to bill payments and recharge.


In price competition with Jio and other market players it is lagging behind. Reliance Communications has limited market share in the industry and customers are moving to other companies using MNP. RCom has distribution issues and it has lack of competitive strength[18].


RCom shifted its business to CDMA to GSM that provides to grab a large number of customers. RCom has reached almost 99% of customers all over the India and it provides rural telephony. It can target new market with horizontal integration and vertical integration. RCom uses latest and low-cost technologies that can provide benefit to give low-cost services. RCom has uses the techniques of mergers and partnerships that provide an opportunity to be bigger telecommunication providers.


New entrants offer low prices and customers shift to other operators. The Recent rise of Jio poses a significant threat to RCom and strict TRAI guidelines are threats to them. IT development in Indian telecom industry is another threat as RCom needs to update the technology that creates market demand.


·         Government has opened up the telecommunication sector by giving permission of FDI by 100%[19]

·         TRAI needs to give permission in starting new marketing or offers

·         Public-private partnership depends on policy

·         Licensing scheme is unified in India


·         India’s per capita income is not so high, however, density of people provides potential market for telecommunication

·         Demand for telephony and internet access is getting significantly high

·         Service sector growth brings development in telecommunication industry


·         In India, people like to spend in telephony and new sources of employment is given by telecommunication

·         Internet and telephony opens up the opportunity in education, healthcare and government


·         Growth of telecommunication in IT sector

·         Telecommunication infrastructure is opening up

·         Connectivity by optical fibre

·         Speed of internet

Table 1: PEST analysis

Suppliers power

·         Concentration of suppliers

·         High competition in choosing suppliers


Customers’ power

·         Customers seek low pricing company and the customers’ bargaining power is rising

·         Customers’ want reliable services and that provide stability


Industry rivalry

·         High switching costs

·         Rivalry force is high as there are large players in the industry, Airtel, Vodafone, Tata Group, Idea and Jio

·         Low exit barriers


Threat of new entrants

·         High initial cost

·         Government regulations



·         The substitutes in the market are optimum and high switching cost

·         Mobile Number Portability facility is available and substitutes provide low-cost services


Table 2: Porter’s Five Forces

Reliance Communications is losing its foothold in the telecom industry of India and it is going to merge with Aircel. In previous time, cost leadership strategy of RCom overshadowed other market players; however, the emergence of Jio disrupted all game.

Operator names


Market share

Vodafone + Idea

210 millions (Vodafone)

194 millions (Idea)

17.75% (Vodafone)

16.35% (Idea)

Bharati Airtel

281.25 millions



128 millions


BSNL Mobile

104.50 millions



88 million


Reliance Communications

81 million


Tata DoCoMo

42.43 million


Table 3: Market Share of Telecommunication operators in India

RCom has been facing the huge challenges from the competition in the market as the emergence of Jio made the industry disruptive with the freebies. Moreover, all the other companies in the market have to cut off their base tariff as well. RCom also cut down the pricing and it led to the loss of profitability in the market and the strategy of survival led to massive disruption in the industry. In addition, most of the companies are giving low-cost sim card facilities with introductory packages and RCom is busy with merging with Aircel.

In auditing, RCom has been facing the issue of lack communication between distributors and retailers. The operation of RCom lacks the depth of distribution channels. Sales executives need to work hard and advertisements need to communicate the desires of the customers. RCom faces the issues in lack of proper executives who can instruct teams to hunt new strategies for the management to grab the new market. All the retailers do not get claim at right time and they leave with the option of letting go of distributorship.

TRAI regulations set the target for speed and call drops regulations, in this scenario, the customers get to know about other companies’ information. There are various factors that are responsible for increasing the telecommunication sector, technologies like 4G, changing consumer behaviour, better devices and introduction of cloud technologies[21]. RCom is not a regular visitor of Runner and DSE[22]. Most importantly, all the retailers do not know about new scheme and offers of Rcom and they cannot convey it to the customers.

RCom is doing sales promotions and advertisements using new marketing channels and existent marketing channels that do not boost up new customers and existent customers leave the company. RCom does not conduct push promotional strategies like convincing the intermediary channels to push the sales of the items to ultimate consumers through promotions.

Reliance Communications can segregate the market in India by dividing as Tier 1, Tier 2 and Tier 3 cities and set the pricing according to the tiers. The tier will be set by economic condition and disposable income of the people in these areas. Marketing can be done through providing best features that meet the needs of all tiers in India. RCom needs to maintain robust product roadmap that must be approved by the vendors. RCom needs to offer the best service among the competitors and in tier based operation, all types of services like 4G, 3G, calling and texting features must be available. RCom can offer flexible products that must ensure lead in the ability to operate in the market. Best services and low prices will be the sole marketing offering for Reliance Communications that would benefit the company to entail multi-rating agencies.

For RCom, this strategy will be least risky as the firms will use the existing capabilities and resources. India's telecommunications industry is growing the industry and RCom needs to maintain the market share that would result to growth for the organisation[23]. When the competitors in the market will reach the capacity limit, RCom will have the opportunity to increase market share. RCom has introduced new packs for the customers that allow the users to have lifetime validity of connection and RCom also offers value pack for post-paid users also. RCom is trying to grab the market share by handset driven strategy.

In order to grab the new market, RCom expands its business to more than 20,000 towns in India and RCom tied up with Research in Motion (RIM) to provide emails, internet and video calling services. RCom tries to merge with Aircel and grab new market in South Indian regions. RCom offers special services to send money and real-time exchange system in Indian customers.

Telecommunication gives the opportunity to develop new services and product to the customers. RCom launched landline services to the customers. In the last year, it launched 4G services to the customers, it offers DTH services. Moreover, RCom introduced long-distance voices through STD with integrated high scalable platform.

Reliance Industries is the backbone of RCom and RCom recently acquired eWave World, WiMax Operator, based in the UK. RCom is trying to build up WiMax network in more than 50 countries to give high-speed internet[24]. RCom again wants to provide satellite TV and it launched IPTV.

RCom provides the mobile-based services to the customers with data, voice, text and video call facilities. This company offers quality services in voice and data packs. Moreover, recently it has introduced DTH, IPTV, Satellite TV and 4G[25]. RCom has strong optical broadband services that provide high-speed internet in most of the places in India. It has helpful customer services team that provides help in any query of the customers' end.

Indian telecommunications industry is in high competition, RCom has to take low-pricing strategy in order to be in the market. However, low pricing strategy helps to increase target market. Introducing new plans with the low price tag can increase the visibility in the market and increase the customer bases.

RCom is present in almost all parts of India and customer service centres can be seen in almost all cities. Customers can contact to the customer support executives any time to resolve the problems. Reliance Communications offers RCom outlets like Web Worlds, Customer Convenience Centres and Broadband centres. In addition, RCom needs to maintain greater distribution channels to reach more customers in interior sections of India. Channel members are needed to be given an extra bonus to selling their connections. The members must be competent, credible and responsible.

Reliance Communications has been using TV advertising using the celebrity faces; however, it becomes lack in recent time[26]. RCom can provide large page advertisements in national newspapers in order to fight back in the market introducing new plans or offers. In case of social media, they need to maintain a competent PR team that would provide a daily update on social media pages through offers, discounts, plans, images and short videos that can engage customers. Social media, Facebook, Instagram and Twitter advertisements are cost-effective and it helps to reach customers. Moreover, events organisation helps to engage more people and in the Indian market, sponsorships in IPL or ISL tournaments can enhance the brand visibility. In addition, being partner of TV programmes can increase brand awareness.

In this study, positivism philosophy has been used as data about natural phenomenon needed to be collected in this study. Positivism philosophy is a scientific process. The collected data have been interpreted through reason and logic[27].

Moreover, the deductive approach has been used in order to collect and deductive approach aims to utilise theories and concepts related to the study. The concepts of marketing and issues in the telecommunication industry in India have been tested through practical deductive approach[28].

In addition, descriptive research design has been used in order to collect the data as observations of data are needed with interpretations. In-depth study was required in order to formulate the descriptive design. 

There are mainly two types of data collection methods, first one is primary and second one is secondary data collection method. Primary data is raw data that is collected from respondents directly. In secondary data, the data have been collected through secondary sources. In this study, secondary sources have been used in order to collect the data about Indian telecommunication sector and about Reliance Communications. In order to collect the data, books, journals, articles, websites, organisational reports and newspaper articles have been used mainly. All the data that have been collected tried to be authentic and right.

This study is based on mainly secondary data and content analysis technique has been used to analyse the data. As it is a case study, secondary data have been used with actual administrative situation of the organisation[29]. No data has been altered and this study described as what has been happened to Reliance Communications in recent times.

In this study mainly data sources are secondary. As the subject of this study is recent changes in the telecommunication industry in India, sources are mostly newspaper articles and magazines. Business Today and Financial Times are famous magazines and maximum information has been taken from these magazine articles. Newspaper sources have been used like Times of India and The Hindu. Moreover, the website sources like TRAI, Reliance Communications have been used in order to collect the data. Peer-reviewed journals have been used in order to analyse the recent conditions of telecommunication sectors in India. Reliance Communications' media reports have been used to understand recent issues and scenarios. Lastly, management books and concepts are used for analysing the practical condition and comparing to this with theoretical perspectives.


Week 2

Week 4

Week 6

Week 7

Week 8

Week 10

Week 12

Selection of topic and identify the background of study


Reviewing the literature


Identify the case study objectives and  problems


Collection of secondary data


Analysis of data


Justifying probable solutions


Final submissions


Table 4: Gantt chart

(Source: Created by author)


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