On the 22nd of April, two days ago, there was an announcement about Facebook investing in Jio platforms. All leading media agencies in India carried this news. In taking up this stake, at US$5.7B for a 9.9% stake, Facebook has valued Reliance Jio at a whopping US$57.57B, a Telecom that is less than five years old in India.
The Jio-Facebook (Project Redwood) initiative is focussed on exploiting the technology and reach of WhatsApp and the network relationship Jio has with millions of corner stores in India mirroring the WeChat/WePay or Alibaba-Alipay walled gardens in China. Strategically this will enable WhatsApp with an anchoring role to take on the payment space dominated by few players in India like Google Pay, Phone Pe, and PayTM.
By doing this, Facebook is transitioning WhatsApp from a mobile application to a “platform” and Jio is leveraging the emerging platform to create an “ecosystem” that can exploit a network of more than 30M corner stores in India, enabling each to transact with customers in their neighbourhood.
This venture is coming to fruition for when the post-pandemic era begins which will likely see a dramatic jump in digital efforts across the retail industry in India.
RIL Chairman, Mukesh Ambani in his address to the media on the 22nd clearly stated that the intention is to court small and medium businesses in India. In his address, Mark Zuckerberg has indicated the size of this target to be 60M businesses.
Empowering the small corner stores will be the JioMart e-commerce platform. This will impact the two leading e-commerce players in India: Amazon and Walmart-owned Flipkart, who currently control 60% of India’s e-commerce market according to market intelligence firm S&P Global.
Mobile payments are nothing new to Telecoms: who were amongst the first companies in India to step into mobile payments with Airtel leading the way. However, these initiatives have effectively failed with the emergence of companies like PayTM and Phone Pe who have adopted a pure-play transaction-enabler rather than that of a more traditional bank.
With this single move, Jio has clearly demonstrated the value of its “Beyond Telecom” thinking and the market has accepted this by valuing Jio at US$57B.
Now the three other major Telcoms in India: Airtel, Vodafone, Idea, and BSNL need to deliver practical alternatives to the Facebook/Jio model if they wish to maintain and improve their valuations.
India's leading Telecoms have significant reach. While these numbers vary month to month, Jio’s reach is 300M+ similar to that of both Airtel and Vodafone while BSNL has a reach of 120M. Airtel has made ground to compete with Jio on the media and content front while Vodafone Idea and BSNL still depend on ARPU-centric voice and data.
Voice/data traffic is primarily centred around media & entertainment, education, and health from a consumer perspective and business process enablement and customer engagement from a business perspective. All of these, in one way or another, utilise telecommunication networks with the telecoms operator as the ultimate facilitator.
On 9th July 2019, I wrote a short blog titled “On Becoming Digital” (http://www.infomo.net/index.php/blog/19070901). In this blog using Reach on one axis and Ability-to-Engage on the other, I suggested an enterprise business strategy can be broken into four types, with digital ecosystems having the largest reach and greatest ability to engage customers. Jio (with its Beyond Telecom tagline) is a perfect example of this in practical terms.
While over 80% of customers go online every day, hardly 0.025% of customers directly interact with their Telecom’s websites or mobile apps. Without such direct interaction, there are extremely limited opportunities for a Telecom to intelligently leverage the inherent value of its network and first-party data. Telecoms first-party data will inevitably become more valuable and of strategic import now that Google has announced that it will no longer support 3rd party cookies.
Infomo enables Telecoms to exploit their existing core assets (network and first-party data) with an ability to engage their customers, both business and consumer, via online and offline engagements. Infomo has entered into strategic agreements with BilliPay (a next-generation payment platform) and several leading content producers to create a flexible plug-and-play solution that is Telecom-ready.
By leveraging their core assets and integrating these market-ready solutions, a nimble Telecom can rapidly deliver a range of new services that will compete favourably with the Facebook/Jio offerings. These solutions include:
- Provides digital publishers with a state-of-the-art solution to maximize monetization when users visit their websites and apps.
- Enables advertisers an alternative to the legacy programmatic model to directly engage a known consumer base.
- Enables small to medium business (SMEs) with do-it-yourself digital marketing facilities for hyper-local marketing.
- Next-generation infrastructure-free payments solution providing: Comprehensive Bill Presentment, Management, and Payment Platform all on one simple dashboard.
- Business and peer to peer transactions.
- Enables Telecoms to offer an integrated value-add solution portfolio to enterprise accounts that will manage their customer online engagements (web/mobile) and offline engagements (SmartChat, SmartSMS, SmartMail, etc.).
Through its long-standing relationships with telecoms and leading digital publishers across Asia, Infomo is on track to create a connected community of over 300M unique users.