A Government and Corporate Nexus: Understanding Reliance Jio

INTRODUCTION

Whenever a new government is elected, its list of promises always include expansion and growth in economic spectrum for the country. And most of the times, in order to do so, the government seek ways of improving its abilities for which they involve private sector’s help, which leads to corporatization.

An act of reorganizing the structure of a government-owned entity into a legal entity with the corporate structure found in publicly traded companies[1] is what is known as corporatization. A lot of these private companies form ‘friendships’ with the government in power and actively participate in the government’s activities as shareholders.

Corporatization has shown to lead improvements in the performance of the government agencies[2], despite the fact that the reason behind how the improvement happens is not well understood. One of the reasons as to why this improvement is apparently visible is because of enhanced commercial performance. The establishment of the new governance and the how well they are implemented also plays a major role in the success of a corporatization.

Governments around the world are adopting the trend and taking back the control of services that were sold out to the private sector. It has also become one of the most popular form of ‘modern’ government ownership of enterprise. But, however great that sounds, things aren’t always what we assume of them.

The conversation of corporatization always brings along another familiar terminology, ‘privatization’ in the spectrum. Privatization to the conservative ears sounds right because for them it means taking things away from the inefficiency and mismanagement of the bureaucrats and the control of the government. The concept of privatization has always been misunderstood. To the people, it is what they believe that the rewards will go to individuals and their roles will be enhanced. Instead it is actually has less than nothing to do with private individuals.

Privatization is the process of transferring an enterprise or industry from the public sector to the private sector.[3] The public sector is run by the government and if privatization happens, the functions are taken over by a corporation which means that they are corporatized and not privatized. Corporatization, accompanied by corporatism which means an excess of influence of corporates on the government, are a bit alarming for our era.

In May 2014, when Narendra Modi was elected as India’s 14th Prime Minister, one of his flagship program was Digital India and to connect the rural and urban parts of the country through the services of telecommunications. As an alliance to Modi’s ambition to make India digital, the country saw the launch of Reliance Jio in 2016, a new mobile network operator offering services at dirt cheap prices compared to the other players in the game.

The popularity and launch of Jio was hyped with the events that followed, including an economy crisis on November 8, 2016 when PM Modi announced demonetization of 500 and 1000 rupee notes. The proximity of PM Narendra Modi with Mukesh Ambani has always been under the radar. Modi’s affinity with Reliance as a brand has been very evident whether it includes him being on billboards or newspapers promoting Jio or making sure to address it as people’s brand in his speeches.

HISTORY

Reliance Jio Infocomm Limited is an Indian mobile network operator owned by the Reliance Industries. It was soft-launched on December 27, 2015 but was made available for the public on September 5, 2016.[4]

The 4G services of Jio were launched in December, 2015 to the staff and family members of the company. The brand ambassador, Bollywood megastar Shahrukh Khan, along with musician AR Rahman and Ranbir Kapoor were a part of the launch event.

The commercial launch happened in September, 2016 and in the first month itself, Jio had acquired over 16 million subscribers. By the end of the third month, the company had crossed the 50 million subscriber mark. This success made Jio the fastest ramp-up by any mobile operator in the world.[5]

Jio’s success is nothing but spectacular. The fact that it took the company less than a year to be delivering billion and billion bytes of data, more than half the data delivered by all American carriers put together, as it claims.[6] Despite delivering at zero cost for the initial seven months, the charges that the company applied are one-third of what the other Indian operators have been charging their customers for years.

By October 2018, the company had over 252.21 million subscribers and about 21.57% of the market shares. [7] Jio has prompted its competitors to act and take measures to ensure that they don’t lose out their subscribers to the ‘wave’ and to terrify the competition further, Ambani has spoken of wanting half the market to himself, by 2021.[8]

Jio’s financial positioning in the market is also very strong. The accounts are not separated from the parent company, Reliance Industries and the funding for the telecom is getting a push from the profits generated from the petrochemicals and oil exploration businesses.

HOW JIO REVOLUTIONIZED THE TELECOM INDUSTRY?

Prior to Jio’s launch, the telecom industry was a multiplayer market and the consumers were very careful about their data usage and consumption because of the sky-high pricing by the network operators. Consumption of video content was not a real option for the amount of data that the companies offered.

Compared to the 2018 scenario, where since Jio was launched, the people had the option for free voice calling, months of dirt-cheap data services and because of that India has been growing on the world slowly. Content has never been more in demand and to answer to that major companies like Netflix, Amazon Prime, Gaana, Hotstar, among many others have taken off in a big way. These global giants are now prioritizing Indian languages to attract the internet consumers in the more rural parts of the country whose preferences are languages except English.

With over 460 million internet users, India is the second largest online market, ranked behind China.[9] In the year 2015, only 26% of the Indian population had the access to internet whereas in 2016, 29.55% of the population was online, which is about 323 million people.[10] Both figures are forecast to increase in the coming years, with projections to amount to 524.5 million and around 37.4 percent respectively in 2021.[11]

“Jio is doing especially well in the rural markets because incumbents lag Jio in 4G coverage and also due to the success of Jiophone, which has sold almost 25 million devices by June 2018,” noted Kunal Vora, research analyst, BNP Paribas in a recent report.[12]

Reliance Jio started a price war in India’s telecom sector making its competitors Airtel Bharti and Vodafone bring down their original prices. This is a big change for these companies considering the fact that they were not even offering free SMS facility to their users. The prices of their schemes have come down to as low as a Rs. 98 plan with 4GB data (4G/3G/2G), 250 minutes daily Local/STD calls, and 100 SMS a day, valid for 28 days (Airtel).[13]

MODI: FACE OF RELAINCE JIO

PM Narendra Modi is a master at putting his own spins to things and how they should be. His speeches and public addresses have always been about how his plans and actions are for the welfare of the 1.2 billion people of his country. But his actions have always felt a little opposite to what his speeches mean.

On September 2, 2016 readers of the national dailies, The Times of India and The Hindustan Times woke up to a cover page advertisement for Reliance Jio with PM Modi’s picture, wearing a blue jacket. The advertisement spelled the words- “Jio: Digital Life” along with ‘dedicated to India and 1.2 billion Indians’ in bold.

The advertisement also carried a message for the readers, “In the journey of time, there comes a few life changing moments. Our honorable Prime Minister’s inspiring vision of a Digital India is one such movement. Jio is dedicated to realizing our Prime Minister’s Digital India vision for 1.2 billion Indians. Jio Digital Life will give the power of data to each Indian, to fulfill every dream and collectively take India to the global digital leadership…”[14]

This advertisement was caught in a storm of questions from people all around the country. According to the Emblems and Names (Prevention of Improper Use) Act, 1950, Notwithstanding anything contained in any law for the time being in force, no person shall, except in such cases and under such conditions as may be prescribed by the Central Government, use, or continue to use, for the purpose of any trade, business, calling or profession or in the title of any patent, or in any trade mark or design, any name or emblem specified in the Schedule or any colorable imitation thereof without the previous permission of the Central Government or of such officer of Government as may be authorized in this behalf by the Central Government.[15]

This advertisement attracted people towards the flourishing camaraderie between PM Modi and Mukesh Ambani. People lashed out at Ambani for using PM Modi’s photograph to promote a product, and criticized Modi and the central government for turning a blind eye towards the advertisement.

After all the attention and debates that the ad drew, Minister of State for Information and Broadcasting Rajyavardhan Singh Rathore responded to the controversy in a written response which stated that the Reliance group will be fined for Rs. 500 for using PM’s photograph and cleared the air on the fact that the government was well aware of the advertisement. However, the response also mentioned that the PMO had not given Reliance the consent to use the picture to promote Jio.[16]

One big question that this controversy left people asking was the fact that how a private organization like Reliance had the confidence to use PM’s image to promote their product without PMO’s consent and faced zero implications?

JIO AND DEMONITIZATION

The launch of Jio and the onset of demonetization happened almost around the same time of the year and both created huge impacts on the Indian telecom industry and economy respectively.

On November 8, 2016 at 8o’clock in the night, PM Narendra Modi addressed the Indian audience with the shock of their lifetime when he announced that 1000 and 500 rupee note will no longer be considered legal tender. The move was aimed to filter out the flow of black money from the Indian economy and help in eradicating corruption, all at once.

The outcome was however opposite of what was expected. The decision created chaos and panic in the country with people fleeing to the banks and ATMs to ensure they have some amount of money that is valid. As days went by, the market went broke with no cash flow in the ATMs or banks to help people in need. The execution of the move was very poor and created endless problems for the common man.

The question now is how does demonetization and Jio relate to each other?

Narendra Modi and Mukesh Ambani have formed quite a friendship over the years that Modi became India’s prime minister and a lot of Modi’s flagship programs have always seen support from Mukesh Ambani (Make India Digital-Reliance Jio) and his associates. The timeline of demonetization has seen a crossover with Jio’s apparent free offers to help out people and execute the idea of cashless India.

Reportedly, few days before demonetization, Jio announced that it will install micro ATMs and help merchants to get to know the app Jio money. As a result, the customer can have an e-wallet. The joint venture of Jio Payments Bank Ltd, set between Reliance and State Bank of India was also incorporated two days before demonetization was announced.[17]

Jio also announced during the same time that new user signing up for the service can enjoy free calls and data till the end of March 2017. Also, the existing users will also continue to enjoy free services for another four months.

Observing the timeline, opposition believes that the central government used Jio as a distraction from the crisis that was demonetization. The sound of exciting offers and heavy promotions by leading celebrities ensured Jio remained the talk of the town despite all the problems that were surfacing every day for people due to demonetization and lack of cash in the market.

MUKESH AMBANI AND INDIAN MEDIA

India is a country with a population that is diverse, heterogeneous, and complex. The people like to keep themselves informed on the day to day news. Currently, India has over 892 permitted private satellite television channels in India as of September 2018. [18]

But a recent change in dynamics of the media has sent shock waves around the nation. Apparently, most of the news channels intend to have a ‘right’ opinion. Media houses have come under a lot of flak from the audience for showing just one side of the story instead of a non-biased coverage. A lot of the times, the channels have been observed to favor the government. This wave of politically correct news has been on a rise.

Media organizations that convey the other side have been slapped for multiple defamation charges such as NDTV that has been sued by Ambani for Rs. 1,000 crores for their coverage on Rafale deal. This year also saw the murders of journalists like Gauri Lankesh who wrote an article criticizing the government. The ‘Freedom’ of Indian Media has all of a sudden taken over by a certain control in order to survive.

As one digs deeper in this matter, the question of media ownership and bias arises. Who owns the media? Why is media biased? Why is independent journalism endangered? Why do journalists fear the corporates?

Media ownership structure and news coverage are built overtime and there is a need to understand the bias they have. Whenever media bias is taken into consideration, agenda setting also role plays.

In the case of Jio and Modi government, Ambani owns 51% of NDTV[19], Network 18, 51% of Viacom 18 Media Pvt Ltd [20] and shares in Hindustan Times[21]. Apart from these companies, a number of politicians from the Modi government owns various shares in different Media organizations.

This ownership leads to a bias in the kind of news coverage that is done while the topics are addressed in the media. As a result, the analysis often favor the government in power.

CONCLUSION

The media bias and support for the corporates in friendship with the current government in power leads to corporatization. Although it seems beneficial in the first glance, the problems that it leads towards are more deep rooted.

Agenda setting to address the minds of the audience in the favor of the gamble is a huge risk towards expression and opinion of people. If every argument will have just one side, how is that different from a judgment or a statement?

The power-suited corporates use the government as a ride towards holding the control in major sectors of the country which means they have the power to turn the direction of growth and development into the roads more suited for them.

Reliance Jio is a government-corporate nexus and it will take no reading between the lines to understand the power play in this case.

Mukesh Ambani’s hold in the media, Modi’s charm among the people and the consumer who is unable to form a decision, every aspect helps this conglomerate to function and piece together as a complete puzzle.

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