CASELETS

Mini Cases in Marketing Management

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Impact of Misleading Advertisements

The Case of Airtel's Abortive Attack on Jio's 4G

Introduction to Indian Telecom Industry:

India is currently the world's second largest telecommunications market and has registered strong growth in the
past decade and half. The industry is driven by strong adoption of data consumption on handheld device. The
total mobile services market revenue in India is expected to touch US$ 37 billion in 2017, registering a
Compounded Annual Growth Rate (CAGR) of 5.2 per cent between 2014 and 2017, according to research
firm IDC.i By the end of 2016, total mobile subscriber base in India is1,078.42 million. ii Various players like
Airtel, Vodafone, Idea, Reliance Communications (Anil Ambani's), Aircel, BSNL are the chief players in the
industry. However, with the foray of Mukesh Ambani's led Reliance Jio (formerly, Reliance Infocomm) the
wireless and broadband sector the industry is disrupted to an extent which paved paths for consolidation in
Indian telecom market.

Reliance Jio:
Reliance Jio Infocomm Limited, or Jio, is a LTE mobile network operator in India. It is a wholly owned subsidiary
of Reliance Industries headquartered in Navi Mumbai, Maharashtra that provides wireless 4G LTE service
network (without 2G/3G based services) and is the only 'VoLTE-only' (Voice over LTE) operator in the country
which lacks legacy network support of 2G and 3G, with coverage across all 22 telecom circles in India.iii The
services were first beta-launched to Jio's partners and employees on 27 December 2015 on the eve of 83rd
birth anniversary of late Dhirubhai Ambani, founder of Reliance Industries,iv and later services were
commercially launched on 5 September 2016.

The company had unveiled details of Jio's fourth-generation (4G) services on 12 June 2015 at RIL's 41st
annual general meeting and launched its 4G broadband services throughout India on September 2016. It
offered data and voice services with peripheral services like instant messaging, live TV, movies on demand,
news, streaming music, and a digital payments platform.

Airtel
Airtel India is the largest provider of mobile telephony and second largest provider of fixed telephony in
India, and is also a provider of broadband and subscription television services. Airtel operates in all telecom
circles of India. Airtel is the largest operator in rural India, with 256.80 million subscribers as of July 2016v.
Airtel launched 4G services on mobile from February 2014. The first city to get the service was Bangalore.
Airtel has started their 4G services in Haryana on 16 June 2015 Airtel 4G trials has been started in Delhi from
18 June 2015. Airtel had 1,20,000 4G subscribers as of May 2014. As of March 2016, Airtel provides 4G
coverage in 350 cities in 15 circles. Airtel extended its 4G network to 15 km off India's coastline, following a
request by the Indian Navy.vi

On 3 November 2016, The Economic Times reported that Airtel had awarded a 402 crore (US$60 million)
contract to Nokia to implement Voice over Long-Term Evolution (VoLTE) technology on the operator's network
nationwide. Airtel had previously awarded a smaller contract to Nokia for trial of VoLTE technology in select
circles in early 2016. Airtel subscribers will be able to place VoLTE calls in areas covered by LTE. If LTE is not
available in the area, the call will fall back to 3G or 2G. Airtel is expected to launch VoLTE services in early
2017.

Prepared by M. Sandeep Kumar, Associate Professor & Soft-Skills Trainer, GIPS Nellore Page 1
Row Over 4G Speed
In the chase for higher market share and greater mind share, both the top players of Indian telecom, Airtel and
Jio started promoting their 4G services rapidly on their 'speed' plank, the speed with which the internet works
on their respective devices. Airtel, in its advertisements shouted big, throwing a challenge to all that their 4G
internet speed is the fastest of all networks in the whole India.

At one occasion, to counter the juggernaut of Jio, Airtel roped in the popular app, Speedtest and through this
app, their tried to display that their internet services are the fastest over any other. Reliance Jio has countered
by filing complaint against Airtel with the advertising watchdog, ASCI and sending a legal notice to Ookla.

TRAI's Report
In the mean time, to curtail the ongoing fight between the two telecom majors, the Telecom Regulatory
Authority of India (TRAI) entered into the picture and conducted a speedtest for all 4G service providers in
India.

In the test conducted by TRAI , the latest entrant to the telecom industry, Reliance Jio has surprised many as the
company achieved No. 1 position in download speed in the monthly tests. Jios average speed in February
almost doubled that of Idea Cellular (at No. 2) and Bharti Airtel (at No 3).vii Although the download speed of
Jio network declined marginally to 16.48 Mbps during the month from 17.42 Mbps in January, it remained the
fastest network during the month. At such as a speed, a user can download a movie in less than five minutes.
The speed of Idea was recorded at 8.33 Mbps and Airtel at 7.66 Mbps. These were also a marginal decline
in download speed as compared to their performance in January. Speeds of companies such as Vodafone and
BSNL also dipped marginally to 5.66 Mbps and 2.01 Mbps from 6.13 Mbps and 2.89 bps, respectively. Also,
the download speeds of Reliance Communications, Tata DoCoMo and Aircel network were 2.67 Mbps, 2.52
Mbps and 2.01 Mbps, respectively, during February, TRAI report said. The TRAIs report is based on its
collection and computing of speed of mobile data from subscribers across the country with the help of
MySpeed application on a real-time basis.

The Result
Citing the results of its speed test, TRAI has asked the telcom major Airtel to modify or withdraw the commercial
by April 11 2017. Airtel, however, has contested the findings and Ookla too has responded to ASCI decision
saying that it fully stands behind the accuracy and reliability of the methodology.

Questions for Discussion:

1. Analyze Airtel's strategy in claiming itself as offering the fastest 4G services.
2. Why should a late entrant like Jio offer too many freebies?
3. What is the role of advertisement in taking on rivals? Are there any limits?
4. How could TRAI's report on internet speeds affect Aritel's business?

i
https://www.ibef.org/industry/telecommunications.aspx
ii
http://www.trai.gov.in/sites/default/files/Telecom%20Sub_Eng_pr.03_09-01-2017_0.pdf
iii
http://www.coai.com/content/reliance-jio-infocomm-limited
iv
http://indiatoday.intoday.in/technology/story/jio-opens-mobile-number-portability-urges-incumbent-telcos-to-fulfil-
regulatory-obligations/1/755904.html
v
http://www.trai.gov.in/WriteReadData/WhatsNew/Documents/Press_Release_No.97_Eng_07_10_2016.pdf
vi
http://telecom.economictimes.indiatimes.com/news/4g-lte-how-reliance-jio-airtel-vodafone-idea-cellular-aircel-stack-
up/51357478
vii
http://www.thehindubusinessline.com/info-tech/jio-pips-rivals-in-trais-download-speed-test/article9613835.ece

Prepared by M. Sandeep Kumar, Associate Professor & Soft-Skills Trainer, GIPS Nellore Page 2