1.

How has the advent of Reliance Jio impacted the growth of Internet consumption in India and
what future scenario can be depicted.

Ans. The launch of Reliance Jio’s 4G telecom services in September 2016 helped spur the digital
economy in India as it propelled internet usage in the country, with fast, reliable, and cheap 4G
services leading to significant growth in data usage (especially on music and video content).

The growth in internet users in India was driven by cut-price data plans introduced by Reliance Jio
Infocomm Ltd and cheaper smartphones. Jio’s free voice call and cheap data plans have helped
double data usage in a year. With the growth in Internet services and increasing appetite for social
media, mainly, Facebook, Instagram, and WhatsApp (both of which were owned by Facebook),
Internet had become an essential part of life in India

India is poised to have over 900 million internet users due to the increased penetration of affordable
smartphones and cheaper internet plans and would also have around 2.1 billion internet-connected
devices by 2023. While Mukesh Ambani’s Reliance Jio brought telecom services revolution in India,
the coronavirus pandemic will give a further push to digital adoption in the country as more and
more people take to e-commerce to buy products.

Further, as more enterprises begin colocating their environments and utilizing data center
virtualization to cut costs and streamline workflows, the more network demand there will be to
ensure that data can be transferred seamlessly between data center and business locations. As well,
the sheer amount of data being stored in data centers globally will result in a heightened need for
increased network capacity and internet consumption.

The more connected devices that hit the market, the greater the demand for increased bandwidth.
Both consumer and enterprise cloud usage will impact bandwidth demand in the future as more
data and applications are allocated to the cloud.

Rural markets in India, particularly tier-II and tier-III are driving the next phase of growth for internet
usage. The sudden expansion in 4G offerings by telecom operators has led to rural India’s adoption
of online video streaming and social media presence. With adoption of regional languages, the
penetration might get accelerated.

2. Should Jio Platforms aggressively pitch for 5G adoption in India? How will it benefit the
company?

Ans. Yes, Jio Platforms should aggressively pitch for 5G adoption in India. With changing connectivity
needs and rising mobile data traffic, a new category of connected-ecosystem products has emerged.
Today, there is a need for networks that provide higher data speeds at low latency and enhanced
throughput to handle more simultaneous connections without causing significant disruptions. 5G is
supposed to be the answer.

The marketplace creates a one-stop shop for the ecosystem of buyers and suppliers and therefore
requires a seamless customer experience. RIL have an opportunity to move beyond providing just
connectivity via 5G to become ecosystem curators and enablers of many different verticals from
smart cities to connected cars, the industrial internet of things (IoT)and more.

Jio Platforms can use its own 5G network technology and not necessarily rely on third-party network
equipment. If successful, Jio will be the first Indian player to build its individual 5G design and
technology in the country. The first mover advantage will solidify its position as market leader in the
5G enabled ecosystem. This will help place a strong foundation for offering platform-based digital
services.

Digital platforms will be a key driver in monetizing 5G – as everything from households to hospitals,
cars, consumer goods and farming become connected. The rollout of the digital commerce initiative
will open further growth opportunities for the organized retail business, leveraging the strength of
consumer and digital platforms.

Telecom operators Bharti Airtel, Reliance Jio and Vodafone Idea also have submitted their
applications for 5G trials. Airtel has joined hands with Huawei, ZTE, Ericsson and Nokia for 5G trials
in the country, while Jio has partnered Samsung. Vodafone Idea has partnered Huawei, ZTE,
Ericsson and Nokia. Amid security concerns Huawei might not be the best 5G gear company to
partner, for the competitors although India has not barred it.

Reliance on the other hand has emerged as the first Indian telecom major to seek 5G trials based on
self-designed technology. This reduces its dependence on Samsung and protects from uncertainty
of partnership with companies like Huawei, manufacturer of network equipment for 5G services,
who have come under scanner of for its close ties to Chinese Govt., cyber-espionage and threat of
cyber-attacks on Huawei devices.

3. What should Reliance Jio do to repeat its success in the retail business in India and dislodge the
present incumbents Amazon and Walmart/Flipkart to be the number one in e-retail in India?

Ans. Reliance Jio is eager to dislodge the present incumbents Amazon and Walmart/Flipkart to be
the number one in e-retail in India. The company seems to be already making strategic moves for
the said purpose and there are lot more strategies that need to be adopted with agility and speed.
JioMart, Reliance's e-commerce venture, made its debut in early 2020. Carrying the tagline, “Desh
Ki Nayi Dukaan”. Through JioMart, RIL is offering local merchants offering an O2O (online-to-offline)
marketplace. This business model was pioneered by the Chinese e-commerce giant Alibaba Group
Holding Ltd. Under the O2O model, a consumer searches for the product or services online but buys
it through an offline channel.

The policy in India is on Reliance’s side. Unlike Amazon or Walmart/Flipkart, homegrown Reliance
doesn’t have constraints around restrictions on FDI in e-commerce. Reliance should leverage the
constraints the other companies have with respect to policy to its own advantage. The make in India
sentiment is currently very strong in political and social circles. Govt. is also more supportive of local
businesses.

Reliance Jio should continue its partnership with Facebook which will enable access to WhatsApp
user base and Facebook userbase. Capturing the user base of Facebook and its other allied
companies will lead to greater market share and access to established Ecosystem. Also, this creates
media buzz and other companies follow suit by investing in its shares.

The recent cash rich company can invest in upcoming technology like 5G to provide seamless user
experience which has been Amazon’s forte. The first mover advantage will solidify its position as
market leader in the 5G enabled ecosystem. This will help place a strong foundation for offering
platform-based digital services. To add to the user experience Payments system of blockchain
technology will further strengthen Reliance Jio’s position.

Rural markets in India, particularly tier-II and tier-III are driving the next phase of growth for internet
usage. Reliance Retail can reach the hinterlands of the country by putting together a framework of
expanding each store concepts across tier 2 and tier 3 cities and beyond to achieve market
leadership. It should continue to expand network in tier II and III cities in the country.

To cater to growing and diverse customer needs, Reliance Retail should continue to innovate and
partner with revered international brands to bring world-class products and services to Indian
consumers
Acquisition of smaller e-retail business will further consolidate its market share. The deals may be
tiny, but this will help in putting together a team of talented people by acquisitions, who can then be
invested in to build out larger platform products.

Reliance Jio should also leverage its pre-existing brick and mortar Jio stores to connect to its online
user via JioMart. Lastly, the company should keep constant track of new government regulations and
business policies related to retail, digital business and FDI to adapt and respond to changing
environment.

8.Is there a case for stronger engagement by CCI to scrutinize the Facebook Jio Deal? On what
grounds?

Ans. Yes, there is a case for stronger engagement by CCI to scrutinize the Facebook Jio Deal. The
primary driver of this transaction is the vast user and data bases of these companies and the
synergies which can be created by judiciously commercialising this data. It may be difficult to assess
the resources and market positions of the combining entities, especially in the technology sector via
traditional methods. However, if such an assessment is undertaken considering data as a relevant
metric for resources and economic power of the parties, the results would be very different. It is
now well accepted that data is a monetizable asset and a relevant factor to assess the market power
of an entity, especially in the digital space.

Many mature competition authorities (especially, the European Commission) are reconsidering their
current rules to define relevant markets and assess dominance in digital markets. From previous
data driven transactions, such as, Facebook/ WhatsApp and Microsoft/ LinkedIn, competition
authorities have learnt their lessons not to ignore the importance of data in competition law
assessments, despite the limitations of the existing legal framework.

Given that such a mega-transaction is subject to the scrutiny of the CCI alone, and that there is no
data-protection authority to monitor data abuses, it becomes indispensable that the CCI steps up to
the plate and meticulously scrutinises the transaction from the big-data perspective. Strong
network effects, high returns to scale and access to a huge amount of data may incentivise digital
firms to engage in anti-competitive conduct. So, there is a case for stronger engagement by CCI to
scrutinize the Facebook Jio deal.

But the key question is whether the CCI is equipped to deal with big data issues and if it would, in
fact, go beyond its comfort zone (traditional competition rules) to dig deep into the potential
adverse effects of such a mega deal. The CCI is required to balance the adverse effects of the
proposed transaction against its positive effects and ensure that the competition dynamics do not
get skewed in favour of the combined entity.

Facebook, in its application to the competition commission, argued that the deal does not alter the
competitive landscape in any relevant market. But Amazon and other retail giants have been
accused of exclusive arrangements with certain mobile phone brands, and preferential treatment
given to some sellers. E-commerce in India has come under intense criticism by local traders, who
blame the industry for anti-competitive activities such as deep discounting.

The regulators should seriously consider whether new parameters should be included in its
assessment criteria. Currently, some mergers and acquisitions escape the threshold for scrutiny even
if potential harm is evident.