He is India’ richest man and one of the richest in the world. Mukesh Ambani is also the head of one of India’s biggest business conglomerates and seems to have his finger in every pie from oil to energy to entertainment to retail to telecom. He is now eyeing the online retail space which according to experts has huge growth potential; "like a galaxy expanding" right now. Mukesh Ambani also plans to rope in the common or garden neighbourhood store in his quest. Is this going to be good for us? After all, there are reasons why there are anti-monopoly laws in place.
The Jio network which launched three years ago, completely transformed the telecom space. It promised free calling for life and free data to begin with. It is one of the biggest ever disruptions in the space, and smartphone and internet penetration and usage expanded exponentially.
Suddenly everyone had access to the internet and this forced other telecom companies to slash their rates drastically. The consumer benefited of course; as did Ambani’s Jio. Within the first month of launch, the service had 16 million subscribers. By February 2019 the number of subscribers crossed 100 million. This created cutthroat competition and plummeting prices in the telecom sector but many believe that this also led to increased call drops and a marked fall in the overall quality of telephony.
Also, Ambani has publicly claimed to pushback against global corporations exploiting the data of Indian users. He was quoted as saying that "Data colonization is as bad as previous forms of colonization," last year. However, there is enough evidence of his own corporations doing the same - Jio Music’s data mining for instance.
In keeping with the nationalistic tone that Ambani seeks to maintain, he has now said that he will be taking on Amazon and Walmart for control of the online retail space. As part of a pilot project, small neighbourhood kirana stores and pharmacies have been offered small devices by Reliance. These can swipe debit cards and credit cards, manage inventory, manage orders, process rebates and so on. Sources claim that Reliance will be making a big announcement in this connection around Diwali.
There is no doubt that the groundwork for this is already in place with as many as 331.3 million Jio subscribers (figure reported by June 2019). It is no accident that within just three years, Jio has become the biggest telecom service in India. It is a part of Ambani’s grand design – sound business sense and clinical efficiency have ensured this. Surely more organisation and better prices can only be good for us the consumers?
Game of Phones
Since the times of Dhirubhai Ambani, the Reliance corporation has been known to influence state policy. The business family has also been very careful of positive image management and is careful to be seen supporting traditional values. The political clout of the Ambani’s and their proximity to the power centres – regardless of party and ideology – were always thought to be among the main reasons for the phenomenal, meteoric corporate success. Recently there were whispers that there may be more than meets the eye with regard to the recent change in government policy that forced Amazon to restructure their business model. Conspiracy theorists feel that Reliance is the reason behind state-owned telecom company BSNL’s recent slide and thousands of potential job losses. While these may all be conjecture, there is enough evidence to demonstrate the ability of the Ambanis to ‘intervene in regulatory matters’ and the huge resultant advantage in matters of policymaking.
At the end of the day, no market monopoly can possibly be in favour of the consumer. Market competition is healthy – it offers us more options and helps maintain fair prices and quality products. Right now, we may know little about Mukesh Ambani's Grand Design. However, according to industry pundits, only one corporation is geared to deal with the economic slowdown as well as the predicted explosion of online products and services in years to come. That corporation is Mukesh Ambani’s Reliance Industries. The possibility of one corporation dominating, crushing the competition, wielding political clout and making the rules ---- this is not a pleasant prospect.
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