Can Vodafone & Idea check Jio?

Vodafone & Idea have come together to give birth to India’s largest & world’s 2nd largest telecom provider – Vodafone Idea Limited.

Is largeness – a feature to be brandished? Yes, because it serves as a ‘social’ proof.

People rationalise that if it is India’s largest & world’s 2nd largest than it would have many subscribers & so many subscribers cannot make a wrong choice.

This thinking assuages anxiety & gets current subscribers to believe that they have taken the right decision to be with the service provider; it also gives confidence to non-users to come on board.

Is ‘largeness’ an enduring strategy for maintaining an enduring competitive advantage? Of course not! For that the new entity should provide value to their subscribers’ else gradually they will cede their leadership position.

Can this new entity sufficiently transform to provide value to their large base of subscribers? Seems difficult, because they are legacy business whose business model is based on providing service to subscribers & charging them for it.

Reliance Jio – the newest entrant – has no such baggage & has conceptualised a business model built around offering a large part of its service free!

Then how will Jio make money? By collecting data & monetising it!

Bottom-line: Data is the new oil – nor largeness or size. Unless legacy business transforms they will find themselves at the receiving end from new age companies who enter the market with disruptive business model.