Does CAC and RoI really matter when the opportunity is big?
Reliance Jio, which its commercial launch on September 5, 2016, disrupted the Indian telecom industry with its ‘Welcome’ and ‘Happy New Year’ offer, with its free voice and data services along with access to its digital content ecosystem for 15 months. It could thus add a whopping 100 mn subscribers in a matter of 170 days.
What about competition watchdog CCI? In fact, CCI rejected Airtel's plea of "predatory pricing" by Jio and said that in a competitive market scenario, where there are already big players operating in the market, it would not be “anti-competitive for an entrant to incentivise customers towards its own services by giving attractive offers and schemes.”
Such short-term business strategy of an entrant to penetrate the market and establish its identity cannot be considered to be anti-competitive in nature and as such cannot be a subject matter of investigation, CCI said.
With the free-mium model, Reliance Jio achieved two things - Captured major share of market within no-time and forced competitors to bleed by forcing them to slash tariffs.
So, now you know how to build a big startup not only to last but also to kill (competition).
No comments:
Post a Comment