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Will Reliance Jio make SIM cards available for buying under an invite system?

JIO1Many fans who were hoping to buy Reliance Jio SIM cards on January 1 were left disappointed to learn that the company’s 4G launch was only for employees as of now.

UPDATE: Jio has decided to go for an invite system by bundling SIM cards with LYF 4G phones. They will be available in the first week of February.

The reason for restricting the initial service to employees was primarily to ensure that its network would be able to withstand the pressure of a full-scale commercial launch and would not embarrass the company. According to sources, Jio is very keen to get its ‘first impression’ right and didn’t want to sell SIM cards without making sure that its service will go as expected.

“They want the first 3-4 lakh users to make maximum use of the network and subject it to as much abuse as they can, so that they can get an idea of how robust it is,” said an industry observer.

In addition, key software pieces such as billing need not be involved for such testing.

Reliance Jio is giving around 4 SIM cards each to its distributors, partners and the employees of the Reliance Industries group. These cards carry no restrictions on use and the ‘testers’ are encouraged to use as much data as possible to ensure maximum testing and load.

However, many in the industry still feel that a sample size of 3-4 lakh will not give a true picture what will happen when the actual commercial launch takes place — expected to be around March this year.

“Bharti and Vodafone add 15-25 lakh users per month.. and we’re talking about a total test size of 3-4 lakhs,” said an official with a rival operator.

Reliance Jio started deploying its network about two years ago, and is still in testing stage. In contrast, Idea Cellular started its LTE deployment only around six months back and has already launched in 75 cities.

“The primary difference between us (incumbent operators) and Jio is that when we are launching 4G, it is to an already existing and tested network, while Jio’s network is totally untested and built from ground up,” he added.

reliance-jio-sim-card-buyThe industry consensus is that Jio is likely to do a full public launch, including open availability of SIM cards, in March or maximum by Apr 1. The company has already committed to having its service running at the beginning of the next financial year, or April 1.

INVITATION SYSTEM

Many believe the company could take a leaf out of the playbook of brands like Facebook, Yu Televentures and OnePlus, which use an invitation system to overcome the challenges of scaling.

In fact, the invitation system is key to the success of Yu Televentures and OnePlus as it helps the companies keep costs under control while managing customer expectations.

Without the invite system, the customers of the above companies would have been disappointed with service quality as there is no way that OnePlus or Yu could offer phones at current prices without putting in place huge manufacturing set-ups. (Price are low because the rate of manufacturing commitment is low. Low-scale operations enables the company to stretch out the manufacturing over a longer period and recover its costs effectively.)

Typical network services, such as Gmail and Facebook, have also successfully used the invite system to keep network use under control and maintain uniform service quality.

Industry players believe that Reliance Jio too could adopt such a system, at least for a period of three to four months to ensure a smooth rollout.

“An invite system would make more sense for two reasons — one is that it does not make consumers feel left out, and second is that you can choose to give the initial SIMs to tech-savvy consumers who will help you really test your network,” pointed out a marketing consultant.

“But most important is the first factor, where consumers feel that they stand to get invited to join the network soon. In the world of technology, beta testing using tech-savvy, early-adopters is the norm. There are many who wouldn’t mind facing the occasional glitch if they gain early access to the network.”

In addition, it will also help Reliance Jio avoid a ‘Day 1 shock’, when millions of consumers join its network on Apr 1 or whenever the public launch (with full SIM card availability) takes place.

“Networks — whether telecom services or websites — are not designed to go from zero to 1 million in a week,” pointed out another industry veteran.

However, for now, the telecom operator is keeping all its cards close to its chest and has not announced what its mode of roll-out of commercial services will be.
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