Jio Phone: where business meets socio-capitalism meets government

With Jio Phone, some say, is born India’s Steve Jobs. On July 21, Mukesh Ambani, facing a crowd of thousands of Reliance shareholders, broke with Indian corporate tradition to announce the launch of Jio Phone. So what if Jio Phone is cursed with two alphabets too many to ever become the iPhone? India’s most powerful businessman made sure the stage was big, and the whole nation sat up and took notice. This was starkly reminiscent of Jobs’ launching of the iPhone and other Apple products.

And that’s where the similarity between Ambani and Jobs ends.

At the launch of the iPhone, Jobs, clad in sneakers, strolled on to the stage and paced around excitedly as he pitched the technical superiority of his product to each individual consumer.When Ambani, suited up for the occasion, announced and spoke at the launch of Jio “intelligent” Phone, it would have been easy to mistake him for a political leader making an electoral pitch around his party’s role in the resurgence of the country.

The difference in the two speeches speaks volumes about the societal make-up,the corporate culture as well as the relationship between the private and public sector in their respective nations, India and the United States.

Sample some of Ambani’s statements:

“Sadly, a vast majority of mobile users in India are starved of data. This digital disempowerment and unfairness must end. Jio is committing to end it today.”

“JioPhone along with Jio’s disruptive tariff will unleash the power of Digital Life in the hands of 1.3 billion citizens of the largest democracy in the world.”

“Now, Jio will democratise the digital culture in India. Jio will be the greatest accelerator of the Bharat-India connectivity.”

“Reliance is also the highest income-tax payer in the private sector in India.”

Referring to the PM on five different occasions, Ambani piggybacked on India’s most influential political figure, just like a lot of Indian politicians do. An example:

“We have invested over Rs.2 lakh crore in our digital services and we are the largest contributor to the ‘Digital India’ vision of our Honourable Prime Minister.”

The messaging about pricing was contrasting as well. Ambani — like a politician giving subsidies — emphasised that Jio Phone was available for “an effective price of zero”. Jobs, listing the prices of the multiple functionalities in his product, said, “We’re gonna price it at that same $499. No premium whatsoever. $499.” It is also pertinent that unlike Ambani, Jobs made no mention of the various ‘easy-buy schemes’ for iPhone.

The differences are stark. Jobs, the unapologetic capitalist. Ambani, the patriotic socialist.

Obviously, it would be naïve to take those differences at face value. Ambani puts on the veneer of patriotism and socialism for two reasons, as I see it. One, to please his target audience. Two, to please the government.

The first reason jumps out. India is a highly price-sensitive market, where people can hardly afford a groundbreaking product like the iPhone. To add to that, decades of government handouts have led to entrenched socialism, which even the capitalists must pay lip-service to.

The second reason is far more sinister, and reveals a bitter truth about doing business in India. Despite great progress, India continues to be a tightly-controlled economy — especially in sectors such as telecom and power — where currying favour with the government, still India’s biggest business entity, can ensure big and lasting profits. In order to survive and succeed, the government must be pleased by all and sundry. Reliance has been a major beneficiary of this system.

The speech’s stress on social upliftment, tinged with patriotism, sends out a message to the government that Ambani is aligning Reliance’s goals with its own, which therefore makes his company the only deserving private partner for mega government schemes such as Digital India. Similarly, Jio Phone is not intended to be a revolutionary product, but only a hodgepodge that helps fulfil the government’s cherished dream of universal internet connectivity.

Some would argue that certain reasons — Jio’s India-centric focus as opposed to the iPhone’s global focus, the alleged closeness between Reliance and the current government, and the absence of similar tendencies in other Indian corporates — make this event unique and that should be enough to allay the fears cited above. These consolations are red herrings.

American and Western European companies who are focussed on their respective nations don’t pitch their products/services as national services to please their governments. Further, Ambani’s praise for the government has hardly anything to do with the current one, as even in previous AGM addresses, he has expressed similar sentiments. Other big Indian corporates such as HUL and ITC, too, make sure to pay due obeisance to the government through their annual reports and otherwise.

The dependence of corporates on the government is characteristic not just of India, but of most developing economies. A 2010 McKinsey survey of senior company executives confirms this. On almost all criteria, the respondents from India, China and Middle East/Africa were far more concerned about the government than those in U.S. and Europe.

‘The government has no business being in business’ is a cherished ideal. Corporate speeches will be a leading indicator of India’s move towards that ideal.