Reliance Jio initial investment at Rs150,000 crore: Mukesh Ambani
Mumbai: Reliance Industries Ltd (RIL) chairman Mukesh Ambani Wednesday described his phone company as the world’s largest start-up, entailing an initial investment of Rs.1.5 trillion.
The figure is far higher than the around Rs.85,000 crore RIL, in April last year, said it was investing in Reliance Jio Infocomm.
Reliance Jio is set to launch its 4G mobile phone and digital services in the second half of 2016.
In December 2015, RIL offered employees up to four Jio connections each, free of cost, to test its services.
Ambani said the trend of digitization and the desire to end India’s “digital poverty” led to the creation of Jio, as the brand is known.
“To my mind, digitization is the defining trend of this century; in fact, that is the very reason we at Reliance conceived Jio,” Ambani said in his keynote address to Ficci Frames conference on the media and entertainment industry. “Jio is one of the largest transformational digital initiatives anywhere in the world with an initial investment of more than Rs.150,000 crore. It really is the world’s biggest start-up,” Ambani added.
RIL has previously pegged the investment figure for Reliance Jio at $14 billion (about Rs.85,000 crore). The money has been pumped into setting up telecom infrastructure, such as telecom towers, fibre optic cables and purchase of spectrum, said executives from RIL at an analysts conference on 17 April 2015. “Rs.1.5 trillion is the peak investment that would be required in the Jio business over the next 3-4 years,” an analyst at a domestic brokerage firm said on condition of anonymity, adding that it would likely include investments already made and to be made.
Ambani said that Jio will help India become among the top ten mobile broadband markets in the next few years, ending the country’s digital poverty as the world goes digital.
“Today, India is ranked 150th in the mobile Internet access rankings out of 230 countries in the world. We have the responsibility to digitally empower India. To end this digital poverty, 1.3 billion Indians cannot be left behind as world enters a new era,” Ambani said.
“We have one of the youngest populations in the world. Give them the skills, give them the tools and the environment, they will surprise and support. It is this opportunity to transform the lives of our 1.3 billion Indians that motivated Reliance to enter and transform the entire digital ecosystem and Jio is the result. I have no doubt that with the launch of Jio, India’s rank will go up from 150 to among the top ten mobile Internet access (markets) in the world in the next few years,” he said.
Ambani listed four key interventions—coverage, quality, data and affordability—in order to achieve this.
“First is through the coverage. Coverage refers to mobile internet access no matter where you are in India. Currently the coverage of high-speed mobile internet in India is only 15-20%. The comparative figure for the US is 75% of its population. Jio will start its services with 70% coverage of the Indian population from day 1. I’m sure with all our industry partners and the efforts Jio is making India’s high speed mobile coverage will be over 90% by the end of year 2017.”
Ambani further said, “Second, is through quality which refers to the speed and strength of mobile broadband. From day one, the Jio mobile broadband will offer speeds that are 40-80 times faster than the current speeds we see.
“Third is through quantity and capacity of data available for consumption for ever consumer in India. Currently the data consumption for an average Indian is 0.15 GB per annum. Jio’s network is engineered to provide a capacity of over 10 GB per user— that is nearly 100 times more than what he/she is using today.”
He mentioned affordability as the fourth key factor to make India digitally active.
“Fourth is to make this very, very affordable. All of this is of no use is we cannot make this accessible and affordable to consumers in all parts of the country. Jio will significantly up the quantity, quality and coverage not by a factor of one or two, but as I explained technology allows us to improve this by a factor (of) 80-100. This initiative is our small and humble contribution to the honourable prime minister’s vision of digital India,” said Ambani.
Ambani also spoke about what consumers can expect from Reliance Jio.
“Jio is not just a telecom network, it is an entire ecosystem that allows Indians to live the digital life to the fullest. This ecosystem consists of devices, broadband, powerful applications and services distributed to every doorstep in India. Jio’s media offerings will include the most comprehensive library of programming of live and recorded music, sports, live and catch up television, movies and events.... Jio is about unleashing creativity and connected intelligence through the smartphone.”
Ambani also listed the major future trends of the digital world.
“The first is that world is moving from orality to visuality. Images and video will rule in the digital world. And video will be the new voice for some of us in the network industry. And thanks to Jio, India will have one of the most powerful and comprehensive video networks in the world. This transformation from voice to video driven by the network will be available in every city and village in India.
“An affordable video network has the power to change how we learn, play, communicate and entertain. Affordability changes everything—it brings millions to a new platform. Let us get used to video being the new voice,” he said.
“Second, it is important to understand that digital technology is exponential. Any exponential change will create large opportunity. The world is graduating to a telemedia world. Earlier, telecommunications, media and entertainment, TV and broadcasting used to be more or less separate industries. Telcos used to focus on infrastructure and networks and entertainment companies focused on content production and distribution.
“There were different players for the large screen, the movie industry, for the small screen the television industry, for the non- screen the movie industry. Now, as mobile broadband is engulfing the world, telecom and ICT and various media sectors are converging. We are all part of a telemedia future, the rules of the game have changed. The model will shift from ownership to digital access,” Ambani said.