The rise of Reliance Jio amidst lockdown

It all began when Isha Ambani, the daughter of India’s multi-billionaire Mukesh Ambani complained about the sluggish internet speeds at their house in Mumbai, being on a holiday break during her Yale college days.  

 

Out of that complaint was conceived the idea of a mobile services provider which facilitated the feature of both free voice calls while also bringing down data prices to a cheap economical rate.

 

Reliance’s Jio has emerged as the company whose approach stood far apart from that of a conventional telecom company that earned its revenue through selling SIM cards. Recently, as reported by Business Today,  Reliance Industries, is now the world's 51st most-valued company by market capitalization with Mukesh Ambani, the Chairman and MD of the company stopping at nothing to make it flourish. 

 

“All of us, in a sense, struggle continuously all the time because we never get what we want. The important thing which I’ve learned is how you do not give up because you never succeed in the first attempt.” - Mukesh Ambani 

 

In fact, on the 23rd of July this year, Mukesh Ambani became the world’s fifth-richest person, replacing American Investor Warren Buffet from the position, as reported by Indian Express. As per the Bloomberg Billionaires Index, his net worth stands at $75 billion, making him the only Asian to find his place in the list of top 10 billionaires of the world. 

 

This article discusses the recent success of the network operator in the telecom sector, particularly in the past couple of weeks amidst the COVID period. 

 

 

All about Reliance Jio

 

"In the next three years, Jio will connect half a billion mobile customers, a billion smart sensors and 50 million home and business establishments,” -  Ambani at the 43rd AGM, as reported by the Economic Times

 

Reliance Jio Infocomm Ltd, commonly termed as Jio, is an Indian mobile network operator, owned by Reliance Industries with its main headquarters residing in Mumbai. Jio offers  4G LTE services, with its coverage extending to all 22 telecom circles in India and is so far the only VoLTE (Voice over LTE) service provider in the nation.

 

The service was launched on December 27, 2015. Currently, Reliance Jio has over 38.8 crore subscribers.

 

In August 2017, the company launched its feature phone termed JioPhone to reach the section of the masses which could not afford smartphones to access Jio's LTE network. By 2019, Jio offered its content apps like JioCinema as well as JioTV. The company also introduced fiber to home service in September 2019. The service provides facilities like home broadband as well as telephone services at pretty competitive rates. Alongside this, Jio has also set up Wi-Fi routers which are termed as JioFi.

 

Jio offers a wide range of applications which include JioChat, JioCinema, JioCloud, JioMags, JioMoney Wallet, JioSaavn, JioSecurity, Jio4GVoice, MyJio as well as JioMeet. 

 

Reliance Jio is presently one of the biggest telecom operators in India. The organization turned profitable in almost under 18 months of its launch. The company marked a record across the world in customer acquisition within a month of its commercial launch. 

 

 

The success of Reliance Jio

 

“The company’s success rides on the fact that RJio offered voice services free, while data pricing was very competitive and affordable. In addition, the geographical reach of its services was also commendable, while the network coverage and capacity have increased over these years,” - Rajan S Mathews, Director-General at Cellular Operators Association of India (COAI) as reported by BusinessLine.

 

Back in March 2015, towards the end of the financial year, barely nil earnings were generated for Reliance from their digital as well as retail businesses. This was all overturned by the launch of Reliance Jio in September 2016.

 

 

A technology platform organization

 

A lot of disruption was created by Reliance Jio once the platform emerged and offered its swift and agile 4G services which also consisted of free calls as well as economical data packages. The platform’s entry caused a great deal of havoc, forcing various rival operators to either exit the platform or merge with other companies, with namely three known names remaining on the battlefield, that of Bharti Airtel, Vodafone Idea and Reliance Jio. The platform has achieved the top position when it comes to the market share, holding over 388 million subscribers. 

 

Further adding to its supremacy, as I mentioned above the platform also introduced fiber-to-the-home high-speed connectivity. Presently,  Reliance includes TV channels as well as cable TV operators that administer content through Jio. Likewise, its physical retail network is being affiliated and boosted online.

 

Jio’s technology umbrella now extends to involve broadband services, smart devices, cloud and edge computing, big data analytics, artificial intelligence, internet of things (IoT), augmented and mixed reality, and blockchain, with the platform gradually and consistently revolutionizing itself as a technology platform organization.

 

 

Revolutionizing the Digital Future

 

Reliance Jio has been driving the industry's development into the area of e-commerce, payments as well as online entertainment. For instance, its arrangement with Facebook gives Jio Platforms access to WhatsApp as the channel to propel JioMart, its digital commerce platform. With the enormous base of users that Whatsapp holds Jio intends to use its popularity to make the Whatsapp users reach its nearby stores. JioMart has now been extended to 200 cities which also includes all metros. 

 

This also complements the Government of India’s emphasis on digital payments, particularly with mobile payment, which is an integral part of the Digital India mission. 

 

Recently, as reported by Indian Express, Reliance Jio has created and developed an entire 5G solution from scratch which will be prepared for trials once the 5G spectrum is available and can be ready for field deployment in 2021.

 

 

Jio’s funding during lockdown

 

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Companies which have recently funded Reliance Jio

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About 12 investments have been made on Jio’s platform during the recent COVID period. Below is everything you need to know about the company's fundraising journey during this period : 

 

• April 22: It all started when the social media giant Facebook announced an investment of Rs 43,574 crore in the Jio platform, which would account for a stake of about 9.99% in the firm. 

• May 3: The American private equity (PE) giant, Silver Lake has made an investment of Rs 5, 656 crores in the Jio platforms giving it a stake of 1.15% in the firm.

• May 8: The US-based private equity firm, Vista Equity has made an investment of Rs 11,367 crores in the Reliance Jio firm giving a stake of 2.32% in the platform. 

• May 17: The New York-headquartered PE firm General Atlantic announced an investment of Rs 6,598 crore in Reliance Jio for a 1.34% stake.

• May 22: The US-based PE company KKR has made an investment of Rs 11,367 crore in the Reliance Jio firm, giving it a stake of 2.32% in the platform.

• June 5: The Abu Dhabi-based sovereign investor Mubadala announced an equity infusion of Rs 9,093 in Reliance Jio on Friday in exchange for a 1.85% stake in the platform.

• June 13: The American investment company TPG made an investment of Rs 4,546.80 crore in Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore.

• June 13: One of the world's largest consumer-focused private equity firms, L Catterton, will also invest Rs 1,894.50 crore in Jio platforms in exchange for a 0.39 % equity stake in the platform on a fully diluted basis.

• June 18: Jio Platforms announced that it will receive an investment of Rs. 11,367 crores from Saudi Arabia's sovereign wealth fund Public Investment Fund (PIF) for an equity stake of 2.32 %

• July 3: Reliance Industries stated that it will receive an investment of  ₹1,894.50 crores from Intel Capital by selling a small stake in its technology venture.

• July 12: Reliance Industries Limited and Jio Platforms Ltd. announced that the world's leading wireless technology innovator Qualcomm is investing up to ₹730 crores in Jio Platforms for 0.15% stake in it. 

• July 15: The most recent funding to the Jio platform was received from Google. The tech giant has stated that it will invest Rs 33,737 crore for a 7.7 % stake in Jio platforms post all regulations being met. 

 

Conclusion

 

Leaving no stones unturned when it comes to gathering funds to head towards a stable 5G future, Reliance Jio is confident regarding the success of the technology which will face an extensive rollout in the upcoming years.

 

Seeing the consistent success of the telecom operator in the present scenario, Jio is well-positioned to be an exporter of 5G solutions to global telecom operators in the future, as an entirely managed service as per the company.