We’ll be ready for 5G by 2020 – Reliance Jio

Reliance Jio owner Mukesh Ambani has stated India will be fully-4G by 2020, and is setting his eyes on the 5G euphoria already.

The statement of intent adds to a remarkable couple of years for Reliance Jio and the Indian digital economy on the whole. Starting from nothing in December 2015, Reliance Jio has risen to become arguably the most influential telco in India, dragging the country’s digital economy into the 21st century. A little over two years ago, India was in the digital baron lands, though now the Indian digital appetites are as insatiable as those in ‘developed’ nations.

“India has moved from 155th rank in mobile broadband penetration to being the number 1 nation in mobile data consumption in the world… in less than two years,” said Ambani at the India Mobile Congress, courtesy of Live Mint. “This is the fastest transition anywhere in the world from 2G/3G to 4G. By 2020, I believe that India will be a fully-4G country and ready for 5G ahead of others.”

Paying complements to the pro-active approach to stimulating the digital economy from the Indian government, Ambani is continuing the ambitious expansion of the Reliance Jio business. 5G is what will attract the headlines, most notably after a few telcos highlighted 5G is not a top priority for some nations at Broadband World Forum last week, but the broadband ambitions are just as important.

Tackling the 5G euphoria and increasing broadband penetration across the country perhaps work happily alongside each other when you consider the importance of a fibre network in both cases. The JioGigaFiber proposition, announced during the company’s AGM in July, promises FTTH connectivity in a market where broadband penetration is roughly 10%. ‘Fibering up’ the country is critical for 5G, and Reliance Jio has already started the mission.

“India will be among the largest digital markets in the world,” said Ambani. “Every enterprise must have an ‘India First’ vision to participate in this market. We will need to reinvent to grow and nurture this market to its full potential. This will be a win-win for the entire industry, for India and for the entire world.”

One interesting question which remains is whether the lessons taken from the Jio-effect can be implemented into other nations which are struggling in the lowly places of the digital league tables.

Jio readies itself for fixed broadband assault

Reliance Jio is set to pile more misery on Bharti Airtel with the launch of a low-cost fixed broadband offering.

It’s no secret Reliance Jio is eyeing up the fixed broadband market, though Bharti Airtel executives thought they might have had a bit more time. According to the Economic Times, Reliance Jio has bought controlling stakes in Den Networks and Hathway Cable, giving it a ‘headstart’ on the potentially lucrative segment.

The worry regarding the fixed broadband market is the opportunity. This might sound like a daft thing to say, but the opportunity has been staring incumbents in the face for years. None have actually done anything about it. Like the mobile market prior to the chaos caused by Reliance Jio, it is slumbering due to inaction, but that might all be about to change. If Reliance Jio can carry the momentum from the mobile and value services segments into the broadband space as well, the misery could continue for market incumbents.

According to the lastest figures from the Telecom Regulatory Authority of India (TRAI),while mobile subscription is surging (and with still a lot of room for growth), the fixed broadband market is stagnent in most regions and actually shrinking in others. There are currently 22.2 million broadband subscriptions in the country, compared to roughly 250 million households. Just to put things in perspective, broadband would have to grow 50-fold to even come close to the same scale as mobile.

With the acquisitions of Den Networks and Hathway Cable, Reliance Jio has a starting point. It can begin to rollout its own branded service and undercutting the market in the same way it did for mobile. Over the coming months, expect to see the insurgent telco aggresively spending to expand this infrastructure. Details are thin on the ground at the moment, though the intentions were outlined in May at Light Reading Big Communications Event by Mathew Oommen, President of Reliance Jio Infocomm. Home and enterprise penetration is incredibly low; there are billions to be made for those who are willing to spend to capitalise on the opportunity.

For the traditional telcos in the market, inaction might prove to be the downfall once again. Reliance Jio has destroyed profits for challengers in mobile and the same gameplan could work for fixed broadband. With such low penetration, the opportunity has always been there, but if you are happy with the status quo you are nothing more than a sitting duck. The likes of Bharti Airtel have no-one but itself to blame for missing out on the potential cash bonanza.

One of the most tired phrases in the technology world is disrupt or be disrupted. It’s a cliche which people dread hearing, but it is incredibly true here.

Jio earnings more than double as it tops a quarter of a billion subscribers

The spectacular, if unsurprising growth of Indian operator Reliance Jio continues with an annual EDITDA increase of 148%.

You can see the main numbers below and you don’t even need to be able to get your head around India’s arcane number system to see that everything’s moving in the right direction, fast. This doesn’t come as a great surprise since it put up similarly spectacular numbers last quarter too, but the Jio train is showing no sign of slowing.

Jio Q3 financials

“We, at Jio, are glad with our progress towards our mission with more than 250 million subscribers on our network within 25 months of commencement of services,” said Reliance boss Mukesh Ambani. “Our next generation FTTH and enterprise services are now being made available to our customers to further enhance our value proposition to our customers. We are making rapid progress on the growth of our digital platforms, across new commerce, media and entertainment, agriculture, education, healthcare and financial services, which will further enhance the quality of life and productivity of the people of India.”

Not content with all this ownage, Jio is splashing some of the cash that is now flowing in on some other strategic investments. It has grabbed majority stakes in Indian cablecos Den Networks, Hathway Cable and Datacom, as well as a 12.7% stake in US personal rapid transit company SkyTran,

“Our partnership with SkyTran reflects our commitment to invest in futuristic technologies,” said Jio Director Akash Ambani. “Reliance is well-poised to capitalize on its existing business portfolio and capabilities to accelerate the development of SkyTran across the world and especially in India.”

Check it out.

 

Jio leapfrogs Idea and Vodafone for second place in India

The Telecom Regulatory Authority of India (TRAI) has unveiled the monthly growth statistics for July and India is still the market which keeps giving.

Looking at the wireless segments to start with, Jio is once again dominating. Overall, the market grew by 10.5 million subscriptions taking the total to 1.15 billion. This number is already pretty staggering, though when you consider the total population of the country is over 1.3 billion there is still room for growth. In most developed markets the mobile penetration (the total number SIM cards) exceeds 100% of the population, while there are numerous cases of this percentage going north of 110%. Looking at these statistics in the simplest of terms, there is still potential for another couple of hundred million subscriptions in the country.

Of course, Jio is capitalizing most from the insatiable appetite of the Indian digital society. When looking at the total number of subscriptions secured by the telcos, Reliance Jio captured roughly 91% of the new customers, boosting its subscription base by 11.7 million. Amazingly, the 609,000 subs captured by Vodafone or the 313,000 attributed to Bharti Airtel are nothing more than footnotes; how many markets are there were you could say that!

The end result is continued momentum for Jio. As you can see below, Jio has leapfrogged both Vodafone and Idea in the market share rankings. That said, with the much-anticipated merger on the horizon it won’t be long before the combined entity hits top spot.

Telco Net Adds Market Share
Reliance Jio 11,796,630 19.62%
Vodafone 609,974 19.3%
Bharti Airtel 313,283 29.81%
BSNL 225,962 9.8%
Idea 5,489 19.07%
MTNL -9,914 0.3%
Reliance Communications -31,814 0.004%
Tata -2,357,690 2.1%

Perhaps the most amazing aspect of these statistics is in the broadband market however. The staggering growth of the mobile segment will continue for at least the short- to mid-term future, though with a total of 22.2 million broadband subscribers there is an incredible opportunity for the right offering.

Just to put these numbers in perspective, the broadband would have to grow 50-fold to even come close to the same scale as mobile. Admittedly, it significantly more expensive to invest in infrastructure for a future-proofed broadband network in comparison to mobile, but this is an area which seems primed for the right disruption.

Of course, with disruption comes uncomfortable truths. Jio might be on an upward trend, collecting subscriptions and hiring generously, though the consequence of this disruption has been market consolidation. In the most general terms possible, consolidation is never a positive for the job market, while the Financial Express is reporting job losses of 50,000-75,000 in the Indian telco market across 2018.

Jio closes the gap as Indian market continues growth

The Telecom Regulatory Authority of India has released its monthly update on telco subscribers across the country, and Jio is continuing to erode the gap with its rivals.

On the whole, the Indian telco market is continuing to grow. Wireless subscriptions increased by 1.37%, adding just over 15 million new subscriptions to the armoury taking the total up to 1.14 billion across the country.

What is slightly encouraging is the fairly balanced uptake; there might be a social divide between the rural and urban communities, but this difference does not seem to be compounded by digital as the revolution sweeps throughout the nation. In the urban regions, wireless subs increased 1.27% to 633 million, while it was 1.49% to 512 million in the rural areas.

Looking at the individual winners, Jio has been hoovering up subscriptions, though Idea Cellular has also made an impact this quarter. Perhaps this is a sign the Jio effect is starting to fade, as it would appear growth has been amassed from new subscriptions as opposed to eroding the customer base of competitors.

Telco Net adds Market Share
Jio 9,713,047 18.78%
Idea Cellular 6,369,785 19.24%
Vodafone 275,219 19.43%
Bharti 10.689 30.05%
BSNL 244,285 9.87%

Momentum is still with Jio galloping up the market share rankings, though with the competitors stabilising their own numbers it might appear the major disruption is over. That is, until Jio decides to launch another ridiculous offer, or in a few years’ time when 5G appears in the country. Looking at the ridiculous Jio idea, you can’t help but assume it might come in the form of a convergence play.

Wireless subscriptions are shooting upwards, though broadband is certainly not on the same trajectory. As it stands there are only 22 million broadband subscriptions in the country out of almost 250 million households. Over the course of June, broadband subscriptions actually declined 0.5%. Jio has already told us the next wave of disruption will come in the broadband space, and when combined with its media and entertainment assets, there is a huge opportunity to run a convergence play.

Stealing subscriptions by undercutting can only go on for so long, but now Indian consumers have become addicted to the taste of the internet through mobile, the broadband opportunity becomes a lot more appealing. Jio has a huge mobile customer base, which it can continue to grow, though leveraging this asset by launching additional services could be a very profitable idea.

28m net adds – Jio numbers really are quite remarkable

Reliance Jio has reported its numbers for the last three months, and it does make for some very interesting reading.

28.7 million net adds for subscribers across the quarter, taking the total up to 215 million, and a churn rate of 0.3%. Few telcos can claim to get anywhere near these numbers, though it seems Jio is doing it while making money as well, with the team claiming net profits of roughly $89 million. The traditional players in the Indian telco market must be pulling their hair out over the cheap offers Jio is able to offer while continuing to be profitable.

“Jio continues on its path to drive digital revolution in India,” said Mukesh Ambani, MD of Reliance Industries. “We doubled our customer base and most user metrics in the last 12 months.

“215 million customers within 22 months of start is a record that no technology company has been able to achieve anywhere in the world. Jio has built an ecosystem for digital services and its affordable and simplified pricing strategy offers every Indian a chance to experience the ‘power of data’. FTTH and Enterprise services with strong fibre backbone across the country would further establish Jio’s leadership as a digital services provider.”

The Jio mission seems to be about creating scale, leaning on efficiencies and then creating new opportunities to monetize the user though diversified offerings. But, it does all start with encouraging the consumer to be a more active participant in the digital ecosystem.

The network has continued to expand, Jio now claims to cover 99% of the Indian population, and to have the only network to deploy pan-India 4G across the 800 MHz, 1800 MHz and 2300 MHz bands. These are not the only boasts, as the team also believes it has the world’s largest mobile data consumption and VOLTE networks. What this does offer is opportunity for the consumer to deep dive into digital.

Jio consumers use on average 10.6 GB of data per month, while spending 744 minutes talking on devices and 15.4 hours consuming media. The more Jio can convince its users to spend online, the more money it makes. This might seem like a simple idea, but the previously digitally starved Indian consumer is certainly gaining an appetite.

Of course, mobile is just the beginning. When we saw Mathew Oommen’s, President of Reliance Jio Infocomm, presentation during the Big Communications Event in Austin this year, he was bullish about diversification and convergence. Broadband was a big area of focus, with Oommen claiming there are only 18 million broadband connected homes in the country, while the enterprise market is currently at a fifth of what it could be. These targeted segments are becoming apparent.

JioGigaFiber, which will offer both consumer and enterprise broadband and entertainment services, was announced earlier this month. Customers across 1,100 cities can no register for services starting 15th August 2018, with the launches being dependent on demand. Broadband will be a more capital intensive campaign for Jio, though we suspect there might be a few initiatives in the pipeline to encourage subscriptions.

Elsewhere in the business, JioTV is growing, as it JioCinema, while the combination of JioMusic and Saavn is starting to look like a winner as well. MyJio, the self-care app, now has more than 200 million downloads, and the mobile payment business is starting to gather steam.

Mobile might be where Jio caused the chaos on the first place, but the team is clearly not satisfied with just being a telco. Jio is on the verge of becoming one of the most influential businesses in India, touching the consumer in every aspect of life.

Reliance set to drop $70 million on Radisys to help with the move to 5G

Giant Indian telecoms conglomerate Reliance has agreed to but US open telecoms solutions provider Radisys for around $70 million.

Radisys describes itself as a leader in providing open telecoms solutions. In practice this points towards strengths in NFV, CORD and telecoms cloud in general. Reliance, which launched its massively disruptive MNO Jio less than two years ago, seems to have decided it needs to invest heavily in the next generation of tech if it is to consolidate its position.

“Reliance and Jio have been disrupting legacy business models and establishing new global benchmarks,” said Akash Ambani, Director of Reliance Jio. “Radisys’ top-class management and engineering team offer Reliance rapid innovation and solution development expertise globally, which complements our work towards software-centric disaggregated networks and platforms, enhancing the value to customers across consumer and enterprise segments.

“This acquisition further accelerates Jio’s global innovation and technology leadership in the areas of 5G, IOT and open source architecture adoption.”

“The backing and support of India-based global conglomerate Reliance, will accelerate our strategy and the scale required by our customers to further deploy our full suite of products and services,” said Brian Bronson, CEO of Radisys. “The Radisys team will continue to work independently on driving its future growth, innovation and expansion. The addition of Reliance’s visionary leadership and strong market position will enhance Radisys’ ability to develop and integrate large-scale, disruptive, open-centric end-to-end solutions.”

The agreement is for Reliance to pay $1.72 per share for Radisys, which equates to around $70 million in total and is around 2.5x the $0.70 what the shares cost at the end of last week. Investors don’t seem to be totally convinced the deal will go through, however, because Radisys shares were trading at $1.60 at time of writing. Maybe they’re concerned the Trump administration’s economic nationalism will have a part to play.

We disrupted mobile, now onto broadband – Reliance Jio President

Reliance Jio has sent shockwaves through the Indian telco space, but it isn’t finished just yet; next stop, broadband and enterprise services.

Many companies will claim to be disruptive, but few can point to concrete evidence of organised chaos like Jio can. Speaking at this year’s Big Communications Event in Austin, Mathew Oommen, President of Reliance Jio Infocomm, reeled off some very impressive numbers and the ambition is yet to be dampened.

“The last 2-3 years India has gone through disruption in almost every sector,” said Oommen. “The impact these transformations have had on more than a billion people is almost unimaginable”

As it stands, the company has more than 186 million subscribers, while its network supported 372 billion minutes of VOLTE calls over the first quarter and 2.4 billion hours of video each month. Not bad for a market which was not considered capable of supporting 4G. Jio is still causing chaos in the mobile space, Oommen stated the objective is to get to 500 million subscribers, but ambitions are being widened to broadband and enterprise as well now.

Oommen claims there are only 18 million broadband connected homes in the country right now, while the enterprise market is currently at a fifth of what it could be. This is the next target for a business which does not seem to accept boundaries and limitations which are placed on the telco market.

“We disrupted the mobile industry and now we are looking further,” said Oommen.

Of course this should not be taken as an indication the team is going to ease up on mobile. The team built a video-centric network over the last couple of years which is going to fuel the next stage of growth in the mobile space. Edge computing is right at the forefront of technological developments here as the team drives towards continued evolution and establishment in the media space.

At the centre of this evolution is the MyJio app. This app not only serves as the focal point of customer interaction, but acts as a content aggregator platform for Jio. This is another area where Jio is defying industry trends, as while other telcos are struggling to make an impact in the media world, MyJio and its features is screaming ahead. The app already has 150 million downloads, while the JioTV service has 100 million subscribers and JioChat has 50 million. Other services include JioBank, JioHealthHub and JioMusic, making it a pretty well populated platform.

The attitude put forward by Oommen is a simple one; disrupt or be disrupted. Jio demonstrated this by offering free voice calls with its tariffs, decimating the business models of its competitors in the process, and the continued evolution into the content and media services space is another demonstration of the destructive nature of the Jio business.

“India and Jio are just getting started,” Oommen proclaimed as a closing statement. We believe him.

Jio does it again as new deal sends shares tumbling

Reliance Jio has unveiled a new postpaid tariff to further undercut rivals plans and reinvigorate the enthusiasm which saw millions of customers flock to the telco.

The new deal is priced at Rs 199 per month offering 25 GB data, while all phone calls and texts are also included. It is pretty much as low as you can get but still make money (questionable as to how much though), with the added bonus of tumbling share prices for all its competitors.

Over the last 24 hours, shares in Bharti Airtel dropped almost 6%, Idea Cellular was down 14% and Reliance Communication was down 5%. Vodafone’s share price is unlikely to be drastically influenced by one market, but the management team will be wondering when the misery is going to end.

The last few months have been a bit quieter in India, which must have come as a welcome rest for the traditional players. Jio’s entry caused chaos in a stagnant market, with the spreadsheets starting to pick up some weighty bumps and bruises. A period of calm might have helped out the likes of Bharti Airtel or Idea, however the launch of this new tariff is the starting bell for another round.

It would hardly be a surprise to see customers tearing up contracts and flocking to the open arms of Reliance Jio. It might not be the free services which were being offered last year, however this tariff can cause some damage. There is one reason share prices are plummeting all over the place, the market knows that the competitors are going to have to match the Jio offer. That means more pressure on profit columns which are already being squeezed pretty tight.

Some might have though the chaos was over and the market could return to calm, but Jio is making sure the party train keeps rolling.