Jio claims another scalp as RCom is down and out

Reliance Communications has arguably gotten the sharpest end of the Jio stick over the last couple of years, but it seems the misery is finally over as the firm files for bankruptcy.

According to The Times of India, Chairman Anil Ambani has approached the National Company Law Tribunal to file for bankruptcy after a torrid couple of months which capped off a horrendous a couple of years. Although the team thought there might be some salvageable assets in a deal with Reliance Jio, this might prove to be the final chapter of the telco story for Anil.

Over the last couple of months, RCom has been attempting to navigate the red-tape maze to sell spectrum assets to Reliance Jio, though this transaction has been blocked due to no-one tackling responsibilities for debts owed to the Department of Telecommunications. The DoT was not willing to greenlight the deal until it had reassurances, though with RCom not able to pay and Jio not willing to, the deal entered a stalemate.

Of course, the plot thickens when you consider this cash was supposed to help RCom pay off various other debts, including one to Ericsson, which had been attempting to get Ambani arrested and imprisoned over the monies owed. It has all seemingly fizzled out into somewhat of a depressing end for RCom.

15 years ago, however, this would have been far from imaginable. The firm used to be one of the more promising telcos in a relatively lifeless market. India has long been one of the ‘BRIC’ nations, with potential fortunes enough to convince many to make a bet on the market. However, incumbent players were happy with the status quo and India fell behind the rest of the world in the digital rankings. That was until Anil’s brother Mukesh turned up with his new business Reliance Jio.

Reliance Jio changed the rules of the game and offered a disruptive data-driven service which appealed to the Indian consumer. Soon enough millions of Indians were ditching traditional telcos in pursuit of the glories hidden in digital society. RCom did not adapt and is now suffering the consequences of standing still for a decade.

RCom now joins a growing list of casualties in India. With the Vodafone/Idea merged business planning its assault, you have to hope this ‘new’ player will be able to offer some resistance to the Reliance Jio momentum. Although this is an admirable success story, there are a worryingly small number of telcos for such a vast market.

Ericsson seek Ambani arrest over unpaid RCom bill

Ericsson has filed its second contempt petition against Reliance Communications in the Indian Supreme Court asking for Chairman Anil Ambani to be arrested.

The dispute between Ericsson and Reliance Communications is not a new one, though this certainly steps the conflict up a level. With previous lawsuits focusing on unpaid bills, Ericsson has requested be detained in civil prison and be barred from travel overseas unless he can guarantee the payment of 550 crore rupees (roughly $79 million) owed for various products and services.

According to The Economic Times, Ambani has previously given guarantees in court that the debt would be repaid to the Swedish vendor, though since the December 15 deadline is firmly in the past Ericsson executives have gotten twitchy. The last filing asks Ambani be detained until there are concrete guarantees the bill will be paid.

Having missed the original payment in September, Ambani and Reliance Communications were given until December 15 to find the cash, though this has proved more difficult than expected. Ambani is in a bit of a stalemate at the moment, as while he will not want to be arrested, payment somewhat relies on the sale of licenced spectrum assets to Reliance Jio, a transaction which is being held up by the Department of Telecommunications.

This deal is currently in limbo, as while the National Company Appellate Law Tribunal has given the green light for the sale (and told the Department of Telecommunications to clear it), the hold-up is concerning cash. The Department is standing its ground, stating it is not possible to clear the deal unless there was clarity on payment of dues and associated charges. Reliance Jio CEO Mukesh Ambani has stated the company would not be prepared to take any liable for dues owed by Reliance Communications.

With all parties refusing to give in the road ahead does not look like a pleasant one. Not only has his telco business suffered due to the success of his brother’s disruptive influence on the market, but in refusing to accept liability Mukesh is pushing further misery, and a potential jail sentence, onto Anil.

On the other side of the coin, Mukesh’s Reliance Jio is having a much happier time. The latest figures from TRAI suggest the telco grew its subscriber base by more than 10 million, taking total market share up to 22.46%.

That said, family disputes mean nothing to the Swedes. Ericsson will seemingly push ahead to recover the debt, whatever the cost.

TRAI reveals Jio is the only Indian telco in growth

The Telecom Regulatory Authority of India (TRAI) has released its monthly report on the state of play in India, and it’s a pretty gloomy picture for everyone aside from Jio.

Across the country, the message is relatively positive. Wireless subscriptions have grown once again this time by 2.4 million, not as glorious as previous months but growth is still growth, but to add a slight dampener to proceedings, broadband declined, this time by 70,000 subscriptions. Once again we reiterate the fixed broadband segment is one which is bursting with opportunity.

Sustained growth in India, while commendable, is not necessarily an interesting development as we have been saying the same thing for more than 18 months. Perhaps the most interesting aspect is who is capturing the additional subscriptions. Stating Jio has collected the lions share will surprise no-one, but September saw everyone else shrink.

Subscription growth Total market share
Reliance Jio 13.02 million 21.57%
MTNL -9,435 0.3%
Reliance -16,349 0.004%
BSNL -536,407 9.67%
Tata -1.01 million 1.88%
Bharti Airtel -2.36 million 29.38%
Vodafone -2.62 million 18.97%
Idea -4.06 million 18.23%

Reliance Jio has now firmly established itself in second place in the market share rankings, which has been a long-time coming, though it is starting to make genuine in-roads against Bharti Airtel. Each month new figures are released and while Bharti might have been able to maintain its position, recent figures have shown the eroding impact of Jio.

The issue for those who are trying to resist the Jio revolution is what is around the corner. Jio has made no secret of its plan to capitalise on the ridiculously low broadband penetration across the country, and you have to wonder what will happen when a more established network can be developed. The company recently purchased controlling stakes in Den Networks and Hathway Cable, offering it a foot through the door, though expect some big developments over the coming months.

Predicting what will happen is a simple task; Jio will take the same low-cost approach to broadband as it has with mobile, though the potential of a convergence product portfolio could further pile the misery onto competitors. How many customers might be tempted to switch over to Jio’s mobile proposition when a cheap broadband bundle is thrown in as well? This is what will be the most interesting development.

Jio has done an absolutely wonderful job of revolutionising the Indian digital economy, but what can be done on the fixed broadband side of things remains to be seen. Just as the story is starting to become repetitive, Jio is about to start on a new chapter.

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 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.

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.

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.

Jio looks strongest in India survival game

Reliance Jio has continued its march to the top of the Indian telco rankings, reporting another quarter of monstrous growth adding another 26.5 million new customers.

Total new customers across the quarter stood at 27.9 million, with a churn rate at 0.25%, with the average data consumption per user per month of 9.7 GB and average voice consumption of 716

minutes. ARPU remained under pressure, dropping 11%, but this is hardly unusual for the country. Spreadsheets are being attacked from every angle, and it seems to be a case of who can last the longest.

“A full-blown social, mobile and digital revolution is underway across the world, and I am glad that India is not being left behind in any way with the advent of Jio,” said Mukesh Ambani, MD of Reliance Industries. “Everyone at Jio is today proud to have played a pivotal role in transforming the digital landscape of this country and empowering millions of Indians with all the leading digital tools and skills. Jio is offering the ‘power of data’ to each Indian to fulfil every dream and to collectively take India to Global Digital Leadership.”

Looking at the financials, revenues stood at $3.6 billion for the quarter with net profits slightly up year-on-year to $76.6 million. Growth might not be exceptional, but in comparison to competitors Jio is having a great time. Bharti Airtel posted its lowest quarterly profit in 15 years, while Idea was another which suffered through the last twelve months.

The India telco space is chaos right now. Consolidation is everywhere, while profits are shrinking at an alarming rate. Winning the telco battle in India seems to be a case of surviving longer than competitors. Last man standing collects all the glories.

RCom gives green light to offload wireless unit

Reliance Communications has been given the go-ahead to sell off its wireless business unit after National Company Appellate Law Tribunal removed an order blocking the sale.

The NCLAT had blocked the sale of the wireless assets due to various legal challenges, including one from Ericsson. The Swedes claimed RCom had not paid it for equipment and services for two years, and instead tried to pull a fast one by issuing a few post-dated cheques. After this obstruction has been lifted, RCom is now free to offload the unit to Reliance Jio.

“As directed by the Hon’ble Supreme Court, RCom moved the Hon’ble NCLAT today for vacation of the stay in relation to sale of its tower and fiber assets” a RCom statement reads. “The Hon’ble SC had itself vacated the stay in relation to spectrum, MCNs and real estate yesterday.

“By an interim order passed today, the NCLAT has vacated the remaining stay, and allowed execution of sale deeds and deposit of the proceeds with SBI in an escrow account. Based on these orders, RCom can now proceed with completion of its entire asset monetisation plan, covering spectrum, towers, fiber, MCNs and real estate.”

The delay in the sale would not have been welcomed by Anil and Mukesh Ambani, two brothers who respectively own Reliance Communications and Reliance Jio, and who reportedly not get along. Offloading the wireless business unit is one step in Anil exiting the disruptive and chaotic telco space.