Reliance Jio will lead India’s new Digital Revolution
When the entire country in fighting with the pandemic, Mukesh Ambani is on the run to make the Company Reliance debt-free by 2020. In the past few weeks, many foreign investors including Facebook and General Atlantic have invested in Jio Platform including many others. This led everyone to think about the plan Jio has for India.
In this article we will carefully analyze what is Jio platform and why major foreign Investors are rushing to buy a share in Jio Platform and what this mean for Indian Economy.
All Started on September 5 2016, when JIO was launched with a welcome offer promising lifetime free voice calls for all. This was a remarkable step in the Indian telecom industry. The main intention is to grab the users from other networks and the idea seemed to work well. And providing unlimited data to all made Indians fond of data.
Even before the actual official launch in 2016, Mukesh Ambani is preparing the grounds for entering into the telecom sector. In 2010 a company named as ISBL has won 22 circles in Broadband wireless auction. And soon after the auction was completed, Reliance Industries brought 96% stake in Infotel Broadband. At a total cost of Rs 4,800 crore, it was the only company to have won broadband spectrum in all 22 zones across the country. Infotel started operations as a telecom subsidiary of Reliance. In January 2013, it was renamed to Reliance Jio Infocomm Limited. The story seems quite normal until the launch of JIO in 2016.
Other Interesting events in the timeline before the launch looks as below
- Jul 2015Reliance Industries partners with Intex to make 4G VoLTE smartphones.
- Oct 2015Reliance announces LYF, its own brand of smartphones compatible with Jio.
- 27 Dec 2015Reliance Jio’s services launched for employees in beta.
Why Major-Tech giants rushing to buy part of JIO
The story of JIO tells that it was supposed to be a telecom company. But the story is different on the ground. JIO is building a world-class technology platform, with enabling digital services in different domains. The business model is quite interesting to look at. Just look at the different apps that JIO has developed within the span of its launch.
During the past few years, JIO has acquired major technology platforms. The conglomerate’s notable acquisitions in the technology space include Saavn (music streaming), Haptik (conversational AI), Embibe (learning and ed-tech), Reverie (Indic language software), NowFloats (SaaS for SMEs), Den Networks and Hathway (cable and broadband), Radisys (5G and IoT), and more.
These acquisitions reveal one thing, JIO was never only restricted to the telecom sector, but it is building a platform for a larger plan. A digital Revolution in India. Yes, this business model to develop a world-class technology platform in the Worlds largest developing country is of interest to major players of the world.
It is the Technology Platform and the Business model of creating a Digital Inclusive Revolution in India, which got the eye of major tech giants.
Investments so far in JIO Platform
The investments cycle is started when the tech giant Facebook announced that It’ll be buying 9.99% stake in JIO platform. The main motive is to capture the growing market and use its Platforms like WhatsApp and Instagram in India for the digital revolution. Below are the Investments that came to Jio thereafter.
- April 22, 2020: Facebook announces investment of Rs 43,574 crore for a 9.99 per cent stake
- May 4, 2020: Silver Lake announces an equity investment of Rs 5,655.75 crore
- May 8, 2020: Vista announces equity investment of Rs 11,367 crore for a 2.32 per cent stake
- May 17, 2020: General Atlantic invests Rs 6,598.38 crore for a 1.34 per cent equity stake
- May 22, 2020: KKR announces Rs 11,367 crore investment for a 2.32 per cent stake
- June 5, 2020: Mubadala announces Rs 9,09360 crore investment for a 1.85 per cent equity stake
What JIO mean for INDIA – Inclusive Digital growth
Just look around you, what has significantly changed for the past few years, nothing much right. But just imagine the cost of data you have to pay around 4 years back. The average cost of 1 GB data a few years back was around 250 rupees. But right now the cost is around 18 Rupees for 1 GB data. It’s not the data we are talking about. It’s about the number of people that are brought online because of reduction in data.
The number of people coming to online has increased considerably with the reduction in price per GB data. Even the rural areas are now capable of buying data packs and going online community. The number of people who spent time online has increased. This was the base that has been setup. With increased people online, there is a larger market for JIO future plan. an Inclusive digital growth.
With the cost of data at high, people in rural areas are barred or not included in the internet community and access digital service. And also the signal reach in the rural areas is unmanageable. These made the rural areas out of the cycle of India’s growth. But now due to increased connectivity and increased affordability among the people, the motive of INCLUSIVE GROWTH was no longer a dream for INDIA.
With the present investment in JIO, it is clear that major tech players are very much of the view that India will have growth. Investments are good for India as they increase FDI which is a very good indicator of a growing economy. This surely ensures consistent growth in the Indian economy.
With Facebook combining hands with JIO technology platform and using its already established WhatsApp and Instagram tool, It is aimed to bring merchants and farmers online. This was even highlighted in the Mukesh Ambani Letter after the Investment. Creating a platform for the MSME that was also highlighted. All these together were aimed to bring more stores online and more consumers online and promote digital payments and many more. There all are in line with India’s aim to promote Digital service and Digital payments and Inclusive growth including both rural and urban people of the country. Jio Platforms claims to build a digital society inclusive of all people and powered by world-class Reliance Jio‘s network technology. The main aim to digitize services for consumers, allowing them to shop online and pay online. And more Interestingly Jio Platforms wants to bring Kirana stores to the digital world which is necessary for inclusive growth. This is seen as a game-changer and a potential business opportunity for WhatsApp, the Facebook-owned messaging platform with nearly 400 million users in the country.
“The synergy between Jio and Facebook will help realize Prime Minister Shri Narendra Modi’s ‘Digital India’ Mission with its two ambitious goals — ‘Ease of Living’ and ‘Ease of Doing Business’ – for every single category of Indian people without exception. In the post-Corona era, I am confident of India’s economic recovery and resurgence in the shortest period of time. The partnership will surely make an important contribution to this transformation,” said Mukesh Ambani, Chairman and Managing Director, Reliance Industries Ltd.
So the plan wan to capture the technology market and promote digital tools in India. Jio mart was already launched in few places. Only the future will tell us what will more be developed by the technology platform using the investment and partnership it has got so far.