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Reliance Jio: A game changer in waiting
MUMBAI: Dad, what is Reliance Jio? How will it change my life? Do I need my local cable operator as Jio will offer me access to watch television channels? Will I have to pay less for my broadband? What else will I get and by when?
These are difficult questions to answer in a definitive fashion, considering that the Mukesh Ambani-controlled company has not let out its full plans in the public domain. But what we are surely going to see is the convergence of media and telecom in a big way, offering bundles of data, video and voice services.
The focus will be on three key segments. On the telecom side, Reliance Jio Infocomm, a subsidiary of Reliance Industries Ltd (RIL), will offer high-speed 4G wireless services and fibre-based fixed-line services. On the media front, it will offer live TV, video-on-demand and cloud-based services. There will also be web-based services.
The first consumer offering to roll out is a messaging app called Jio Chat for Android and iOS cell phones. It has features like instant messaging, free SMS, voice and video calling. Competition will be with other messaging and calling apps like WhatsApp, which is the big daddy with 80 million users, WeChat and Line Messenger.
According to Citi Research, the telco wants Jio Chat to eventually become a single platform for users by integrating voice, messaging, entertainment and e-commerce into a single app.
Next on the anvil is Jio Play, an app that will offer television channels. Apart from live TV, Jio Play will automatically store these shows for seven days on the cloud. The plan is to provide TV services through the traditional route, where it will compete with direct-to-home (DTH) service providers and multi-system operators (MSOs), as well as on its mobile platform. This will mean the widening of TV services from a household product to a personal product.
What else to expect from Reliance Jio? There will be services like Jio On-demand (VOD), Jio Beats (music streaming), Jio Friends (friend locator app), Jio News (online newspaper service) and Jio Mags (online magazine service). Healthcare, including storing the medical history of a patient in the cloud, and education are also going to be big offerings from Jio.
Consumers expect Reliance Jio to offer its bundled services at affordable prices. By lowering the tariff on data and voice services, it will have an impact on the traditional telcos. On the video side, Reliance Jio will also adopt a poaching strategy and, thus, compete with DTH and cable TV companies.
So, how did Reliance Jio Infocomm take shape?
In June 2010 when the government was conducting the broadband and wireless access (BWA) auctions, major telecom players including Vodafone, Anil Ambani’s Reliance Communications and Tata Communications backed out as the auction prices had reached “beyond rational levels”.
However, there was one player, Infotel Broadband Services, that emerged as the only “pan-India winner” in the auctions by bidding Rs 12,847.77 crore (Rs 128.48 billion) for all the 22 circles. And before anyone could look into the company, in a classic Mukesh Ambani move, RIL picked up 95 per cent stake in it just a day after the auctions.
Later, in an investor briefing, RIL said that the company would roll out wireless broadband services in the country on WiMax, LTE, or 4G mobile technology. At the meeting, the company also announced its plan to invest Rs 18,000–20,000 crore (Rs 180–200 billion) over the next one year to roll out its services.
While no full-fledged services have rolled out yet, the company is making serious investments in improving backend infrastructure and human resources. The latest investment figure, as revealed by Ambani himself, is Rs 70,000 crore (Rs 700 billion).
While there have been speculations on what the services will be, many believed it would be high-speed wireless gaming, high-quality video conferencing, cheap video-on-demand, etc.
Reliance Jio Media, a subsidiary company of Mukesh Ambani’s Reliance Jio Infocomm, applied for a pan-India multi-system operator (MSO) licence. Reliance Jio Infocomm has already launched a chat app and will soon launch a video application.
TelevisionPost.com takes a look at the journey of Reliance Jio Infocom—from naught to a game changer in waiting.
- In May 2010, Mukesh Ambani and Anil Ambani scrap the four-year-old non-compete agreements signed at the time of the split of the two brothers. This paves the way for the elder brother to enter the telecom business.
- In June 2010, RIL buys 95 per cent stake in Infotel Broadband, which was the only player to have won pan-India licence under the BWA auctions, for Rs 4,800 crore ($1 billion).
- In an investor briefing, RIL says it would invest Rs 18,000–20,000 crore (Rs 180–200 billion) over the next one year to roll out its services.
- While it keeps testing services in a few cities, for three years there is no major announcement from Infotel Broadband Services.
- In January 2013, RIL changes the name of Infotel Broadband Services Ltd to Reliance Jio Infocomm Ltd.
- Reliance Jio and Bharti sign an agreement under which Reliance Jio will utilise dedicated fibre pair on Bharti’s i2i submarine cable that connects India and Singapore. The i2i cable system will provide Reliance Jio direct access and ultra-fast connectivity to major hubs across Asia Pacific.
- Reliance Jio and Reliance Communications sign an agreement for sharing of RCom’s nationwide telecom towers infrastructure.
- Reliance Jio shells out a one-time entry fee of Rs 1,673 crore (Rs 16.73 billion) to receive a Unified Licence for all 22 service areas across India. It becomes the first telecom operator in the country to get a pan-India Unified Licence.
- Reliance Jio acquires spectrum in 14 key circles across India in the 1800 MHz band for Rs 11,054.41 crore (Rs 110.54 billion).
- Reliance Jio and Viom Networks ink an agreement for sharing of Viom’s nationwide telecom tower infrastructure.
- Reliance Jio and ATC India sign a tower-sharing agreement for utilising telecom tower infrastructure of ATC India across the country.
- Reliance Jio tests its 4G network at the IIT Mumbai Techfest by running trials of video calls and Jio Television service.
- Reliance Industries owner Mukesh Ambani announces Rs 70,000 crore (Rs 700 billion) for Reliance Jio; aims to cover around 5,000 towns and cities, accounting for over 90 per cent of urban India and over 215,000 villages.
- Reliance Jio appoints Rainer Deutschmann as chief products and innovation officer.
- Isha Ambani and Akash Ambani appointed on the board of Reliance Jio.
- RIL acquires Raghav Bahl-promoted Network18 and TV18 for around Rs 4,000 crore (Rs 40 billion) via its subsidiary Independent Media Trust (IMT). The company said acquisition will differentiate RIL’s 4G business by providing amalgamation at the intersect of telecom, web, and digital commerce via a suite of premiere digital properties.
- Reliance Jio subsidiary Reliance Jio Media applies for a pan-India MSO licence; hires veteran cable TV professionals like former Hathway Cable & Datacom MD and CEO K Jayaraman and former DEN Networks CEO SN Sharma to spearhead the venture.
- Reliance Jio wins 76.8 MHz of spectrum (48.8MHz of 800 MHz and 28 MHz of 1800 MHz) for Rs 101 billion to beef up its 4G LTE services.
- As part of its phase-wise rollout plan, Reliance Jio launches messaging and calling app Jio Chat on Android and iOS platforms.
- Reliance Jio offers free 4G Wi-Fi at Wankhede Stadium during Mumbai Indians matches during the Indian Premier League (IPL).