Jio Fiber service to be launched on commercial basis next month; IPO within five years

MUMBAI: At Reliance Industries AGM today Reliance Industries CMD Mukesh Ambani announced that Jio Fiber services will be launched on a commercial basis on 5th September 2019.

This launch will mark the third anniversary of Jio’s launch. The plan is to list Jio within the next five years. “We will induct global partners in Jio and Reliance Retail and will move towards listing these two entities in the next five years.”

Meanwhile, its parent Reliance Industries’ aim is to become a zero net debt company by 31 March 2021. “We have a very clear roadmap to becoming a zero net debt company in next 18 months,” Ambani explained.

A series of announcements regarding Jio was made that will shake-up the market and make rivals rethink their gameplan. Jio GigaFiber’s rollout will be completed in the next 12 months. The aim is for Jio GigaFiber to reach 20 million residences.

Jio Fiber’s plans will be priced at Rs. 700- Rs. 10,000 per month. The most basic plans will start at 100 Mbps and go up to 1 Gbps. Jio broadband’s speed starts 100 Mbps and goes up to 1 Gbps. The pricing announcement is significant. Currently available in beta testing, GigaFiber customers paid up to Rs 4,500 as a security deposit for the router, with broadband internet up to 100GB free per month.

Ambani said that Jio’s tariffs are based on four principles. The first is having simple and easy to understand tariff plans. The pricing of plans he said is less than 1/10th the global rates, to make it accessible for all. The aim is to suit every budget and every need. The second principle is that customers should pay for only one service, either voice or data. Not both. The third principle is to simplify the purchase and consumption of content. Today people pay for and keep track of multiple subscriptions to multiple applications just to watch movies and shows. This is both expensive and cumbersome.

“Today, I am announcing that Jio Fiber plans will come bundled with subscriptions to most leading premium OTT applications”. He also announced a premium service for watching new movies. “Premium Jio Fiber customers will be able to watch movies in their living rooms the same day these movies are released in theatres! We call this Jio First-Day-First-Show. We plan to launch this service in the middle of 2020.”

The company is also launching a special mobility service for Jio Fiber users called Jio Postpaid Plus, to deliver a platinum-grade service and product experience.

The Jio Fiber set top box will combine several features including entertainment, VR content, video conferencing, interactive gaming and many other smart-home solutions. “The digital possibilities are endless,” said Ambani. Moreover, the Jio Set-Top-Box will accept the broadcast cable TV signals from LCO partners. The aim is that with every Jio Fiber home all Jio’s LCO partners will continue to have a steady stream of revenue for their broadcast TV business. The aim is to have a partnership with all LCOs in the country.

Jio Fiber has a welcome offer. Jio Fiber customers who opt for annual plans called Jio-Forever plans will get an HD or 4K LED Television and a 4K set-top box free.

“India is today a $2.5 Trillion economy. Statistics from large economies show that nearly 3%-5% of their GDP is spent on digital services. Even at 3% this translates to a potential Indian digital service spend of nearly 5 lakh crores annually. I believe that Jio is ideally placed to earn a significant proportion of this technology-driven value-addition to our economy” said Ambani.

Jio Ambani said has over 340 million subscribers in less than three years. “On 5th September this year, Jio turns three years old. And what an incredible three years it has been! In the sacred Upanishads, we have the famous mantra TAMASOMA JYOTHIR GAMAYA which means lead us from darkness to light. In a manner of speaking, before JIO, India was data dark. And now with Jio, India is data shining bright.“

He added that Jio is signing up more than 10 million new customers each month. “The potential for growth is immense, and half a billion customers is now well within our reach.” He noted that Jio has become not just the largest operator in India but also the second-largest single country operator in the world.

He explained that while most of Jio’s investments are complete, it has so far fired up just one of the engines of Revenue generation for Jio namely mobile broadband. But even with one engine, Jio has been profitable from its first quarter of commercial operations.

“And now we are ready to kickstart four more engines of connectivity revenue for Jio. Internet Of Things or IoT all over India. Home Broadband. Enterprise Broadband. And Broadband For Small And Medium Enterprises. And I am glad to report that the Revenues from each of these engines will kick-in within this financial year.”

Speaking about JioFiber he noted that on 15 August last year, the company had invited registrations of interest from across India so that the company could prioritise the rollout into localities with the highest interest. He called the response simply overwhelming. “We received over 15 million registrations from nearly 1,600 towns. And based on these registrations, we have drawn up a plan to reach 20 million residences and 15 million business establishments in these 1,600 towns.

“Over the past year, we have built significant momentum in our Jio Fiber rollout and we are confident that we will complete our network rollout within the next 12 months. During the last year we also installed Jio Fiber – on a trial basis – in nearly Half A Million homes to fine-tune our services based on actual customer feedback. And we have found that these trial homes on average are consuming more than 100 GBs per month and this usage is increasing with each passing day.”

He noted that users with Jio Fiber get lightning-fast broadband speeds of up to 1 GBPS.

He spoke about the role that Jio Fiber will play when it comes to television which he noted is still at the heart of the Indian home. He called television services in India a classic small-businesses success story, where LCOs played a pioneering role.

But he noted that in recent years competition from DTH operators have threatened the viability of nearly 1 lakh LCOs who still operate across India. “As firm supporters of local and small businesses Jio wanted to ensure that these LCOs continued to serve their communities.”

He noted that earlier this year RIL acquired controlling stakes in three leading Cable MSOs – Hathway, DEN, and GTPL who have direct relationships with over 30,000 LCOs.

“Over the past months, we have worked with our MSOs to upgrade their infrastructure to world-class standards. After these upgrades, our LCO partners will now be able to offer the largest bouquet of High-Definition channels to customers with better features, reliability and customer experience than even DTH. But, now we have gone one step further. We have designed our Jio Set-Top-Box to accept the broadcast cable TV signals from our LCO partners. So that with every Jio Fiber home all our LCO partners will continue to have a steady stream of revenue for their broadcast TV business. We look forward to extending this partnership to all LCOs across the country.”

As far as the Internet of Things is concerned Jio has developed a service on its pan-India 4G network called Narrowband Internet-of-Things or NBIoT. Jio’s IoT platform will be commercially available starting 1st January 2020.

“Using NBIoT data from billions of smart sensors whether residential, industrial or public can be collected from across India with the highest reliability and lowest cost. Within another 2 years, it is estimated that there will be more than 2 Billion Connected IOT devices in our country.

“Jio aims to connect at least one billion of these on Jio’s IoT platform. This translates into a Rs. 20,000 crore per year revenue opportunity for Jio.”

Ambani also announced that Jio has entered into a long-term alliance with Microsoft. The Jio-Microsoft alliance will look to accelerate digital transformation with the launch of new cloud datacenters. Jio will set up network data centers across India powered by Microsoft’s Azure cloud platform. “With Microsoft and Jio, Indian businesses can count on a partnership that will work shoulder-to-shoulder with them in their journey towards becoming digital enterprises of the future.”

Jio will provide a bundle of connectivity and essential business productivity and automation tools to Indian small businesses for 1/10th the cost at Rs. 1,500 per month. Jio will provide connectivity and the Jio-Azure cloud service to Indian technology startups absolutely free.

Jio is setting up a pan-India Edge Computing and Content Distribution network starting with tens of thousands of nodes. Over the next 12 months, Reliance Jio will install one of the largest blockchain networks in the world in India, with tens of thousands of nodes operational on day one. Jio will provide unlimited ISD calling service from Jio landline at a fixed monthly rental of Rs. 500 to US and Canada.

Jio also plans to set up an institute. “Jio Institute will be the country’s largest research university”, said Ambani. Also at the AGM new mixed reality (MR) headsets were shown. The product will be available in the market soon.

Talking about Reliance’s TV broadcast business through the JVs Viacom18, AETN18 and Network18 Ambani said that the company created one of India’s largest broadcast portfolios and digital media offerings across platforms.

“Our 72 television channels reach 800 million Indians, representing more than 95% of the TV-viewing universe. Our News18-branded TV news platform is the largest by regional footprint, ratings or revenue. “Our entertainment portfolio, led by Colors, has grown in stature, with its mass and niche offerings. Network 18 is among the top digital media players in the country, with one in four Indians on our websites or apps, across Moneycontrol, Firstpost, Voot, and many others.”

As mentioned earlier Jio’s parent Reliance Industries’ aim is to become a zero net debt company by 31 March 2021. “As we achieve our zero net-debt target this financial year, I assure you my dear shareholders that we will reward you abundantly through higher dividends, periodic bonus issues and other means, and at a more accelerated pace than any time in our history.

“Based on the new and existing growth engines, we can grow EBITDA by 15 percent annually over the next five years,” said Ambani.

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