The Mumbai-based oil-to-telecom conglomerate is betting big on fixed-line, fibre broadband to emerge as an ultimate destination for entertainment, e-commerce and more.
The Mumbai-based oil-totelecom conglomerate is betting big on fixed-line, fibre broadband to emerge as an ultimate destination for entertainment, e-commerce and more.
After shaking mobile telephony with free voice calls and dirtcheap data, richest Indian Mukesh Ambani is now focusing on a new broadband plan. Mr Ambani, the chairman and managing director of Reliance Industries (RIL), has unveiled an ultra-high-speed, fixed-line, fibre broadband for homes and enterprises across 1,100 cities. He has also announced plans for an e-commerce platform that may rival the likes of Amazon.
The new products and services, alongside strengthening of the mainstay energy and petrochemicals business, will help double the oil- totelecom conglomerate's revenue to over Rs 8,50,000 crore by 2025. "As India starts on its high-growth journey to double the size of its economy by 2025, I assure you that the size of Reliance will more than double in the same period," the RIL chief revealed to his shareholders in Mumbai last month.
Addressing a huge gathering at RIL's annual general meeting (AGM) in Mumbai, Mr Ambani added that customers can start registering for the fixed-line broadband from August 15. However, he did not give a launch date for the service, which through one fibre is expected to provide high-speed internet, ultra-high-definition entertainment on large-screen TVs, multiparty video conferencing, voice-activated virtual assistance, virtual-reality gaming and digital shopping as well as smart-home solutions.
Jio GigaFiber, the fibre broadband of RIL, is set to offer ultimate broadband experience to surf, stream, game and work because of its ultra-fast upload and download speeds and effective functioning in milliseconds. It will come directly to homes unlike in most cases, where the fibre reaches only until a building, and the last few metres of end connectivity is done using the traditional cable. This drastically reduces speed and user experience due to patches and inferior cable qualities of such a patch-up.
Reliance Jio Infocomm, Reliance's telecom services subsidiary, will move India to the world's top-five nations in fixed-line broadband in the coming year, Mr Ambani has stressed. He has, however not given any specifics about pricing of the new product or its launch date. "We are currently running beta trials in tens of thousands of homes," the RIL chief has revealed.
"While India has pole-vaulted into global leadership in the mobile broadband space, we still lag behind significantly in fixed-line broadband. India is ranked quite low at 134th in the global ranking for fixed broadband. Poor fixed-line infrastructure has been a key reason for this," Mr Ambani has said.
With over Rs 2,50,000 crore already invested in digital infrastructure for providing mobile and broadband connectivity across the country, fibre broadband connectivity will now reach homes directly. Jio's launch in September 2016 has already made India the highest mobile data-consuming nation.
Mr Ambani has also announced the second-generation JioPhone with added features, like qwerty keypad and messaging services, like WhatsApp, Facebook and YouTube. The phone will be available for booking from August 15 for Rs 2,999. This will be in addition to the JioPhone, which will continue to be available on payment of a Rs 1,500 refundable security deposit. The RIL chief has said that old feature phones can be exchanged for the new JioPhone for just Rs 501 under the new offer called Jio Monsoon Hungama.
A new platform
RIL's traditional oil and gas and petrochemicals business still commands a lion's share of its total revenue. The company is nearing the end of its largest-ever investment with the commissioning of the world's largest paraxylene complex, petcoke gasification project and an off-gas cracker. Besides, the company is set to start its butyl rubber project later this year.
"It is our belief that with the rapidly- increasing demand for petrochemicals, maximising oil-to-chemicals conversion will play a catalytic role in determining the profitability of hydrocarbons businesses of the future," notes Mr Ambani. As the world migrates from fossil fuels to renewable energy, RIL too is looking at maximising this oil-to-chemicals conversion and upgrade its fuels to highvalue petrochemicals. RIL and its partner BP are working to produce 30 to 35 million standard cubic metres per day of gas from satellite fields in the KG-D6 block by 2022.
Meanwhile, Mr Ambani has set an ambitious target to garner about 50 per cent of its total revenue from nonoil businesses. Though a tall target at present, given its non-oil businesses accounting for a minor share of its total revenue, the company is moving at a rapid pace towards that goal. "Reliance has reached an inflection point. As the Golden Decade rolls on, our consumer businesses will contrib-
"As India starts on its high-growth journey to double the size of its economy by 2025, I assure you that Reliance's revenue will more than double to over Rs 8,50,000 crore in the same period."
MUKESH AMBANI, CMD, RIL
ute nearly as much to the overall earnings of the company as our energy and petrochemical businesses, emphasises Mr Ambani.
In fact, RIL has been enhancing its focus on the two consumer-facing businesses - retail and telecom - in the last year and their combined contribution to the company's margins has jumped to 13 per cent in a single year from just 2 per cent in the previous financial year. While there is robust growth in telecom, it is also a highly capital- intensive business, leaving retail to bring in a disproportionate share of increased revenues.
Reliance Retail, with 35 crore footfalls at its 7,500 stores last year is one of the country's largest, fast-growing retail companies. In the last one year, Jio's customer base has doubled to 21.5 crore, and 2.5 crore JioPhones have been sold. The company is targeting to achieve 10 crore JioPhone users in the shortest span of time. According to Mr Ambani, Jio has enabled data usage to grow from 125 crore gigabytes (gb) per month to more than 240 crore gb per month, making India the world's largest mobile data network.
No wonder then that Mr Ambani is planning to have an integrated platform to bring together 35 crore Reliance Retail customers, 21.5 crore Reliance Jio customers and nearly 3 crore small merchants and shopkeepers from all across India. "As Reliance transitions to become a technology platform company, we see our biggest growth opportunity in creating a hybrid, online-to-offline, new, commerce platform. We shall create this by integrating and synergising the power of Reliance Retail's physical marketplace with the fabulous strengths of Jio's digital infrastructure and services," stresses the RIL chairman.
This is quite an ambitious goal, considering that none of the global retail bigwigs, such as Wal-Mart or Carrefour or Amazon, has an integrated platform for e-commerce, which can seamlessly connect online with offline. Mr Ambani is well aware that data is the new oil. So, he is naturally betting on Jio and soon- to- be launched Jio GigaFiber to work wonders just as its Jamnagar refinery did nearly 20 years ago.