RIL 2.0:

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.

India Business Journal - - CONTENTS - IBJ BUREAU

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.

Data push

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."


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.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.