5 more years for Mukesh Ambani - What it means for Jio?

PCQuest - - CONTENTS - Ibrahim Ah­mad | ibrahima@cy­ber­me­dia.co.in

Mukesh Ambani’s de­ci­sion to con­tinue as the CMD of the com­pany for an­other 5 years (with an an­nual salary of Rs 4.17 crore and Rs 59 lakh of perquisites and al­lowances), also means that high oc­tane ac­tion in In­dian tele­com and dig­i­tal life­style in­dus­try is far over, per­haps to the dis­com­fort of ri­vals like Air­tel, Voda­fone and Idea (so on to be Idea-Voda­fone).

Reliance Group is not just cash rich, but more than that Mukesh Ambani, who leads from the front is a man who strongly be­lieves in in­no­va­tion, dis­rup­tion, and a mass mar­ket ap­proach. His ear­lier stint when he launched Reliance Com­mu­ni­ca­tions (later taken over by younger Anil Ambani in 2005 when they parted ways) was the first time when he shook the tele­com in­dus­try with his tech­nol­ogy and price of­fer­ings. And in the sec­ond stint when he per­ceived

and launched Jio, he has once again dis­rupted the in­dus­try and is com­pletely chang­ing the rules of the game. The fi­nal ben­e­fi­ciary will be the con­sumer, but for Reliance group Jio could turn into a mint.

Ambani hopes that his con­sumer busi­nesses— Reliance Jio In­focomm Ltd and Reliance Re­tail Ltd— will con­trib­ute on par with its en­ergy and ma­te­ri­als busi­nesses over the next decade. Al­ready Reliance’s con­sumer busi­nesses has at­tained a thresh­old from which they will start con­tribut­ing mean­ing­fully to con­sol­i­dated prof­its. From a mere 2% in FY17, Reliance Jio and Reliance Re­tail (which has a sig­nif­i­cant dig­i­tal com­po­nent) ac­counted for 13.1% of RIL’s con­sol­i­dated seg­ment Ebitda in FY18. Reliance Jio, that started in late 2016, turned prof­itable in the very first year of op­er­a­tions. Jio earned a net profit of ₹723 crore on a turnover of ₹23,714 crore in its first year of com­mer­cial op­er­a­tions. Reliance Jio had 186.6 mil­lion cus­tomers at the end of March 2018, and the low­est churn in the in­dus­try at 0.25% per month. Each Reliance Jio sub­scriber on an aver­age con­sumes 9.7GB data, 716 min­utes of voice calls, and 13.8 hours of video per month. Jio also re­cently an­nounced en­ter­prise so­lu­tions, FTTH, and IOT, with beta tri­als ini­ti­ated in a few lo­ca­tions.

Reliance Re­tail has the dis­tinc­tion of op­er­at­ing the largest con­sumer elec­tron­ics store chain in In­dia through a net­work of over 5,700 Reliance Dig­i­tal and Jio stores of­fer­ing over 200 na­tional and in­ter­na­tional brands of­fer­ing a widest as­sort­ment of prod­ucts span­ning across au­dio & video prod­ucts, dig­i­tal cam­eras, gam­ing con­soles & games, com­put­ers, lap­tops, tablets & pe­riph­er­als, mo­bile and fixed line in­stru­ments as well as a wide range of ac­ces­sories and new-age gad­gets across all ma­jor prod­uct cat­e­gories, be­sides con­sumer durables. It also has ResQ, the ser­vice arm which is a full-fledged ser­vice or­gan­i­sa­tion and is In­dia’s first multi-prod­uct, multi­brand and multi-lo­ca­tion ser­vice net­work that pro­vides so­lu­tions en­com­pass­ing end-to- end prod­uct life cy­cle re­quire­ments for the en­tire range of dig­i­tal prod­ucts dig­i­tal and con­sumer durables prod­ucts and other value-added ser­vices. It has built the largest dis­tri­bu­tion reach for de­vices in In­dia. Reliance Re­tail has de­vel­oped a strong port­fo­lio of prod­ucts of­fered under its own la­bel Re­con­nect. Reliance Re­tail of­fers a wide range of 4G LTE smart­phones and 4K TVs under its own brand LYF. The LYF range of smart­phones of­fers fea­tures like Voice over LTE ( VoLTE), Voice over Wi-Fi ( VoWi-FI), HD Voice and HD qual­ity video call­ing. Jio Stores caters to the rapidly grow­ing mar­ket for mo­bil­ity and com­mu­ni­ca­tion prod­ucts of­fer­ing a wide range of mo­bile phones, tablets and ac­ces­sories. Within a short span of time Reliance Jio Stores has grown to be­come In­dia’s largest re­tail chain with presence in over 3,700 cities.

Ev­ery­body, in­clud­ing Mukesh Ambani’s em­ploy­ees, part­ners, and ri­vals unan­i­mously agree that Ambani not just per­ceived and con­cep­tu­al­ized Jio be­cause of his vision of a dig­i­tal world and the op­por­tu­ni­ties it will throw up; but also that he has been a hands on man who has lead the com­pany in terms of all the path break­ing tech­nol­ogy and busi­ness mod­els. That he will be per­son­ally driv­ing and mon­i­tor­ing al­most ev­ery small and big tech­nol­ogy and busi­ness de­ci­sions for an­other five years is great news for Jio, but cer­tainly not for its com­peti­tors in the mar­ket,who are al­ready under se­vere pressure.

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