Airtel shares sink on RJio 5G bedrock, RIL's on deal delay

As Reliance Jio Infocomm secured an early place in the 5G race, shares of rival Bharti Airtel lost footing today, but the technological leap failed to enthuse shareholders of parent Reliance Industries, who were more worried about a delay in the deal with Saudi Arabian Oil Co.

At the annual general meeting, RIL Chairman Mukesh Ambani announced a foray into self-designed and self-developed 5G solutions, claiming that Jio Platforms' all-IP network architecture would be easily able to upgrade itself to 5G from the current 4G, likely without much additional hardware costs.

However, shares of RIL closed 4% lower at 1,844 rupees as investors booked profits after discovering that adverse conditions in the global energy market due to the pandemic have delayed Saudi Arabian Oil Co's investment in the company.

RIL has signed an agreement with Saudi Arabian Oil Co, known as Saudi Aramco, to sell up to 20% stake in its refining and chemical business at an enterprise value of $75 bln. However, the significance of Reliance Jio's 5G strategy and partnership with Google and other technology companies like Qualcomm was not lost on Bharti Airtel's investors.

Its shares ended 4.4% lower at Rs 563.60. Jio Platforms' plan is to become a digital ecosystem that houses all solutions for its user base, acquired through Reliance Jio Infocomm Ltd, and then later monetising these platforms in a way similar to global technology giants such as Facebook, Amazon, and Google, said analysts.