Five-and-a-half years ago, billionaire Mukesh Ambani-led Reliance Industries Ltd (RIL) announced its intentions to re-enter the telecom space by offering fourth generation (4G) broadband wireless service. The size, scale and affordability of the offering that RIL spoke of promised to shake up the telecom market in India.
On Sunday, the oil-to-yarn and retail conglomerate inched a step closer to realising its ambition of becoming a leading telecom player in the country with the announcement that its subsidiary Reliance Jio Infocomm would roll out 4G services for its vendors, business partners, employees and their families beginning on Monday, December 28, which happens to be RIL’s late founder chairman Dhirubhai Ambani’s birth anniversary. Over 1 lakh new connections were activated during the event held on Sunday.
Incidentally, 13 years ago on this date in 2002, RIL had first entered the telecom business through Reliance Infocomm and revolutionised it in the process of realising Dhirubhai Ambani’s dream of making mobile calls in the country cheaper than postcards. In 2005, as part of a family agreement, the telecom business went to Mukesh Ambani’s younger brother Anil. That company is now known as Reliance Communications.
This time round, Jio (the brand name for Reliance’s telephony services) promises to revolutionise the telecom market yet again by making mobile data services cheaper than ever before and accessible to a wide cross-section of India’s population cutting across geographic and economic boundaries. Also, Jio isn’t going to be a mere provider of mobile broadband and voice network. It aims to offer users a complete digital experience by bundling in content with the connection and enabling digital services, including in the fields of financial services, health care and education.
Reliance has invested close to $15 billion in its new digital business so far and is banking on high volumes in subscriber base and data traffic to drive revenues and profitability.
Analysts who have tested Jio’s network are impressed with its quality. A December 14 research report by Credit Suisse (CS) noted that the quality of Jio’s network was at par with those of incumbents. Even while travelling at high speed on a highway, the call quality was good, without any drop, the brokerage’s analysts noted in their report.
“We experienced peak download speed of 70 megabytes per second (mbps) during our trials, and on most occasions in the 15-30 mbps range (even on the move),” the CS report said and noted that the downloaded speeds recorded were higher than those offered by the data services of competitors.
The soft launch of Reliance Jio’s services took place through a gala event held at Reliance Corporate Park in Navi Mumbai on Sunday. Around 35,000 Reliance employees and their families were physically present at the launch, and another 80,000 from across India were tuned in to the event through video conferencing. Jio’s brand ambassador and Bollywood superstar Shah Rukh Khan anchored the event and music director AR Rahman performed at the event.
Also taking centre-stage at the event were Mukesh Ambani’s children Akash and Isha Ambani. Members of the business family’s third generation, Akash and Isha are playing a key role in shaping the new-age business of digital convergence at the conglomerate.
Addressing the gathering, RIL chairman Mukesh Ambani said that India was ranked 150th out of 230 countries in the world when it came to internet and mobile broadband penetration and “Jio is conceived to change this”.
“1.3 billion people cannot be left behind as the world enters a new era. We have the youngest population in the world. Give them the tools. Give them the skills. Give them the environment. They will surprise us,” Ambani said. “Jio will help realise the potential of every Indian and India.”
With the launch of Jio, India’s ranking in the global pecking in terms of internet and mobile broadband penetration will rise from 150 to among the top ten in the next few years, Ambani stated.
The RIL chairman said that at present, nobody believes Jio will have 100 million customers in the first year of operations (analysts expect Jio to begin full-scale commercial operations by March 2016, though Ambani didn’t offer a launch date at the event), but “we will accomplish it because we believe”.
Disclaimer: Reliance Industries is the owner of Network 18, publisher of Forbes India
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