Over the last couple of years, Reliance Industries‘ annual general meeting has turned into a tech showcase event, garnering the same excitement from consumers that one sees in flagship technology events like Apple’s Worldwide Developers Conference or Google’s I/O developer conference.
This shift comes at a time when Reliance Industries Chairman and Managing Director Mukesh Ambani is trying to position Jio Platforms as a tech company in the same league as Internet giants Facebook and Google, ahead of a potential public offering in the forthcoming future.
Google’s $4.5 billion bet
Internet giant Google has jumped on the fundraising bandwagon of Jio Platforms by investing Rs 33,737 crores ($4.5 billion) for a 7.7% stake. This is part of the Internet giant’s $10 billion India Digitization Fund announced earlier this week.
“This is the first and the biggest investment we will make through this fund,” Alphabet chief executive Sundar Pichai said via a video message on Wednesday.
It’s worth noting that Google has come in at a lower valuation of Rs 4.36 lakh crore for Jio Platforms, while the majority of the investors came in at Rs 4.91 lakh crore. Facebook’s $5.7 billion deal also valued the firm at Rs 4.62 lakh crore.
This investment takes the overall fundraising by Jio Platforms to Rs 1,52,056 crore in less than three months. With the Rs 53,124.20 crore rights issue and Rs 7,629 crore from energy major BP towards its fuel and mobility joint venture, Reliance Industries has raised a total of Rs 2,12,809 crore.
The funds have helped Reliance achieve a debt-free status, much ahead of its target of March 2021. Read more.
Read: We are committed to recognise local talent and entrepreneurial ventures in India: Sundar Pichai
New entry-level smartphone bet
Jio Platforms has also signed a commercial agreement with Google to jointly develop entry-level 4G/5G affordable smartphones with optimizations to the existing Android operating system and Play Store keeping India users in mind.
“As India is standing at the doorsteps of the 5G era, we should accelerate the migration of 350 million Indians, who currently use a 2G feature phone, to an affordable smartphone,” Ambani said, adding that these smartphones will be available for “a fraction of its current cost”.
Jio’s own feature phones currently run on KaiOS operating system, which interestingly counts Google among its key investors. Ambani said that they have sold over 100 million JioPhones until now.
Google’s entry-level smartphone initiatives
To be sure, this is not Google’s first effort at getting users to switch to entry-level smartphones. The tech giant had earlier tried it with Android One in 2014 but the initiative failed to gain traction due to weak sales, following which the interest among its early hardware partners waned.
After this, Google had debuted Android Go in 2017, which was essentially a stripped-down version of its Android operating system specifically optimized for entry-level smartphones. Earlier this year, Google had announced that the Android Go platform now has 100 million users. Read more.
Homegrown 5G plan
Reliance Jio has designed and developed its own complete 5G solution from scratch and will be ready for trials as soon as 5G spectrum is available and for field deployment by next year, Ambani said.
“This will enable us to launch a world-class 5G service in India using 100% homegrown technologies and solutions,” he said. “Once Jio’s 5G solution is proven at India-scale, Jio Platforms would be well-positioned to be an exporter of 5G solutions to other telecom operators globally, as a complete managed service.”
What’s the significance?
This development comes at a time when India is looking to cut down on its imports from countries like China, after a call for “Atmanirbhar Bharat” (Self-reliant India) by Prime Minister Narendra Modi.
Analysts told ET that this move is perhaps a global first where a mobile phone company has developed in-house technology to replace third-party equipment vendors. It also brings in cost-related advantages for the firm.
Reliance had earlier acquired US-based telecom solutions provider Radisys for $74 million in 2018 and recently merged it with its own subsidiary Rancore Technologies to strengthen its 5G and IoT capabilities. Read more
JioMart expansion
RIL is accelerating the rollout of its new commerce initiative JioMart to cover other sectors including electronics, fashion, pharmaceutical and healthcare. The company is also working on scaling its geographical reach and delivery capabilities.
Currently in beta, JioMart is available in 200 cities and is clocking over 250,000 orders a day, Ambani said. “In the coming years, we will cover many more cities, serve many more customers across India, and expand to many more categories.”
“JioMart is a tech-enabled partnership that will link producers, traders, small merchants, consumer brands and consumers. Connecting farmers and delivering their fresh produce directly to homes is a key part of our grocery strategy,” he said.
Ambani also said that they have received “strong interest from strategic and financial investors in Reliance Retail” and will induct global partners and investors in the unit in the next few quarters.
Why is it important?
This announcement comes a day after Flipkart Group closed a $1.2 billion financing from Walmart-led investors to grow its commerce business. Rival Amazon has also invested more than $5 billion in India since 2013 and founder Jeff Bezos committed another $1 billion to help 10 million Indian small and medium businesses to sell online earlier this year.
India’s e-commerce industry has also witnessed a sharp recovery over the past few weeks after the lockdown curbs were eased and a large number of consumers preferred to make online purchases.
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Things to watch out for
JioMeet and Embibe: A cloud-based video-conferencing app JioMeet and their education technology platform Embibe will help students avail quality education online. Ambani said that JioMeet has notched up 5 million downloads so far.
JioGlass: A mixed reality headset that will enable users to conduct classes, make video calls, and host meetings in a 3D holographic environment. To make it more appealing, users can also use 3D avatars in their virtual world.
JioTV+: The new Apple TV-lookalike platform would aggregate content from over 12 video streaming services such as Netflix, Amazon Prime, Disney+ Hotstar, Voot, SonyLiv, Zee5, JioCinema, JioSaavn and YouTube among others
JioHealthHub: Through this offering, customers can avail healthcare services like booking online consultations, securely store and share health records and booking lab tests and more. Jio has booked more than 1,500 consultations in four weeks on the platform.
(Illustrations and graphics by Rahul Awasthi)
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