When will MTNL release 4G
telecommunications: Why US Tech Firms Are So Hot For Jio
Mukesh Ambani loves daring promises. Such as getting his company Reliance Industries out of debt in just a year and a half. This was the bet made by India's most successful industrialist last year at the annual general meeting in front of thousands of investors. The former energy company had previously accumulated more than US $ 20 billion in debt.
Then in mid-June the big surprise. "Reliance is now debt free"announced the 63-year-old just ten months after his promise. Numerous investors had previously brought fresh capital into the Indian conglomerate, including such well-known corporations as Google and Facebook, the Saudi state fund and the prominent investor KKR. The total of 13 investors invested US $ 20.2 billion in just eight weeks. The money flowed primarily into the Reliance offshoot Jio Platforms, probably India's most ambitious digital project.
Ambani and his overseas investors hope to grow Jio into India's leading telecommunications provider. Similar to the successful Chinese company Alibaba, Reliance's digital subsidiary is set to catch up with Asia's big players. The company has recorded 388 million mobile phone customers since it was founded four years ago - more than any other company in the country. In contrast to the competition, the mobile phone providers Bharti Airtel, Vodafone Idea and BSNL-MTNL, Jio operates neither in the 2G nor in the 3G network. Instead, Ambani relies on high-performance Voice-over-LTE technology and an FTTH network to offer its services on the go and at home.
"India will change forever"
Thanks to an additional 5G solution due to be launched in 2021, the customer base could grow to half a billion in the next three years. The US analysis company Bernstein even expects that Jio could control half of the Indian market with a potential customer base of almost 1.4 billion people by 2025. A profitable business for Ambani, who is considered the richest man in Asia with an estimated net worth of $ 80 billion.
- ivv GmbH, Hanover
- University of Applied Sciences Bonn-Rhein-Sieg, Sankt Augustin
The fact that Jio Platforms has become the market leader in just four years and even outshines long-established competitors such as Vodafone is primarily due to its offerings. Initially, Jio used free plans to attract new customers. After that, competitive prices for smartphones and data, as well as the option to make free calls, ensured steady growth in users. Jio's aggressive pricing policy reduced the price of a gigabyte in India from the equivalent of just under 5 euros to just 14 cents. "India will change forever", predicted Ambani when Jio entered the market in 2016.
Today, four years later, Jio has long been more than just a telecommunications provider. In keeping with Alibaba's motto of penetrating as many areas of customer life as possible, Ambani Jio has long since expanded into a digital platform for trade and entertainment. With Jio Mart, for example, groceries and household goods can be ordered home with a simple click of the mouse. Jio Saavn promises a music experience like on Spotify. Jio Cinema is confusingly similar to its US streaming counterpart Netflix. And via Jio Meet, customers can hold video conferences like the American provider Zoom.
Jio is becoming a super operator, says an analyst
The wide range makes Jio not only the market leader, but also a decisive driver of the digitization of India. "Jio is a good example that telecommunications operators and internet giants are getting closer and closer together", said Varun Mishra, analyst at Counterpoint Research, Golem.de. Instead of just offering networks, more and more telecommunications providers are relying on their own solutions and products. "Jio is turning into a super operator right now."
The fact that the platform became so successful within a short period of time is also due to Ambani himself. At the age of 45, he inherited the parent company Reliance Industries, previously a successful textile and petrochemical company, which he expanded into India's leading conglomerate in just a few years. With the purchase of the network operator IBSL, which specializes in mobile communications, he entered the telecommunications sector in 2010. A little later, Ambani expanded India's 4G infrastructure to dominate the industry. The country now has more than a billion mobile phone contracts, thanks in part to Jio. For comparison: the number of landline connections is just 21 million.
The changes that Ambani has initiated hold incredible potential. With 600 million Internet users, the country with 1.4 billion people is one of the most promising markets in the world. According to McKinsey, up to 435 billion US dollars, or ten percent of India's gross domestic product, can be earned here in 2025.
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