India's Reliance Industries Boosts Investment in Mobile Startup to $22.5B
Indian tycoon Mukesh Ambani describes Reliance Jio as “the world's largest startup” offering speedier 4G mobile and digital services.
Indian tycoon Mukesh Ambani, chairman of conglomerate Reliance Industries Ltd., said the company will invest $22.5 billion (1.5 trillion rupees), nearly $10 billion more than previously announced, to build out mobile and digital services unit Reliance Jio Infocomm.
The national mobile broadband platform is seen as a possible game-changer that could boost mobile video consumption.
Ambani gave the keynote address on Wednesday at the opening of the three-day annual Ficci Frames conference in Mumbai.
RIL's core interests are in petrochemicals and other businesses, but in 2014, the group diversified into media by acquiring a controlling stake in Network18, Viacom's Indian partner. The Viacom18 joint venture includes a broadcast network and a film unit and runs MTV India, Comedy Central India and Hindi entertainment channel Colors, among others.
Mukesh's younger brother Anil Ambani heads the Reliance ADA group, which is part of the new alliance with Steven Spielberg's DreamWorks, Jeff Skoll's Participant Media and Entertainment One that formed Amblin Partners. Reliance ADA's association with DreamWorks started in 2009 when it originally invested $325 million in the company.
RIL's foray into mobile and digital services with Reliance Jio Infocomm was first announced along with an initial investment of $12.8 billion in April last year, which has now been expanded. The venture was supposed to be launched last December when RIL employees were given free connections to test the service. While Ambani didn't give a final launch date — though there is speculation it may unfurl later in the year — he described Reliance Jio as “the world's largest startup.”
“Today, India is ranked 150th in the mobile Internet access rankings out of 230 countries in the world,” said Ambani. “We have the responsibility to digitally empower India. To end this digital poverty, 1.3 billion Indians cannot be left behind as the world enters a new era.”
He named four key reasons that would help achieve this goal: coverage, quality, data and affordability. “I’m sure with all our industry partners and the efforts Jio is making, India’s high-speed mobile coverage will be over 90 percent by the end of 2017,” he said. "From day one”, the service would offer speeds “that are 40-80 times faster” than current speeds.
As for data consumption, he cited that the current consumption of 0.15 GB per annum per user would be catapulted to over 10 GB, an almost hundred-fold jump. Without giving any pricing details, Ambani said Reliance Jio aims to be “very, very affordable.”
While content details were not spelt out, Ambani said the service's media offerings “will include the most comprehensive library of programming of live and recorded music, sports, live and catch up television, movies and events.”
India's digital landscape is rapidly changing with major players launching services such as Netflix, 21st Century Fox's Star India-backed hotstar, Viacom18's Voot, Sony Entertainment Television's Sony Liv, leading major Eros International's ErosNow and Hooq, backed by Warner, Sony and Singapore Telecom.
With this year's Ficci Frames conference theme titled as “Change or perish — The year of digital,” in his keynote speech, Star India CEO Uday Shankar also pointed to the potential of digital growth.
He cited that within a year of launch, the hotstar service has seen over 50 million downloads. Without giving further viewership details, Shankar said: “Consider this — more people have watched the English Premier League on hotstar last year than on television.” Given that cricket is India's national obsession, Shankar also added, “Even for a mass sport like cricket, in the larger cities, hotstar’s watch time is now starting to reach 50 percent of television.”