When Mukesh Ambani—the world’s sixth-richest person—and chairman and managing director of India’s largest conglomerate, Reliance, made a slew of big announcements during the company’s 43rd annual general meeting (AGM) on Wednesday, his message was clear: Reliance would dominate everything digital, including 5G, smartphones, mobile operating systems, e-commerce, online services, cloud, and even cutting-edge technologies.
Around 300,000 shareholders from 41 countries who logged into the company’s first virtual AGM cheered at the list of announcements. It included Google’s USD 4.5 billion investment in Reliance’s digital arm Jio Platforms, Reliance’s partnership with Google to launch entry-level 4G and 5G smartphones, homegrown 5G solutions, group’s online retail venture JioMart’s transition from an e-grocery platform to a full-fledged e-tailer, and new video content aggregator platform Jio TV plus, among other things.
Jio Platforms and Google have entered into a commercial agreement to jointly develop an entry-level affordable smartphones with optimizations to the Android operating system and the Play Store, the two companies said.
“Our joint collaboration will focus on increasing access for hundreds of millions of Indians who don’t currently own a smartphone…while improving the mobile experience for all,” said Sundar Pichai, Alphabet and Google chief executive, through a video message during the virtual AGM.
When two Goliaths shake hands
Although it did not come as a surprise, Google’s investment in Jio Platforms was the biggest announcement of the day. The California-headquartered giant has become the 13th investor to come on the Jio Platforms’ cap table in the past 12 weeks. The USD 4.5 billion check that Google wrote for a 7.7% stake is the second-largest investment in Jio Platforms after Facebook. The social networking behemoth had bought a 9.9% stake in Jio Platforms for USD 5.7 billion in April.
The recent transaction values Jio Platforms at an equity value of USD 58 billion, lower than USD 65 billion-valuation at which other investors wrote checks. With this, Jio Platforms has raised total funding of USD 20.2 billion.
Google, which is owned by Alphabet, earlier this week, had unveiled its USD 10 billion India Digitization Fund to accelerate the country’s digital transformation.
“Our investment of USD 4.5 billion in Jio is the first—and the biggest—investment we will make through this fund,” said Pichai.
Read this: Making sense of Reliance-owned Jio Platforms’ fundraising spree
According to Sanchit Vir Gogia, founder and chief executive, technology research and advisory firm Greyhound Research, Google’s investment in Jio is a game-changer for both the companies on many layers spanning devices, search, apps, and commerce.
“Google had launched AndroidOne, a light-weight OS, a few years ago that had failed to deliver. Jio’s reach can plug those gaps,” he said.
Gogia believes, with the myriad of apps owned by Google, coupled with Jio’s presence across telecommunication and retail, the Jio-Google combo would have “a much greater ability to win and own market share across consumers types and network of retailers.”
“For instance, Google maps can be significantly leveraged to improve last-mile delivery which can be a significant differentiator in the e-commerce segment,” he said, adding, this is “a marriage of equals and hence entails massive possibilities.”
It is to be noted that the global tech giant Google and Facebook, which are now Jio Platforms’ backer, and Microsoft, which has a long-term partnership with Reliance Jio, compete on many fronts including video-conferencing, in which Reliance recently made an official entry with JioMeet.
“All these companies will need to tread rather carefully,” said Gogia.“Given all these players are also the market leaders, they can potentially and collectively dominate the digital market which can mean a certain section of the population, rightfully, having concerns with data collection and monetization practices.”
“This is an area that will need much focus and effort on Jio’s part to ensure it can deal with such concerns,” he added.
Viram Shah, chief executive and co-founder of Vested Finance, a California-headquartered investment advisor, believes that Google partnership adds another technology offering to Jio and that Reliance will not only provide phones and telecom network, but also the operating system in devices and a gamut of services ranging from e-commerce to mutual funds to video content.
“Jio is on track to build a truly unique technology ecosystem, something the world might not have seen before,” he said.
A giant web of services
Another bumper announcement from Ambani was that Reliance has already “designed and developed a complete 5G solution from scratch.”
“This will enable us to launch a world-class 5G service in India, using 100% homegrown technologies and solutions,” he said.
This essentially means Reliance would directly compete with Huawei, the Chinese telecom giant that is under scrutiny by various countries, including India, for potential data privacy and security issues in their 5G equipment for mobile networks. India is reportedly weighing a ban on Huawei from participating in India’s 5G network roll-out, amid the increasing tension with the neighboring country.
Ambani said “this made-in-India 5G solution” will be ready for trials as soon as the 5G spectrum is available and can be ready for field deployment by next year.
“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,” he added.
Ambani also laid out future plans for his online retail venture JioMart, which is expected to be a growth driver for the oil-to-retail conglomerate going forward. Currently, JioMart service is available in 200 cities and has reached 250,000 orders a day.
“JioMart is now focused on scaling its geographical reach and delivery capabilities…In addition to grocery, we will expand JioMart to cover electronics, fashion, pharmaceutical, and healthcare in the days ahead.”
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To strengthen its positioning in content space, Reliance launched Jio TV Plus, a new, voice-search-enabled content curation platform for Jio set-up box users that will stream content from over 12 OTT services including Netflix, Amazon Prime, Disney+ Hotstar, Voot, SonyLiv, Zee5, and YouTube, among others. The company said users can watch content on these platforms with just Jio TV+ account without having to use separate logins for each platform.
The company also revealed Jio Glass, a mixed reality eyewear that will enable users to make video calls and host meetings in a 3D holographic environment. Designed by deep tech startup Tesseract, in which Reliance acquired a majority stake a year ago, Jio Glass weighs only 75 grams and is already compatible with 25 mixed reality apps.
According to Kiran Thomas, president of Reliance Industries Ltd, Jio Glass will make teachers and students come together in 3D virtual rooms and conduct holographic classes through our Jio Mixed Reality cloud in real-time.
While the company did not disclose its pricing and availability, Jio Glass is expected to cost USD 200 and can be shipped as early as next month, according to local media Republic World.
Ambani said, the cloud-based video-conferencing app, JioMeet has been downloaded by more than five million users. The company now plans to bring JioMeet together with Embibe, the education technology platform it acquired in 2018, to help students avail quality education online.
“Education is one of the biggest use cases for the newly launched video conferencing platform JioMeet,” said Isha Ambani, Mukesh Ambani’s daughter and director at Jio Infocomm and Reliance Retail.
Reliance’s online healthcare application will be enhanced as well, she said, to include more services to allow users to book online consultations and lab tests as well as securely store and share health. The company had first launched JioHealthHub in 2017 for Jio subscribers and opened it for everyone in 2018.
Now that Reliance is a net zero-debt company, senior Ambani said it has an extremely strong balance sheet that will support his growth plans. And that Jio Platforms will become a significant source of revenue from both the domestic and global markets in the future.
“These are difficult times, no doubt, for India and the world because of the coronavirus pandemic. However, never have I felt more optimistic in my life about a bright future for India, and for Reliance,” he said.
