Venkatesh Iyer/Aditya Hore
Bengaluru/Surat: When all other industries were going down in the dumps during the global pandemic-inflicted lockdowns, Reliance Industries Ltd (RIL) utilized the period to make itself debt-free and brace for an ambitious rollout of 5-G across the country and challenge Amazon next year.
With the West and many other countries distancing themselves from the Chinese giant Huawei, Reliance Jio has discovered an opportunity in this crisis and has cracked various investment deals to make itself debt-free. It is now looking at a commanding future by partnering with the global tech giants like Google and Facebook.
Flush with funds, Jio has announced that an indigenously developed 5G network will be launched next year. Its will pit the corporate leader against global technology giants like Huawei and ZTE (China), Nokia (Finland), Ericsson (Sweden) Samsung (South Korea), NEC (Japan), Cisco (USA), Coma Telecom Systems (Hong Kong), Alpha Networks (Taiwan), Siklu Communication (Israel) and others.
Market researchers say the worldwide 5G technology market is anticipated to be at US$ 5.53 billion in 2020 and zoom to US$ 667.90 billion by 2026, registering a CAGR of 122.3% from the year 2021 to 2026.
The Asia-Pacific Region would be the biggest contributor to the global market, worth US$ 2.20 billion in 2020, and US$ 329.09 billion by 2026, registering a CAGR of 130.7% during the forecast period.
The World Economic Forum (WEF) describes 5G as the Fourth Industrial Revolution. Qualcomm claims that 5G will be a bigger revolution than electricity and by 2035, it will be worth US$ 13 trillion of goods and services industry.
With Chinese goods, including smartphones, feeling adverse global climate, Reliance Jio has joined forces with Google to bring 4G and 5G smartphones in the country. It has recently partnered with Google to manufacture affordable, entry-level smartphones and upgrade around 350 million 2G users alongside the consumption of Google Android platform, as it permits them to launch 100 per cent home-grown technologies and solutions.
The new smartphone from this partnership is expected to challenge all leading brands as Reliance Jio is known for disrupting or bringing affordable services in the country. “If history is anything to go by, Reliance will undercut other brands and pose a real threat to the low-end smartphone market,” says Rushabh Doshi of tech researcher at Canalys.
The telecom operator has disrupted the 2G handset market after launching the JioPhone and the JioPhone 2, where there are users that are using the internet for the first time. Chances are that the Chinese smartphone makers, such as Xiaomi, Realme, Vivo, Oppo, and OnePlus might decrease prices of their products under market pressure from Jio.
The corporate giant now exceeds a market capitalization of $150 billion in its lifetime existence of 43 years since its first-ever IPO floated during the year 1977.
Reliance Jio has had tremendous impact on the Indian market since its launch. The venture, backed by India’s richest man Mukesh Ambani, went on to become the top telecom operator and currently holds that position.
The company has raised a total of Rs. 152,056 crores from 14 companies and allowed a little less than 33% stake, making it one of the largest fund-raising exercises by any company in the global history of the corporate world.
During the recent virtual AGM, Ambani asserted that Jio Platforms, with several partners, has built world-class capabilities in technologies like 4G, 5G, cloud computing, Devices and OS, Big Data, AI, AR/VR, Blockchain, and more.
Employing these know-hows, the firm hopes to create fascinating solutions that span multiple industry verticals and ecosystems like media, financial services, new commerce, education, healthcare, agriculture, smart cities, smart manufacturing, and smart mobility.
Besides, RIL is also trying to buy Future Group’s retail business. According to reports, the deal is stuck at the 30% haircut being demanded by Reliance. That is, if the deal goes through, RIL would repay only 70% of the debt of Future Retail but get a strong offline distribution network. It will be beneficial to expand JioMart, which, with technological assistance from Facebook and Google, would be able to capture the online as well as offline Indian retail market.
That is where Reliance will give a competition to Amazon, which currently holds the lion’s share of the Indian e-commerce market. Jio Mart might soon become a part of the super app that will be jointly developed by Jio and Facebook.