Business

Reliance Jio decide to buy big to mark their entry in the broadband sector

Reliance Jio changed the face of the Indian telecom industry overnight. The company announced free 4G data for three months to all its users and this caused a frenzy in the Indian market. No other competitor was ready for this. The prices of the internet packs per gigabytes also hit an all-time low because of the Jio revolution.

This overnight change in the industry had the likes of Airtel, Vodafone, and Idea on the ropes. They had to come up with even better plans as they were struggling to cope with the users shifting to Reliance Jio and its free network. Since its start from 2016, Jio has amassed up to 252 million subscribers to its network. It has reached all parts of India and the target consumers for Jio were the tier 2 and tier 3 cities as well.

This Jio revolution was just the start for the Indian company. They were rapidly expanding and after the free plan was over they offered the prime membership with a lot of benefits like JioTV, JioMusic, and also the MyJio application which allowed users to get cash back on recharge. The prime membership and the rewards which came with it were coming at a very handy cost. It was not too expensive and not too cheap as well, they had managed to hit the right price and it hasn’t increased ever since.

Reliance Jio recorded an INR 271 crores loss a year ago, however, that has changed this year. The company recorded a profit of INR 681 crores. Jio has 2.20 lakh towers in India. It also has around three lakh kilometers of optical fiber assets. The Mumbai-based company has also launched its smartphone line with their own operating system. The phones are not flagships but are made for the consumers from the rural areas. The company claims that Jio sim cards work the best with these phones.

That said, the 4G market is currently dominated by Jio but apart from this, it is the only company which has the infrastructure to shift to a 5G network. The Telecommunication Regulatory Authority of India (TRAI) has said that it will regulate 5G till 2022, however, Reliance Jio has the ability to do it even before that. Qualcomm recently announced its latest 5G world takeover where the 5G revolution will take place all over the world except India.

The Mukesh Ambani owned Reliance Jio can, therefore, become the first company to get 5G in India. This rumor is also fuelled by the fact that Jio buys all of its networking products from Samsung. Like other telecommunication companies buy network equipment from Huawei or ZTE, Jio has a deal with Samsung. And Samsung being one of the first companies to bring in 5G phones, Jio can also be one of the first companies to bring 5G in India.

However, Jio has different things on its plate right now. The company is planning to expand in a different sector altogether. It has recently announced that it will acquire stakes in two broadband network companies; Den Networks and Hathway Cable. Jio will acquire 66% and 51.3% in Den Networks and Hathway Cables respectively.

The purchase is going to cost Reliance around INR 5230 crores. Out of those INR 5200 odd crores, INR 2290 crores will be for Den Networks and INR 2940 crores will be for Hathway Cables. Anil Ambani, brother of the richest man in Asia announced a deal in December of 2017. Reliance Communication owned by the younger Ambani sold its physical assets worth INR 3000 crores to Mukesh Ambani.

The deal consisted 122.4 MHz of 4G spectrum in around 800/900/1800/2100 MHz bands. There was around 178,000 kilometers of fiber and around 43000 towers and 248 media convergence nodes as well. This was the clearance of Reliance Communications department and this deal took place between Reliance Communications and Reliance Jio. The above purchases only point towards Jio’s entry in the broadband sector.

– Unmesh Phule

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