manufacturing petroleum products.
At the same forum, Ambani
also said it was only four years ago
that he “truly understood the true
meaning of the term exponential”,
adding, “I believe we are on the verge
of exponential change, where we
have the opportunity to solve large
problems in a short span of time.”
Few would have imagined how the
key themes of Ambani’s talk—data
and exponential change—could come
together to change the paradigm
of India’s telecommunications
industry and alter the way in which
Indians consume data. Yet, over the
last one year—since Reliance Jio
Infocomm (Jio), RIL’s broadband
wireless and digital services company
commenced operations—that is
exactly what has happened.
It took Jio a while to
get to this point.
RIL announced its foray into
telecom in 2010 after it acquired
Infotel Broadband, a company that
had won pan-India wireless airwaves
through a government auction. The
next six years were spent building
and testing a greenfield ecosystem
using the latest technology,
including partners, vendors, and an
infrastructure network comprising
optic fibre cables and transmission
towers. The ambitious project, on
which the oil-to-yarn and retail
conglomerate has spent close to
`2 lakh crore, had its fair share of
naysayers along the way as well. Some
doubted whether diversification away
from the core oil refining, marketing
and petrochemicals business was
prudent; others questioned whether
the world’s first all-IP (internet
protocol) network over VoLTE (voice
over LTE) that Jio was building
would work, since there was no
global precedence of the same.
But those speculations have been
put to rest as Jio has managed to build
a ground-up 4G (fourth generation
mobile telephony) network with138.6 million subscribers consuming
1.25 billion GB of data a month and
2.67 billion minutes of voice calls
a day—among the highest in the
world—since it started commercial
services in September 2016.
Despite the fact that RIL’s fledgling
telecom venture is yet to report a
profit (on a net, full-year basis), the
value that investors foresee accruing
to the company from this business
is evident. In the last one year (till
October 24, 2017), RIL’s share prices
have soared by as much as 79 percent
to `947 per share. It is little surprise
then that not only is Ambani the
richest person on the 2017 Forbes
India Rich List with a personal net
worth of $38 billion, he is also the
highest gainer of wealth in absolute
dollar terms, adding a staggering $15.3
billion to his net worth. Much of this
gain in Ambani’s wealth, which is
also a reflection of the rise in RIL’s
market value, has been on account
of the value investors have ascribed
to Jio. “Mukesh Ambani is doing
for India’s poor what Steve Jobs did
for America’s rich,” remarked one
commentator last July after Ambani
unveiled the cut-price JioPhone.
The new telco on the block has not
only redefined the rules of the game—
by drastically reducing the cost of data
and offering voice calls for free—but
has also shaken up the telecom sector.
Owing to Jio’s competitive
onslaught and the incumbents’
response, the volume of data
consumed in the country has grown
nine times to 4.3 billion GB in the
April-June quarter, says analyst Rohit
Chordia, in a Kotak Institutional
Equities research report dated
October 4. Further proof that most
of the new mobile data consumption
in the country is happening in the
high-speed band is evident in the
fact that 40 percent of the data
subscriber base is on a LTE (4G)
network, accounting for 80 percent
of the data consumption in theMukesh AMbAni
chairman, reliance
industries ltd
Age: 60
Rank in the
Rich List
net Worth: $38 billion
significant business
Development Last Year:
unveiling the Jiophone:
a feature phone that will
effectively cost users
nothing, apart from a
refundable deposit of
`1,500 and a monthly
tariff of ` 153
The Way Forward:
realising his vision of
making high-speed and
low-cost data accessible
to all indians through
Jio, and growing the
new company’s rev-
enues and profitabilityAt A glAnce1D
ata is the new oil:
When Mukesh
Ambani, chairman
of Reliance
Industries Ltd
(RIL), made that
statement at the Nasscom India
Leadership Forum in February 2017,
what he meant was that, simply
put, data has the same power to fuel
human capabilities which oil has
had over the last five decades. He
should know: Ambani is, after all,
the leader of India’s largest company
by turnover, which has generated
billions of dollars in wealth over
the years by refining crude andJio has 138.6 million subscribers consuming
1.25 billion gB of data a month currently
december 29, 2017 forbes india | 47