> Within a span of four years, Reliance pumped in over $33 billion from its other businesses to expand Jio’s market.
> Jio was able to achieve these cheap rates by acquiring the only firm that won a pan-India 4G license, leveraging the superiority and cost-efficiency of 4G compared to older cellular standards, and because of the unparalleled size and resources of its parent company. [emphasis mine]
> A sizable portion of the investments will go toward paying off the existing debts accumulated by Reliance to fund this extravagant project and its other businesses,
Reading between the lines in this article, it sounds like Reliance is simply buying market share by running Jio at a big loss, and temporarily making up the difference with huge investment rounds. I feel like we've seen this show a lot lately and it doesn't always work out.
You are right in your analysis. Jio is using a different accounting approach to show that they are profitable. One - Their depreciation model is non-standard vs. what is used by other telecom companies & Two - They are booking the sales of subsidized devices under their retail subsidy - Reliance retail. If there is someone who understand this better, I would like to get more insight.
No. Jio (and Reliance) have actual paying users who are given genuine services that generate actual genuine revenue. And I doubt that the debt is going to spiral anywhere. Most of that debt was a one time deal to create a nationwide greenfield network.
Yes, but don't forget that "Ambani family have close ties to the ruling government"
and also Jio is "the only firm that won a pan-India 4G license, leveraging the superiority and cost-efficiency of 4G".
I'm super curious what technical reasons mandate that there can be only one 4G license in a country with 1.4 billion people. And how that affects competition in a country that has Corruption Perception Index equal to that of Morocco, Ghana, China or Benin.
You seem to be insinuating that Jio is the only telecom that was given special all-India spectrum. And that is false. All the spectrum was offloaded in public auctions were everyone participated and bought spectrum.
Jio is not the only telecom in India with 4g spectrum or services. I personally use Airtel, and I get 4g everywhere I go without issues.
>I'm super curious what technical reasons mandate that there can be only one 4G license in a country with 1.4 billion people.
The confusion you have seems to stem from the fact that Jio advertises itself as India's only full 4g network. What that means is that the greenfield network build by Jio only uses and supports 4g networks and not the older 2g and 3g networks. So in other words, the Jio network is 4g exclusive for it's customers.
The older telecom are older and still operate old 2g and 3g networks so they cannot market themselves that way
TLDR version : Corruption can only get you so far but to become world class you need to be very good at what you do.
Longer version :
Reliance/Ambani family have ties to pretty much the entire political spectrum in India and not just the current govt. This is one of the reasons why they have thrived since 70s when the group was started by Mukesh Ambani's (current CMD) father Dhirubhai. But this is not the only reason they have thrived, they started with polyester and captured the entire upstream upto crude refining. The Jamnagar refinery project was started in the 90s and was setup under the supervision of Mukesh. It is the largest refining complex in the world with some of the best refining margins in the world. Aramco almost bought a 20% stake in it recently, a deal which got suspended because of Covid.
As far as the pan India 4G license goes, it came at a time when others were still topping up their 2G and 3G licenses which were selling at a much higher premium due to the competition. It wasn't as if it was not on offer to others, it just did not make business sense for them at the time. And the license was auctioned around 2009-2010 while the current government only came to power in 2014. The conversion of pan India broadband license to 4G also happened before 2014. Heck, I remember seeing the Jio backbone OFC cables being laid in multiple cities before 2014. Corruption at the highest level (multiple cases involving multiple ministries, even reaching the Prime Minister) was one of the main reasons the previous UPA govt was routed in 2014.
>>> by acquiring the only firm that won a pan-India 4G license.
IIRC, that farm was simply a proxy with some back channel deals. Parent Company didn’t want their names in auction, that would have made the auction much more expensive. So they acquired the spectrum trough a front-face farm and later acquired it.
AFAIK the original purchase was much cheaper because the spectrum was assigned for IPTV, not telephony. The government later 'regularized' it, that being a euphemism for being bribed enough to change the allowed use of the spectrum.
Seems it works for them just fine. Amazon had a similar strategies while being a lot smaller at the time. You need multiple revenue streams to really push for market dominance.
Because the largest market for growth these entities have outside of China, is India. The middle classes want the goodies, and these players want the income.
And more importantly choke-hold over the government bureaucracy. They can essentially bulldoze government over any rules and regulations, and bribe around freely. This is how Reliance got big.
if you do your due diligence companies like Reliance (Dhirubhai Ambani) are the reason most honest smart Indians are fleeing the country
From things like bribing the government at city and state levels, to 'disappearing competitors' to going after competitors with the sole purpose of killing them off
Of course, now with what is happening with TikTok you could argue US is fast becoming the same
you can just buy Government influence instead of having to compete
Honestly the reason people flee is due to the lack of opportunities as a result of the existing bureaucracy. You are conflating the cause of the inefficiency and one of the ways of getting around it. Reliance and Dhirubhai just showed how to navigate around it. The bureaucracy is a relic of the colonial past and it belongs in a museum.
And I write this as an honest, maybe smart Indian sitting outside India.
Here comes the copy pasted argument without any fact or figures to support it that appears in every thread regarding Jio/Reliance/Ambani/India or a combination thereof.
Frankly, it is getting a bit stale and feels a lot like the standard Redditesqe drive-by factless commenting behavior to gain cheap karma and dopamine hits of raging against the system. HN is supposed to be better.
> They can essentially bulldoze government over any rules and regulations, and bribe around freely.
Um no. Can you show any, any incidences of them breaking the law or bribing anything other than "I know deep down in my heart of hearts that they do"?
And regarding bulldozing regulations or skirting them, isn't that how every corporation works. Hell, that is essentially how every SV company, big or startup works. And so does any other company in any other country. Nothing unique or special going on here that should be pointed out in every thread.
> This is how Reliance got big.
This is not how Reliance got big. They got big by work and bringing products to the market. The founder made his first IPO by quite literally hawking his shares alongside his products to retail customers. And Jio is not something that is mandatorily being shoved down people's throats. People willingly use it and pay for it.
The discussion and accusations are about his corporate practices. This does not affect or influence or impact his corporate practices or help with government control.
And anyways a lot of people can take care of such issues in every country. Not all of them are capitalists or businessmen. So I doubt this scenario ties in anyway with suspect business practices.
People ignore the fact that even with outsized influence, Reliance will be subject to market and other economic conditions that could result in a negative return on their investments. Mukesh Ambani's brother is almost bankrupt, and not for lack of trying to avoid that.
Mukesh Ambani is taking on seemingly unpalatable risks because he has nothing better to do with his money. He has a large amount of shareholder support and a huge base of users he can market Jio's products to. These users and the overall market will ultimately decide whether they want to use these products or not.
His Family consist of Board of Directors. It's ridiculous how SEBI could allow a public company to operate like family business. Board of Directors are supposed to represent minority shareholders, not the majority.
That may have been in the past. However ever since Modi Government came to power, industrials access to government has reduced drastically. Initial days of Modi, there used to be some fish trap to warn the officials.
Any proofs, incidents, facts, figures to support your accusations?
> The regulatory capture of TRAI by JIO is very well known
It is very well known in the same vein as "Bush did 9/11", "George Soros is the boss of Illumnati", "Zuckerberg is a lizard human", "Freemasons rule the world", "Area 51 has aliens", etc. Essentially baseless urban myths.
"Industrial access to govt has reduced drastically"? Sorry, are you being sarcastic here?
You read about how much Adani/Ambani are getting from this govt?
Also the newly proposed rules for Environmental Impact?
(https://www.thehindu.com/sci-tech/energy-and-environment/wha...)
There are two things Modi is known for:
1. 2002 massacre of Muslims in Gujarat
2. Being friends with crony capitalists.
This is not an exaggeration. You can read about what he did in his state when he was the chief minister.
> There are two things Modi is known for: 1. 2002 massacre of Muslims in Gujarat 2. Being friends with crony capitalists.
> This is not an exaggeration. You can read about what he did in his state when he was the chief minister.
> So Salman Khan also didn't kill any poor in 2002? Some ghosts were driving his car that night?
What has this got to do with Modi? This is the biggest problem with you liberals. You can't debate on facts. The moment you are presented with facts you either shoot and scoot or indulge in diversions. Shows what shaky grounds you stand on!
As far as Salman Khan is concerned I believe he was driving and killed poor in 2002. Now this is my belief. It hasn't been proved in any Court and I am not fighting a case against him nor I have the urge. It is for the victims to take it to the logical conclusion and they are doing it. He was exonerated of charges in a High Court. It can always be appealed in the Supreme Court. I don't have any particular hatred for him, like you do for Modi, to pursue that case. I base my belief in circumstances surrounding the incident. I might be wrong too. That is why it is my "belief" and not a "fact".
But I will never turn my belief into a fact and try to assert to others that my belief is a fact. That if you don't agree with me you are an "asshole" and a "Salman Bhakt". Do you realize how stupid and ridiculous it sounds? You are trying to pass on your beliefs about Modi as facts and then getting riled up because someone called you out! It is borderline juvenile behavior. If this troubles you so much why don't you go to some Court and prove your allegations? Do some hard work for once?
> Can't believe there are ahole Modi bhakts here on HN.
You can call me an asshole as much as you want but you are just exposing your own self. You haven't proved anything against Modi. In any Court of Law. Neither when Congress was in power nor now. This is all you people are good at: calling sane people "bhakts" and "assholes". But when it comes to actually walking the talk you guys hide in some closet!
Try your sarcasm with someone else. Won't work on me. When you have some facts to back your allegations that has been established in some Court of Law then you can come back to me. Until then keep trying.
Jio got big since it offered services better then competition. Unless govt mandates everyone to use Jio they would have to stay competitive to be on top.
They are corrupt but most corrupt? Please read up on the Nehru-Gandhi family. I agree that family is shady but calling it the most corrupt is a hyperbole.
The publicly known net worth is just notional number not just in India but any country. Im pretty sure the princes and kings or Saudi, or Putin could be more worth than Bezos or Gates.
That way corruption is very hard to measure in India. There was one story like an year back in the state of Telangana where a sub-inspector was caught, the raid revealed he was worth around 300 crore rupees. That is what he was unable to hide. What he was able to hide would be way more. He was also stupid flaunting around his wealth. Your tax commissioners, property registration DCs, other government front line approval staff, or police are just worth more than your ordinary industrialist these days. The ones below them, the lower level government bribe potential jobs easily beat the net worths of may be even top execs in your Software firms.
This is illegal bribe. Legal bribes run even more deep. I knew of a person whose dad was in IAS, that man would get a plots(for negligible prices) from politicians every time BDA launched a layout in Bangalore. This is legal stuff. Their family is likely worth in upwards of a few hundred crores.
Another sorry sight in any Indian city is traffic police standing around in corners making bribes, when they pull out bundles from their pockets to dispense change. Even a back of visual evaluation and a worse case back of envelop calculation you will see those men would have a few lacs in their pockets.
All the best catching them, because most of these people have associations, and they meet bi-weekly in hotels and work with their legal teams to safeguard themselves.
That way its hilarious to even try to evaluate net worth of politicians or big industrialists. Try checking the quantity of land banks real estate developers in a city like Bangalore own. Their game is set for decades.
For those like me who don’t know what’s a crore, it’s 10m; a crore rupees ~US$134k.
Also looked up bribing traffic police as it sounds
somewhat incredible. Found this: https://economictimes.indiatimes.com/news/politics-and-natio... According to that article, 82% of respondents (among truck drivers and fleet owners) alleged to have paid bribes in their last trip, at an estimated average of Rs 1257 (US$17) per trip (I assume people who’re annoyed about bribes are more likely to respond, so the reality should be somewhat better than 82% which is kind of crazy...).
I mean paying bribes does not make you corrupt. The person accepting the bribe is corrupt. So the most corrupt family in India is most probably the Gandhi family. The Ambanis may be the family to have paid most of the bribes.
When JIO was launched, till it became the behemoth it is today, there were a series of some 20 regulatory changes in Telecom in India, all benefiting Jio at the right time, hurting their competition.
When everyone is investing in Jio, I think its that absurdity everyone is investing in.
Lots of rumors that Facebook's investment was mostly to spur the government to ban TikTok.
I'd also wager that Facebook has been lobbying the US government to ban TikTok. This is the first big threat they've had that they haven't been able to buy or crush
>Historically, the oil refinery and petrochemical businesses were the most profitable wings of the Reliance conglomerate, but now that “data is the new oil,” Jio is the company’s crown jewel.
I wonder how the work culture inside Jio is. Reliance (Petro-refinery side) is one of the "core companies" for Chemical Engineers but after a summer internship, students didn't seem interested in pursuing employment there unless there was no option left. These companies used to be derogatorily referred to as 'Lala companies' based on the heredity CEOship. (Lalas typically are merchant class of India, who pass on their SMBs to their sons)
From the stories I hear from my friends - it's a spectrum. Depends on the department and role you are working in. More technical roles are less Lala but non-technical roles can out-Lala other Lala companies.
I can’t understand why tech’s biggest players are obsessed with it. I mean, I know what they may be thinking and why they’re salivating. But I believe they’re just behaving as if they don’t want to be left behind and seen as losers, whereas the truth (IMO, and take this with a big pinch of salt) is that this looks like the seemingly limitless amount of money pumped in by Uber or SoftBank in the hopes of “capturing the market and making boatloads of money”, only to realize later that the underlying proposition and the model were defective, which they will never admit.
Reliance has a lot of political backing (and Jio is what it is today because of concessions), but again strictly IMO, I think all these tech companies “investing” in Jio will be left holding the bag in a few years.
I am no expert in any sense but the comparison to 'limitless amount of money pumped in by Uber or SoftBank in the hopes of “capturing the market and making boatloads of money”' here is incorrect.
JIO already has a good amount of paying, repeating customers and they have the infrastructure setup and working already for 1B+ people (not subscribers).
So yeah, the tech companies might lose it but not like Uber / Wework did (IMO). Also, another important point to note is that Reliance, regardlesss of the political party, will have the backing.
Uber also had a huge number of paying customers! The problem is that they could not be paying enough to make ends meet.
If Jio is profitable, or would be profitable if it did not invest all the profits (like Amazon used to do), it's another story. But if the unit economy isn't working, then yes, it'b be an Uber, a unicorn which is too heavy for its own hooves.
They're also heavily indebted and that profit is propped up by some rather questionable accounting shenanigans, so take that number with a pinch of garam masala. Still, the unit economics in mobile telecoms are very different from an Uber: setting up a network from scratch is extremely expensive, but the net cost of adding an additional subscriber is nearly zero and the revenue from each additional user goes pretty much directly to the bottom line. (Again compare Uber, where they probably lose money on many rides due to driver subsidies, predatory pricing, algorithms not accounting for traffic etc.)
"Uber also had a huge number of paying customers" but we knew that they(UBER) were burning cash despite that.
That is not the story with JIO, also JIO is also owned by RIL which has other businesses and would NOT need approvals / investments / bureaucracy to move cash from there to JIO, if need be.
Is Jio still using and building on KaiOS, their fork of FirefoxOS, the javascript-based mobile OS? I'd love to read the story behind that and where it's going next. Are their contributions open source?
Might be wrong but KaiOs is a different entity that partners with Jio.
KaiOs tech works with multiple other telecom providers
https://www.kaiostech.com/
TL;DR (not necessarily from the article, but from various sources):
- Jio is basically a monopoly
- It prints an absurd amount of money
- It's only "tech" because it can essentially control the smartphone market in India (INSANELY HUGE GROWTH)
- Ambani is the most powerful man in India, but also was over-leveraged on his oil business and needs capital for growth. He wants more global control/influence and US tech companies want more control over India. It's a win-win for both.
- $100B in 5 years is probably a lowball figure
In other words, imagine Google, AT&T, and WeChat all controlled by one company in one of the largest potential GDPs in the world.
True, Jio is a Monopoly and getting very powerful in India through its cash power. This is very dangerous for small companies and startups as Jio have a wider reach of people and small companies cannot establish in a market already occupied by Jio. Hence they are easily defeated.
Does the fact that Google and Microsoft have Indian CEOs, Sundar / Satya respectively, give them an advantage when dealing with the Indian market? Especially when considering the fact this pronounced interest in Jio is largely just as a way to enter into negotiations with the owners of the Indian market/government.
Based on my limited experience (2.5 years based in Singapore (2010-2012) as tech evangelist for Amazon Web Services for APAC, ~25 business trips to India, dealing mostly with businesses but sometimes with government), understanding the culture helps, but I don't think at that level it's going to make a huge difference, compared to what's actually on the table.
Counterpoint (I'm not Indian): there are people on either side of that table. Being born and raised in the culture and economic conditions, referencing shared experiences, probably helps communication, a lot.
Both grew up in India before migrating to US so understand India very well
In reality
Sundar Pichai - no
Satya Nadella - yes. This guy is a @#$#$ genius. And Indians have a lot of respect for smart people who deliver results
So, Indian Goverment is not owned by Reliance
However, all things being equal Indian Government would prefer an Indian company like Reliance owns the keys to the kingdom, rather than some imperialist cunt like Bezos or Zuckerberg
So now these imperialist companies have no choice but to team up with Reliance
Bezos' plans in India are screwed, though, by the way
WalMart/Flipkart was good competition and still #1
However, JioMart is basically as vicious and happy to do illegal things as Bezos and he has all the connections in India
So India can be written off completely for Amazon retail
Bezos' only choice now is to partner with Ambani as a small stakeholder
Not going to downvote, but Reliance is equally "imperialist" in terms of where and how it can express market dominance.
Imperialism is a function of nation-states, not corporations.
Most nations have "national champion" corporations that work with the nation's government to promote/influence other nations. US/Boeing, EU/Airbus, France/Bull, etc.
So calling Bezos/Zuckerberg "imperialist" while Pichai/Nadella are somehow not is ridiculous. These are CEOs of corporations. All corporations are "imperialist" in that they are attempting to gain "market" against their competitors and they will co-opt their associated nation-state to help that.
Recently ordered a few items on it. A toothpaste, some Almonds.
It came in a paper bag, wet from rain, soggy and a mess.
However there are two things that are massively in favor of JioMart.
Reliance already has about 11,000 stores in over 6700 cities. These are called "Reliance Fresh" and are quite popular. JioMart is using these stores to send orders to and deliver them.
The costs for capital and expenses for these stores are already done and most of them are profitable.
All JioMart is doing is to consolidate the stock information, take orders and push orders to appropriate stores.
It's only strange to me given that what I consider an even stronger swear is used two paragraphs down from that. I'm not sure if that's due to cultural differences though (I'm American, but I don't know where GP is from).
I was just curious and asked a genuine question but instead got the HackerNews downvote. Maybe it is because of my username people think I am trolling?
> Does the fact that Google and Microsoft have Indian CEOs, Sundar / Satya respectively, give them an advantage when dealing with the Indian market?
If the way this dynamic works in India is as I was told, like in Eastern Europe, then no.
A lot of stay at home high class people often have scorn for "whiz kids" returning from abroad, bringing with them their baggage, or plainly they envy them.
They see men who made to the top in a much more level playing field as somebody much superior to themselves, and they don't like it.
That very article: "Sundar Pichai, the CEO of Google, and Satya Nadella, the CEO of Microsoft, are both Indian immigrants who come from the higher Brahmin caste"
Mukesh Ambani, the founder and chairman of Jio, is not a Brahmin. So the idea that caste differences could play a part in dealings of this sort is a fair topic.
Jio going to build their own 5G equipment for installing in India and expansion to other country. Their vision is, Data is the new Oil. They are coming for USofA too.
In the last two weeks, there were multiple articles on Jio and whenever I comment something, Google analytics says I have new visitor to my website this hackernews.
I don't know how, this medium article I was able to read and other useful articles asks me join their membership.
End of day,
1. BSNL has higher reach in rural areas after then it was idea. Airtel & Jio are city based mostly that's where the speed is.
2. JioMart is a provision store, DMart is a provision store. If JioMart buys DMart then you can say ok he is here to stay. But buy FutureRetail which already sells only few specific brands not all. So what's the point.
3. Jio University, It's graded eminence but yet to be built. No comments.
May be ban of tiktok could be due to investment. Everybody in the country had Tiktok installed and happily watching all the 15-30sec videos, nobody was using fb. After the ban, in youtube now they are promoting some 15sec, it's not so interesting as tiktok. JioMeet was a ripoff of zoom. Just before a month, JioMeet was introduced GoI said zoom can be compromised, it's not banned because large corporations are already using it.
All this money and attention will surely pump up the R stock/s like crazy. Not sure if these investors are also receiving any preferntial liquidation preference too. Is it not likely that they might dump stock to book huge profit and the retail Indian investors will be left holding the bag ?
Jio’s parent company reliance is a textbook crony capitalism model.
Since it’s inception they have been able to get unfair advantage by having or buying insiders from the government also they hire ex-bureaucrats for their network and no the moves in the government before it becomes public.
On top of it Indian government was holding back retail market access from international competition till they get to ramp up (which they have done for donkey years).
So if you need access to Indian market, you have cost up with Reliance and that’s why you see big players lining up.
If you manage to find it watch On YouTube their annual conference of a sort (similar to US Tech Companies), you will see all of this on display.
If you really think Jio's reach into the government is comparable to TurboTax you may not be appreciating that TurboTax is not owned by the largest industrial group in America & the richest person in America. Try TurboTax being owned by an amalgamation of Amazon and General Electric that is owned by Jeff Bezos.
> Jio was able to achieve these cheap rates by acquiring the only firm that won a pan-India 4G license, leveraging the superiority and cost-efficiency of 4G compared to older cellular standards, and because of the unparalleled size and resources of its parent company. [emphasis mine]
> A sizable portion of the investments will go toward paying off the existing debts accumulated by Reliance to fund this extravagant project and its other businesses,
Reading between the lines in this article, it sounds like Reliance is simply buying market share by running Jio at a big loss, and temporarily making up the difference with huge investment rounds. I feel like we've seen this show a lot lately and it doesn't always work out.