 |
| Reliance Jio- Businessresearch4you |
Reliance Jio
Reliance Jio Infocomm Limited (or) JIO is today a well-known company in the whole world. Jio is a subsidiary company of RIL(Reliance industries limited) and owned by chairman Mukesh Dhirubhai Ambani. RIL is having 150+ subsidiary companies is the parent company of Reliance Jio.
 |
| Jio Digital life source: medium.com |
 |
| Reliance Jio Infocomm source: justdial.com |
Reliance JIO is started as Infotel broadband on Feb 2007, then On 22 Jan 2013 company changed its name to Reliance JIO Infocomm. As we all know the competition in telecom sectors is drastically increased since JIO came into the market. Which has greatly affected other telecom companies such as Airtel, Vodafone, and Idea Market share of Jio has been increasing every day. Just After three years of its official launch, Reliance Jio has become the biggest telecom operator in India in terms of subscribers, as well as in terms of revenue market share.
As per the TRAI(Telecom Regulatory Authority of
India), Reliance Jio has become the largest telecom
operator in India after it added 5.6 million mobile subscribers in November
2019 with its total subscribers of 369.93 million and market share of 32.04 %
in the telecom sector.
Jio has headquarters in Mumbai- Maharashtra, India. Jio operates
LTE(Long Term Evolution) network with coverage across all 22 telecom circles. It does not
offer 2G or 3G service, and instead, it uses only voice over LTE to provide
voice service on its 4G network.
Jio is present in 28 states in all over India and with a
direct physical presence in more than 18,000 urban and rural towns and over 2
lakhs villages. They are committed to providing Jio services in nearly all the
cities, towns, and villages of India covering over 95% of the population and
that’s why many investors want to be part of Jio’s success story.
Jio now has 376 million subscribers means active users by January 2020. Over the previous year, the number of new additions to its network total of 136 million by January 2020. As per TRAI(Telecom Regulatory Authority of India), the highest no of subscribers of Jio is from Delhi.
Jio become an integral part of people’s lives
No one can imagine before 2016 that, we would have
1.5/2 GB data per day with 4G speed because of Till 2016, everyone used to use
their data very carefully and in an economize way. Jio became a part of a day to
day life not only in the urban area but in rular are too which we can see from
the graph of internet users in India.
The second graph also shows that most of the population
using their data or we can say Jio services from their mobile itself rather
than any other equipment which is generally not available in a rural area.
 |
| Mobile- a preferred device source: Reliance annual report |
 |
| Internet users in India source: Reliance annual report |
Jio has brought a transformative shift in the Indian telecom
culture with the commencement of its competitive and good services in
September 2016. Jio has redefined the Indian telecom sector by offering a compelling value proposition for data while eliminating voice and national
roaming charges. Jio is committed to India's global leadership in the digital
economy. From starting of Jio it became a type of addiction for the people but
a good addiction which has been useful in many sectors like education,
corporate, e-transactions or every digital occurrence and even for future
changes like 5G, Jio is ready wit hits technology. so that, we can say Jio is a boon for the people of India.
Index:
Index:
- Reliance’s decision about the commencement of Jio.
- How they started? What was their strategy in making this infrastructure?
- After infrastructure how they have expanded their customer base?
- Different Products of Jio Platform Ltd.
- How Jio is continuously adding different Segments?
- Restructuring of Jio
- Effect of every decision made by Management of Jio and its effect on profitability and achieving it. ( Quarter by Quarter Analysis)
Reliance’s decision about the commencement of Jio.
Reliance Jio is a subsidiary company of digital services arm of reliance industries. As you may know about history, here is what is the vision behind JIO? and how Reliance made a decision towards the commencement of JIO?
With the world’s second-largest population of 1.2 billion, India was a young nation with 63% of its population under the age of 35 years till 2015. India had a fast-growing digital audience with 800 million mobile connections and over 200 million internet users in 2016. RIL believed that India has capabilities and potential to lead the world in innovation and creativity, these thoughts lead RIL to the creation of a digital revolution in India.
Market Environment- Requirements in the market
Digitization along with data consumption till 2016,
was not usual because of inadequate investment in infrastructure, lack of a credible competitive environment with simultaneous steep affordable pricing. Jio’s
entry not only unlocked existent required demand, but also consumption patterns
leading to an exponential increase in per capita data consumption which we can
see from the graph given here.
We can also see the correctness and vision behind the decision of Jio from some of the studies. Common conclusions of these studies
are outlined below:
· Global trends have already suggested a rapid decline
in voice revenues after smartphone penetration in the Indian market.
· Traditional voice systems and facilities increasingly
getting replaced by VoIP and IM.
· Investments have been increasing for improved data
network infrastructure.
· Global shifting to pack offering with the unlimited
voice to counter shift in voice traffic.
· Networks are transforming rapidly to support the rapid
adoption of new technology and streaming of video traffic.
· Many Industries were witnessing the rapid shift from
legacy technologies (2G / 3G) to 4G LTE.
· Major Contribution of voice to overall revenue has
been a decline but overall industry revenue will increase with higher
consumption of data and digital services in the future.
All these points
listed can be correlated with the following graph.
 |
| internet users & jio penetration source: kleinerperkins.com |
The three main factors on which reliance has focused were Broadband networks with good accessibility, affordable smartphones which common people can buy, and availability of rich content and applications for day to day life and entertainment.
These three points made a revolution in telecommunication sectors
by offering a unique combination of telecom, high-speed data, digital commerce,
media and payment services which are adaptable by each and every folk without
concern about which category he/she belongs to.
 |
| 100million subscriber of jio source: ibgnews.com |
History of Jio is started when Reliance
industries bought a 95% stake in Infotel Broadband Services Limited (IBSL) for
₹4,800 crores (US$670 million). IBSL was the only company that won broadband
spectrum in all 22 circles in India in the 4G auction. Afterward RIL's telecom
subsidiary, Infotel Broadband Services Limited was renamed as Reliance Jio
Infocomm Limited (RJIL) in January 2013.
Later, in July 2015, a PIL
filed in the Supreme Court by an NGO called the Centre for Public Interest Litigation, by Prashant Bhushan, challenged
the grant of a pan-India license to Jio by the Government of India, however
lastly as a result the PIL was revoked, and the accusations were dismissed.
The 4G services were launched
internally on 27 Dec 2015 and The company commercially launched its 4G services
on 5 September 2016. Jio crossed 50 million subscriber mark just 83 days since
its launch and subsequently crossed 100 million subscribers on 22 February 2017
and still expanding its services all over India.
For
more history visit: Official website and Jio Wikipedia history
How they started? What was their strategy in
making this infrastructure?
For coming directly into the 4G market and for giving free services in the whole country for about 6 months, also ensuring about quality of services, requires proper planning and good strategies but Mukesh Ambani was not an ordinary businessman.
Before Jio all other telecom sectors
like Vodafone, the idea was focusing on only voice calls and most of 60-70%
of their revenue came from voice calls. One of the Strategy aspects of Mukesh
Ambani was he mainly focuses on Data especially rather than voice calls and he
invested 2.5 lakh crore in Jio because he knew that voice call has a saturated
market.
For giving all these services the
main thing requires was a unique, innovative, and expensive technological
infrastructure. investments along with the technology innovations of Jio have
created a data strong network that delivers unmatched quantity and quality of
data. For that, The reliance has been buying spectrum since 2010. For building
such a large Jio empire RIL has been focusing on innovation and R&D since
2010.
Technological infrastructure and eco-system
On the path of technological
advancement, Jio has built LTE using both Time Division Duplex (LTE TDD) and
Frequency Division Duplex (LTE-FDD) technology for its wireless broadband
services. Jio has been getting benefits from these advances in LTE technology.
The network of Jio is specifically
designed to carry multimedia content, thereby enabling a rich and
unstoppable customer experience. Deployment of LTE, FTTH, and Wi-Fi have made
high-speed broadband access widely available to customers. Jio expanded its
current LTE network coverage and also deployed Fiber-to-the-home (FTTH)
technology for wire-line broadband and Carrier-Wi-Fi technologies for broadband
via public hotspots.
In addition to LTE, Jio evaluated and
deployed other technologies, both wireless and wireline and with that Jio
offered comprehensive broadband solutions to consumers, enterprises, small
businesses, government, and other entities.
Innovation led deployment in spectrum and network
Innovation has been one of the key
aspects of Jio. The Jio network has advanced features such as Software Defined
Networking (SDN) and Network Functions Virtualisation (NFV). It is also ready
for the future evolution of technology including the transition to 5G with
minimal additional capital expenditure in the network with upcoming
technological advancement. Jio has filed 68 patents for the path-breaking
initiatives.
From the following graph, we can see how Mukesh Ambani
simultaneously focused and emphasis on the R&D.
 |
| R & D expenditure - Businessresearch4you source: Reliance annual report 2019 |
Jio has over 1,00,000 radiating
sites, which is significantly more than what any other operator had and already
positions. Fiber has been the critical factor in which a telecom service provider can provide
high-end services to consumers. In addition to fiber backhaul that provides the intermediate network between core network, extensive
last-mile fiber connectivity used to address the fiber to the
home potential.
Singapore subsidiary of Reliance Jio
is also a key association partner in a multi-terabit capacity international
network, a new state-of-the-art 8,100 km cable system, the Bay of Bengal
Gateway (BBG). BBG provides direct connectivity to South East Asia and the
The Middle East, then onward to Europe, Africa, and Far East Asia through seamless
interconnection with existing cable systems. Strategically this is a very important
undersea cable landing facility in Chennai is owned by the RJIL, provides a
high-speed, high capacity, low latency route connecting India to the rest of
the world. So This is how it is a crucial part of the jio network.
Concerning sales and
distribution, Jio has about half a million activation outlets and close to a
million recharge outlets at the time of launch.
License and spectrum holding
RJIL participated in spectrum
auction and acquired 269.2 MHz of spectrum across different bands for 13,672
crores in 2016-17. The total spectrum of Jio at 1,108 MHz (uplink + downlink)
across three spectrum bands namely 800 MHz, 1800 MHz and 2300 MHz band across
each of the 22 circles with an effective average life of over 16 years which shows the long term vision behind the Jio.
RJIL has also entered into an
agreement with Reliance Communication Limited (RCOM) for sharing of spectrum in
the 800 MHz bands across 21 circles and this is also considered as the strategically important.
In addition to the existing pan in India, 2300 MHz spectrum and 1800 MHz in 14 circles Jio invested over Rs 10,000
crore during this year's auction to acquire 800 MHz spectrum in 10 circles and
1800 MHz spectrum in 6 circles. This brought the cumulative investment in
spectrum assets to nearly Rs 34,000 crores. These investments show the strong base behind this fast 4G technology.
Basic requirement based Strategies
Mukesh Ambani knew the requirements, sentiments, and perceptional behavior of the people. According to that basic strategy behind the Jio are given below.
COVERAGE Jio is working towards expanding its reach to over 95% of population coverage by the end of 2019 and then after 99% of the population.
COVERAGE Jio is working towards expanding its reach to over 95% of population coverage by the end of 2019 and then after 99% of the population.
QUALITY Investment in superior Long Term Evolution(LTE)
technology-based network and next-generation technologies helped them to
provide quality.
AFFORDABILITY Developed its network at an efficient cost base
enabling services at affordable prices and passing the benefits to the Indian
consumers.
Valuable Partnerships
Value chain presence: To deliver end-to-end solutions and
satisfactory experience, Jio continues to partner and collaborate with
technology developers, service providers, infrastructure providers, application
partners, and device manufacturers.
Infrastructure service providers: Jio has done master service agreements with
leading telecom infrastructure companies such as Reliance Infratel Ltd, Indus
Towers Ltd, Viom Networks Ltd, ATC India Tower Corporation Pvt Ltd, GTL
Infrastructure Ltd, Ascend Telecom Infrastructure Pvt Ltd, Tower Vision India
Pvt Ltd, RailTel Corporation of India Ltd, BSNL and MTNL to have access to the
passive infrastructure set-up by these companies. Jio also had agreements with
RCOM to share fiber and economize on the overall use of
fiber and other passive infrastructure that is for the acquisition of specified
assets of Reliance Communications Limited and its affiliates.
Devices Jio has been actively working for developing the
ecosystem for India’s LTE phones, working with renowned Original Equipment
Manufacturers (OEMs), Original Design Manufacturers (ODMs) and chipset vendors
on end-to-end device design and engineering. It was sure that all the
smartphones would be expected to be VOLTE enabled after the launch of LYF
brand devices.
After infrastructure how
they have expanded their customer base?
Jio had ready with all its technology and
services now next an important focus was on the penetration in the market means
to attract the customer or expand the customer base.
After infrastructure how
they have expanded their customer base?
Jio broke many records on multiple parameters,
not only in India but even on the global stage. Reliance Jio announced the
commencement of services with ‘Jio Welcome Offer’ in September
2016. In a short period of 170 days, Jio crossed 100 million customers on its
all IP wireless broadband network, which is a big milestone for any
technological company.
At the time of commencement of the services to expand the customer base, Jio decided to give free services means Jio came with the free voice calls for Jio customers across India and hence they distributed free 4G Jio sim cards all over the country free of cost. For that Jio has already made more than 2.5 lakh kilometers of fiber-optic cables, covering 18,000 cities and over 1 lakh villages and It has an initial end-to-end capacity to serve more than 100 million wireless broadband and 20 million Fibre-to-Home customers.
One of the strengths of the Jio was its Distribution system. Jio had set up an extensive distribution network of over 7,600 Jio Stores (through Reliance Retail) and over 1 million retail touchpoints to serve its expanding customer base as a result of that we can see the increasing trend on the internet and mobile penetration in the market.
 |
| Rural Internet penetration source: Reliance annual report |
Jio became the first company that has given
free services like data, voice calls, roaming etc. for 6 months.
The factors in the overall strategy for the commencement of services are given below.
• No roaming charge Truly Free voice-Local,
STD, Roaming
• Only pay for one service (highest
demand)-data
• lowest data rates in the world
Within 6 months of the launch of Jio, India
became the highest mobile data user globally with monthly consumption of over 1
billion GB in 2017. This level of growth has been unpredictable on any mobile
network anywhere in the world.
Many people called this a Growth hacking strategy. which consist of
Acquisition, activation, retention(happy new year plan) and referral
strategy(customer join other customers) because Jio has disrupted the Indian
telecom sector with its ‘Welcome’ and ‘Happy New Year’ offers that
include a free voice for the lifetime and unlimited data till March 31, 2017.
In February 2017, Jio announced industry redefining tariff plans as commencement part of the world’s largest migration from free to paid services. Jio has introduced simplified tariff structure plans with less than 20 plans as against the 22,000+ tariff plans exiting in the country today. The plans are designed to fit every budget because Mukesh Ambani focused on customer behavior and perceptional analysis and the result of which we can see from the following data.
 |
| India's mobile data traffic due to jio source: Reliance annual report |
Jio announced the 'Jio Prime Membership' for its initial customers and within a month of announcing the Jio Prime offer, over 72 million Jio customers signed up for Jio Prime, and that becomes the of the most successful customer-oriented program in the world.
As a way of gratitude, the first 100mn+ Jio subscribers were offered a special ‘Jio Prime Membership’ program which came with several special benefits. Jio Prime members would be able to enjoy unlimited benefits of Jio services till 31st March 2018 for a nominal and one-time enrolment fee of just 99 Rs coupled with the most competitive monthly tariff plan. In addition to this, there were many programs by which Jio customers benefited using that customer got exposure to many other applications.
In reality, Jio came with lots of
digitalization and digital services including myJio, JioTv, JioCinema,
JioExpressNews, JioCloud, JioMags, JioChat, JioNet, JioSequirites,
Jio4GVoice, JioMoney, etc.
Jio announced the 'Jio Prime Membership' for its initial customers and within a month of announcing the Jio Prime offer, over 72 million Jio customers signed up for Jio Prime, and that becomes the of the most successful customer-oriented program in the world.
As a way of gratitude, the first 100mn+ Jio subscribers were offered a special ‘Jio Prime Membership’ program which came with several special benefits. Jio Prime members would be able to enjoy unlimited benefits of Jio services till 31st March 2018 for a nominal and one-time enrolment fee of just 99 Rs coupled with the most competitive monthly tariff plan. In addition to this, there were many programs by which Jio customers benefited using that customer got exposure to many other applications.
In reality, Jio came with lots of
digitalization and digital services including myJio, JioTv, JioCinema,
JioExpressNews, JioCloud, JioMags, JioChat, JioNet, JioSequirites,
Jio4GVoice, JioMoney, etc.
 |
| Jio products source: Reliance annual report |
 |
| Number of Jio subscribers Source: Reliance annual report |
Day by day Jio has been increased value offers for the customers by providing personal coupons and vouchers and all that stuff. Also, Jio provided a unique option to buy any tariff plan offered by other telecom operators with 20% more data than that. Many people call this strategy as a loss-leading strategy or market penetration strategy. So as an impact of that you can see how drastically the number of subscribers increased from the graph.
 |
| India No-1 data consumption in the world Source: Reliance annual report |
Today, data consumption on the Jio network is higher than the total mobile data consumption in the US and twice that in China. It is the first Exabyte network in the world because as a good businessman he knew from the broader perspective that people want quality data rather than only voice service.
Jio has become the largest network globally in
terms of data usage and a result India become the leading country in the world
for mobile data usage, with more than 100 Cr GB of data traffic per month and
200 Cr voice and video minutes a day.
Jio has a current 376 million subscribers as of
January 2020 which accounts for 33.36% market share. RIL has invested nearly Rs
4 lakh crore since 2010 in Jio till April 2020.
Impact of Jio on various sectors
Jio impacted heavily on most of all the aspects
which are in terms of an increase in customers, increased internet users,
industry usage, voice volume usage, per capita expenditure, and other telecoms companies.
You can see from the following figure that how the industry started the rapid usage of 4G data. As a part of digitalization and to compete with other world’s technology many industries started usage of these 4G data on a bigger scale.
 |
| Industry data usage Source: Reliance annual report |
Not
only industrial users but Individual means per customer basis, data usage rose
significantly from 500 MB per month in 2016 to 10.6 GB in the last 2019
you see that from the graph below.
As
per the data collected from the Telecom Regulatory Authority of India’s
quarterly performance indicator reports, the share of customers using 3G and 4G
services rose to 52% of the total subscriber base from nearly 14% before that.
 |
| Data subscribers in India Source: TRAI release |
Total voice traffic rose 110% to 2.4 trillion
minutes which shows the talkative nature of Indians that you can also see from
the quarterly rose in total voice volume and voice usage per customer from the graph given below.
 |
| Total Voice volume and voice usage per customer Source: TRAI release |
Per capital expenditure has been a major
role in the success of Jio. Jio designed such tariff plans which were fitted
into the customer’s budget and Jio gave better & more service than any
other telecom company. this resulted in a decrease in average revenue per user.
As the impact of Jio tariff plans the average revenue per user has fallen
41% to Rs74 per month in the past three years, as per the Trai data.
 |
| The average revenue per user source: TRAI release |
Different Products of Jio Platform Ltd.
Refer our article where we have covered each product of Reliance Jio:
How Jio is continuously
adding different Segments?
Management of Jio has made the effort for developing different segment which
will lead the future growth of Jio which is 4G LTE(Long Term Evolution)
Network, Jiophone, FTTH(fiber-to-the-home), Enterprise solution, and Digital
tech. Here are the possible opportunity shown in the figure.
 |
| Growth Engine of Reliance Jio Source: Reliance Annual Report |
Now, We will discuss how they have developed this segment from the launch of Jio 4G LTE to the recent strategic investment of Facebook and the introduction of different minority investors.
Jio Network and JioPhone:
With the transition of 72 million users to the Jio prime membership program,
Jio continuously increasing its network capacity by buying new spectrum
licenses of different bandwidth and making partnerships with the different
infrastructure service providers to get access to the passive infrastructure
set-up by these companies. Also, increasing coverage of the jio network to
India's population from 95% at the end of 2017 to almost 100%.
To increase consumer base they have targeted feature phone market by transiting 2G handset users to 4G LTE of Jio via JioPhone series and At the end of Q2 2019-20, they were sold 70 Million devices with a market share of 28%. Jio has a total user base of 388 million at the end of Q4(quarter4) 2019-20.
To increase consumer base they have targeted feature phone market by transiting 2G handset users to 4G LTE of Jio via JioPhone series and At the end of Q2 2019-20, they were sold 70 Million devices with a market share of 28%. Jio has a total user base of 388 million at the end of Q4(quarter4) 2019-20.
FTTH Segment:
Before the commercial launch of FTTH Jio has started a beta program in 2017 in
around 10 cities including Delhi, Mumbai, and Some cities of Gujarat. Under
this trial service, Jio is providing a Special Router at a refundable deposit
of Rs 4500 which connects Multiple devices and also offering TV Sevices.
Originally plan is to bundle IPTV(Internet Protocol Television) services with
FTTH. Before the launch, they have also started migrating 5 lakh customers who
are using the free services of Jio to paid services.
Before launch, India has only 19 million households which are 6.3%
penetration with fixed broadband connections which include less than 2%
fiber-connected households. Jio has set out a target of 50 million customers in
the first phase with an overall target of 100 million homes in the coming
years.
Strategic investment in Den And Hathway:
Reliance through its network of subsidiaries has acquired a 66% stake in DEN
NETWORK for 2290 crore Rs and 51.3% stake for 2940 cr Rs in Hathway Cable and
Datacom LTD. as of Q2 2019. As part of this deal, reliance has also got a
minority stake in GTPL Hathway. After completing the second investment
Reliance and affiliates now hold a 72% stake in Hathway for a total investment
amount of 4120 crore Rs and 78.1 % equity stake in Den Networks at the end of
Q4 2019.
This deal gives Reliance Jio direct access to around 6.5 million broadband
households which is around 36% of total fixed broadband users of 18 million. In
addition to that RJio will also get access to 12.5 million cable TV subscribers
which is around 7% of the total TV households.
Jio will be strengthening the 27000 LCOs (Local Cable Operator)aligned with DEN
and Highway to provide Jio Home Solutions to millions of Homes. We strongly believe
that this deal will help RJio’s target to reach 50 million households over the
next three to four years though it’s FTTH(fiber-to-the-home).
This deal will provide a win-win relationship for all
Stakeholders:
 |
| The benefit of Den and Hathway Strategic Investment Source: Reliance Investor Presentation |
Enterprise Solution:
During Reliance Annual General Meeting(AGM) of 2019 Mukesh Ambani
announced a new partnership between Reliance Jio and Microsoft. Outcomes of the
announcement are as follow:
 |
| Details of Transformative Microsoft Azure Reliance Jio Partnership Source: Reliance Annual Presentation |
Enterprise Opportunity:
Jio is uniquely positioned to capture the
expanding ICT(Information and Communications
Technology), Market.
Here is the Opportunity available:
 |
| Sector for Enterprise Solution Source: Reliance Investor Presentation |
1. Low ICT spend for enterprises in India compared to global
peers and underpenetrated SMB( small and medium-sized business) market in India.
2. Telecom operators capture an even smaller percentage of
the ICT spend in India.
Jio’s unique value proposition:
Bundled and
vertical based solutions to tap latent demand especially in the SMB market in
India.
·
Distinctive
digital solutions through partnerships like Microsoft Azure.
·
Converged fixed
and mobile services on the platform unparalleled
network reach in India
Digital Tech:
As part of Jio strategy to make Digital Society in India, Jio has
made many partnerships, Acquisition, and Restructuring in Reliance Jio. Here,
We have shown the major Deals. Under this jio want to develop its Jio
Advertisement Platform Like other Major Digital company.
The partnership announced in FY2018-19:
RIL had recently announced a five-year content syndication
the deal between its video streaming and live TV platform JioTV and Star India,
which enabled Jio users to watch live sports via Hotstar easily.
Reliance Jio has collaborated with the largest lender SBI in
August to provide a next-generation experience with an exclusive
digital-banking partnership by integrating SBI YONO
with MyJio.
Jio has announced a partnership with Disney to offer content from
Disney, Pixar, Marvel, Lucas Film on JioCinema App. JioCinema will provide a
dedicated Disney branded section on the homepage with content spanning across
movies, animation, and short series.
Different Strategic Investment In Startups:(Click on the Table)
Wiki
Sankhya sutra labs: https://entrackr.com/2019/03/ril-stake-reverie-easygov-sankhya-sutra/
Jio estoniaou: https://www.livemint.com/Companies/39syF2sZymyjCLerdGMKyM/Reliance-Jio-plans-overseas-expansion-eyes-Estonia-unit.html
Restructuring of Jio
Restructuring is the part of RIL Strategy to make one Company that
has an Asset light modal and has all the digital assets of Reliance. Reliance
wants to make Jio a Digital company that is comparable to Alibaba, Google, or
Amazon. And Also, attract new Strategic investors in the Platform to
revolutionize India Digital Society. Here, we have shown different deals under
this.
Demerger of Tower and Fiber Assets:
Reliance Jio Infocomm Limited (RJIL), wholly own subsidiary of RIL has created
two separate SEBI registered Infrastructure Investment Trusts(InvIT)for its
passive infrastructure, tower and optic fiber assets which are known as
Reliance Jio Infratel Privet Ltd. (RJIPL). And
Jio Digital Fibre Ltd. (JDFPL) respectively,
and has entered into the type of arrangement for long-term uninterrupted use of
there assets.
Asset Details:
 |
| Asset Details of Jio Source: Reliance Investor Presentation |
InvIT Structure:
 |
| Shareholding Pattern of InvIT Structure Source: Reliance Investor Presentation |
How this will drive significant deleveraging?
 |
| Balance Sheet Changes due to Demerger Source: Reliance Investor Presentation |
Liability reduction of Jio of
around Rs 107K crore. In addition to that around Rs 78k crore of preference
shares(marketable securities) issued to RIL.
ASSET MONETIZATION:
Currently, RIL is working towards monetizing these
assets and in this process, Brookfield Infrastructure Partners L.P.
and affiliates will invest 25,215 crores into Reliance Jio Infratel Privet
Ltd. (InvIT) and RIL is Negotiating
with the Abu Dhabi Investment Authority (ADIA)-led group which include Sequia
Capital, an infrastructure focussed fund, and the GIC of Singapore. But it is
stalled due to differences in commercial and operating terms. And in parallel
to that GIC of Singapore has also been considering joining Brookfield as a Co-
investor in Jio’s tower InvIT.
Brookfield DEAL:
- Brookfield is a leading global alternative asset manager with over $365 billion in assets under management, 120-year heritage as owners and operators of infrastructure assets and with operations in more than 30 countries In the future, Long-term debt also being raised in RJIPL.
- Proceeds from the investment by Brookfield and long-term debt will be used to repay existing financial liabilities of RJIPL, including loans extended by Reliance.
JIO PLATFORM LTD:
Jio Platforms Limited is an Unlisted Public Company. It was incorporated on 15
November 2019. In October, RIL said it has set up a
wholly-owned subsidiary for its digital initiatives, with a total capital
infusion of ₹1.73-lakh crore.
Under this arrangement, ₹1,08,000 crore of RJio’s liabilities will be transferred to RIL.
Also, it will acquire Reliance’s ₹65,000-cr equity in
RJio.
Jio Platforms Limited is incorporated as an umbrella platform
for all the Reliance-owned digital businesses including Reliance Jio, MyJio,
JioTV, Jio TV+, JioNews, JioCall, JioSaavn, Jio FIber, and many more app. The
newly created subsidiary reportedly will also look after other RIL’s digital
entities such as technology-based initiatives in education, healthcare and
agriculture services.
 |
| Shareholding Structure of Jio Platforms Limited Source: Reliance Investor Presentation |
This move is part of reliance’s strategy to make a truly digital society for each Indian through bringing India’s No 1 connectivity platform, leading digital app ecosystem, and the world’s best tech capabilities under one umbrella. Further, unlock the value for shareholders by bringing strategic investors by divesting to leverage jio’s customer base by making customer-centric products. By reducing the overall debt of RIL and making Jio ready to have adequate capital for the adoption of future 5G technology.
This decision comes as a boon for RIL in the time of the COVID-19 pandemic. Due
to COVID-19 reliance core business comes under pressure due to a fall in crude
oil price. Due to this, their profit has badly effected and Saudi ameraco deal
is slowed. Reliance target of becoming debt-free also effected but at the same
time Jio Plateform Ltd. Continuously supporting financially by increasing their
share in EBIDTA((Earning before interest, tax, depreciation, and amortization)
and also, it is busy bringing strategic investors in the company to achieve the
target of becoming debt-free by March 2021.
Facebook Jio deal is part of
RIL’s efforts. In this Facebook will invest in Jio Plateform to acquire a
9.9% stake in it at the enterprise value of Rs 4.36 lakh CRORE which is
valued around Rs 43,574 Crore.
“Jiomart, which is a market-place platform and built-in
partnership with small merchants and ‘Kirana’ (small neighborhood retail store)
shops, which will allow users to buy goods and services using WhatsApp and Facebook
Messenger. Jio Platforms will focus on introducing digital solutions for 60
million micros, small and medium businesses; 120 million farmers; 30 million
merchants; and millions of SMEs in the informal sector,” Fitch said.
To complete Reliance Jio Facebook Deal It has to be approved by CCI. here see what ET says about that:https://economictimes.indiatimes.com/tech/internet/deal-to-go-to-cci-trai-may-also-step-in/articleshow/75306062.cms?from=mdr
Vijay Shekhar Sharma CEO Paytm one of the competitors of Jio said that this deal may mark a change in consumer behavior, the whole industry will benefit from this. there is a huge amount of capital required to change the behavior of consumers so that they can place orders online.
Read full article: https://www.financialexpress.com/industry/sme/facebook-jio-deal-will-do-one-thing-that-paytm-couldnt-vijay-shekhar-sharma-says-it-is-good-news/1965915/
 |
| Shareholding Pattern Of Jio Platform Ltd After Facebook Deal Source: Reliance Annual Report |
Post Facebook deal RIL has managed to
bring another two investors into Jio platform which is Vista Equity
Partners and Silver Lake Partners. In addition to that Reliance's Jio
Platforms in talks with General Atlantic, other foreign funds like Saudi
Arabia's sovereign wealth fund to invest in it.
Read more: https://yourstory.com/2020/05/reliance-jio-platforms-general-atlantic-foreign-funds-stake-sale
Shareholding of Jio Platform Post 3 deals will be:
Reliance Industries Limited (86.54%)
Facebook, Inc. (9.99%)
Vista Equity Partners (2.32%)
Silver Lake Partners (1.15%)
Effect of every decision made by Management of Jio and its effect on
profitability and achieving it.
(Quarter-by-Quarter Analysis)
Effect of every decision made by Management of Jio and its effect on
profitability and achieving it.
(Quarter-by-Quarter Analysis)
Different projection is given by Reliance jio at time of launch of
Jio is as below:
 |
| Projection Of Indian Internet Market Source: Reliance Annual Report |
As of q2 2017, Jio has achieved data consumption of 10 Gb/user/month which is far ahead of target. To achieve Profitability, Jio knows that they have to first overcome the fixed cost of the businesses because they have created world-class highly scalable infrastructure. We know that in the telecom business initial cost of setting infrastructure, the tower network is high but scaling to more customers is less. For this, there were requirements of a large customer base at the initial level. These are also required for the promotion of their apps which is part of their digital ecosystem.
To achieve
this Jio has provided certain special benefits absolutely free like High-speed
internet Data with FUP(Fair usage policy) at 1GB, Voice and Video, All jio
application and content, up to 31st March 2017. Due to this, it has
achieved more than 50 million users at the end of December quarter of 2016 (
within 82 days from launch) and 108.9 million users at the end of March 2017.
Jio had become the first company to achieve 100 million users in just 170 days.
 |
| JIO DHAN DHANA DHAN Source: Gadget 360 |
Now at the end of Second-quarter,
30-June 2017 it has gained 123.4 million users out of this more than 100
million were paid customers and most users on 309 or higher plan.
The Strategy Behind the Launch of JioPhone:
India had over nearly 450 million internet subscribers before the launch of JioPhone. The overall penetration in India is still 34%. There was also a great divide in urban and rural internet penetration which is around 76% and 15% respectively. So with a total population of nearly 906 million, approximately 750 Million users still do not use the internet. These low internet penetration and comparatively less competition in rural areas provide a huge opportunity for the next phase of growth for the Jio network |
| Internet Users Data Source: Reliance Annual Report |
 |
| Share of Different Devices in Internet Usage Source: Reliance Annual Presentation |
So, Jio wants to develop a revolutionary product that has 4G LTE capability, needs base features, and a highly affordable price. Jio has entered with JioPhone to target this segment. And we all know that Jio becomes successful in his goal. I have seen many people in rural India who are using their JioPhone for watching cricket matches or many entertainment shows through JioTv.
 |
| Launce of JioPhone Source: Reliance Investor Presentation |
 |
| Financial Parameter Q2 2017-18 Source: Reliance Investor Presentation |
Now, the moment arrives when Jio has posted positive EBITDA(Earning before interest,
tax, depreciation, and amortization) and EBIT(Earning before interest and Tax)
in the very first Quarter. This happened due to a scale of 139 million
customers at the end of Q2 2017-18 and efficiency measure. Jio has reported an
ARPU of 156 Rs. But we can see that net profit is still negative this was due
to the high cost of finance.
(Quarter)Q3 2017-18:
 |
| Financial and Key Parameter Q3 2017-18 Source: Reliance Investor Presentation |
Here, the first-ever net profit was reported in next quarter
Q3,2017-18. Major reasons were continuous addition of new users which was 160.1
million with the net addition of 21.5 million and Strong improvement in
operating margins due to business efficiencies and Scalable business model. We
can see that improvement of margin from 23.5% to 38.2%.
Here From both tables, we can say that there is a 2% drop in ARPU
but there is a 16% increase in subscriber Base which results in around 12 %
increase in Operating Revenue.
There was an achievement for Jio in this Quarter that it has sold
6 million JioPhone in flash sale in a matter of hours –on its 1 st
offline-online flash sale.
Company has started for looking towards the suite of digital
services being rolled out and expanded :
- FTTH and Enterprise
- Jio Advertisement platform
- Content and Media Services
FY 2018 Q4:
Continuing the momentum of last Quarter, Jio has added a net 26.5
Million users and taking the whole count to the 186.6 million users as of
31-mar-2018.it is the only operator demonstrating business growth, with
increasing subscriber base and growing traction of Digital Life.
Also providing the best network quality in the country (lowest call
drop at 0.14%; fastest download speed at 17.9 Mbps; 100% network availability
since the commencement of operations).
Financial and key parameter:
 |
| Financial and Key Parameter Q4 2017-18 Source: Reliance Investor Presentation |
From the above table, we can see that operating revenue and EBITDA is almost flattened despite the increase in the subscriber base by 17% Q-o-Q basis and this happened because of the drop in ARPU by 11% Q-o-Q basis and a slight drop in EBITDA margin by 0.4% Q-o-Q basis. Due to these reasons, net profit also becomes almost constant. Diversification of the subscriber base is the main reason for low ARPU. Now, Jio requires some new measures to accelerate profit which we will see further.
Here we can say that at the end of the year the company has started
posting positive PAT(Profit after Tax) and with a growing consumer base and
healthy EBITDA margin Jio is in a good position for future opportunities. In
addition to that their different apps like MYJio, Jio Cinema, Jio TV, JioSaavn,
Jiomags, Jio News, Jiomoney Embibe are gaining traction in the market. They
will help Jio in building their digital society.
 |
| Growth Trajectory of Subscriber Source: Reliance Investor Presentation |
Q1 2018-19:
- Jio has India’s largest and fastest-growing wireless data subscriber base of(215.3 million as of 30-Jun-18; gross adds of 30.5 million during the quarter; net adds of 28.7 million at a growth rate of 8% over the previous the quarter with the lowest monthly churn rate(https://www.investopedia.com/terms/c/churnrate.asp) 0.30%)
- Making fixed-line fiber broadband available to 1,100 cities in the country
- Jio is playing a Transformative role in creating the Digital Ecosystem in the country (launch of Zero Touch Postpaid plans; popular apps on JioPhone; IPL Play Along with Game; the launch of Jio Interact)
- Here are some Industry-leading Metrics:
 |
| Industry Leading Metrics Source: Reliance Investor Presentation |
Financial and key parameter:
 |
| Financial and Key Parameter Q1 2018-19 Source: Reliance Investor Presentation |
In
this Quarter Jio has managed to bring good EBITDA growth of 16.8% and 20% Q-o-Q
growth in net PAT because of the following reason:
• expansion in EBITDA margin by 102 bps on a Q-o-Q basis
• Almost stable and highest ARPU in the industry at ₹ 134.5 per month due to
(launch of postpaid offer, upgrade for higher data allowance and special data
packs key positive drivers)
• 16 % Q-o-Q growth in subscriber base.
Now see, here is the service launch by JioPostpaid:
 |
| JioPostpaid Plan Source: Reliance Investor presentation |
Q2 2018-19:
 |
| Industry Leading Metrics of Jio source: Reliance Investor Presentation |
Financial and key parameter:
 |
| Financial Parameter Q2 2018-19 Source: Reliance Investor Presentation |
Strong
growth in subscriber base with the addition of 37 million customers led by the
following reasons:
• Improving Coverage
• Best in class Network Performance
• Monsoon Hungama offer
• Strengthening sales channel
EBITDA
and net profit Q-o-Q growth in parallel with growth in revenue and slightly
less growth in revenue as compared to growth in subscriber base due to a drop in
monthly ARPU which is 131 Rs. As compare to the ARPU of Airtel and
Vodafone-Idea's, in the July-September quarter, dropped to a record low of Rs
100 and Rs 88. Other
than this, phenomenal growth is reported by Jio in Q-o-Q and Y-o-Y bases in every
parameter.
Key highlight:
 |
| Scaling of Jio Source: Reliance Investor Presentation |
Jio is Transforming the Global Voice Industry with improved
experience with the lowest call drop rate and improving this by every quarter.
Currently having more than 40% share of global VoLTE(Voice over Long Term
Evolution) subscribers.
 |
| Apps in JioPhone Source; Reliance Investor Presentation |
New
addition in building the digital ecosystem and transforming the ‘Digital Life’:
1) Jio is Strengthening the KaiOS app-store with popular social media apps like
WhatsApp and Youtube.
2) Expanding Content Library with focused following investment:
• Interactive best-in-class Sports
• Digital rights for Movies
• KBC & Jio Cricket Play-Along
• Jio-Disney partnership
• Monsoon Hungama
• Voice BOT with MyJio – most queries now answered by Hello Jio
RIL today announced a strategic investment in and partnership with Den Networks
Limited (“Den”) and Hathway Cable and Datacom Limited (“Hathway”) to boost the
FTTH (Fiber-to-the-Home) program. here is more detail:
 |
| Details Of Den and Hathway deal Source: Reliance Investor Presentation |
Q3 2018-19:
Financial and key parameter:
Here we can see that
Jio is continuously reporting good results on Q-o-Q basis and Y-o-Y basis.
Following key highlight :
•
280.1 million subscribers Gross adds of 32.7 million with net adds of
27.9 million.
•
Industry-leading EBITDA margins with ARPU of ₹ 130
 |
| Financial and Key Parameter Q3 2018-19 Source: Reliance Investor Presentation |
Key Highlight:
All IP Network with largest fiber-optic backhaul Lowest call drop rate & improving every quarter Data network rapidly scaling up with steady performance metrics Carrier aggregation & Small Cells for better coverage and capacity.
 | |
Average Data Speed and Volume
|
Jio is the Primary SIM as reflected in per capita voice and data usage. Also, a Higher share of Smartphone users and JioPhone users are leading growth in market share and Industry Leading ARPU translating in higher market share in AGR (Adjusted Gross Revenue) RMS(Revenue Market Share)%
 |
| Market Share Of Jio Source: Reliance Investor Presentation |
Home IoT
Solution from Jio:
 |
| Detail of Jio IoT Solution Source: Reliance Investor Presentation |
Q4 2018-19:
• Customer engagement metrics continue to increase with 10.9GB/ user/ month and
823 minutes of VOLTE voice/ user/ month.
•
Strong Financial Performance with Operating revenue for FY 18-19 at Rs 38,838
crores and Industry-leading EBITDA margin of 38.9%.
•
Transfer of Fiber & Tower Undertakings to InvIT completed as of 31st March
2019. The liability of Jio reduces by ~ Rs 107K crore. In addition to that ~
Rs 78K crore of preference shares (marketable securities) issued to RIL.
Financial and key parameter:
 |
| Financial and Key Parameter Q4 2018-19 Source: Reliance Investor Presentation |
Here,
Q-o-Q (Quarter on Quarter)growth in the subscriber base is continuous but
growth in net subscriber addition is flattening which resulted in less revenue
and EBITDA growth on a Q-o-Q basis as compared to the previous quarter so there
is a need to more generate more revenue stream other than this wireless
broadband business.
Reported
ARPU impacted by a lower number of days during this quarter, and subscriber mix.
INSIGHTS:
From
3rd and 4th quarter on of the reason for the growth of subscribers is due to
the migration of subscribers from the airtel and Vodafone idea ltd. Because of
the minimum recharge rule brought by them for those customers who have two sim
cards and only use one card for their regular use. Due to this sim card, the ARPU of
both companies was very low.
To
know the effect of this on VIL(Vodafone Idea Ltd) and AIRTEL subscriber base: click here
This
is also contributing toward the continuous drop in ARPU in past Quarters
because of some customers are migrating only for continuing their incoming
services that are not contributing to revenues.
Key highlights:
Subscriber
The base of Jio crosses 300 million – fastest operator globally to reach this
milestone with an average monthly net addition of 10 million subscribers per
month in FY 18-19.
RIL
and its affiliates now hold 72.0% equity stake in Hathway Cable & Datacom
Ltd. and 78.1% equity stake in Den Networks.
AGR RMS of Jio is approaching ~40% in this quarter
largely due to the Jio network carrying ~71% of 4G data traffic in India during
FY18(Financial Year 18). Also, Continuous subscriber traction with industry-leading
ARPU and Market share gains across circles with an attractive suite of the
offering. Here is the statistic of market share gain in all circle:
 |
| Position of Jio in 22 Circle Source: Reliance Investor Presentation |
 |
| Jio Download Speed Data Source: Reliance Investor Presentation |
From
the above statistic we can say that download speed of Jio is consistently
beating all pears and industry averages this is one of the main reasons that
most of the new customers are starting their journey with Jio. Because other
platforms don't have that good infrastructure that Jio has.
Digital
ecosystem:
Jio
is focusing on different industries like, Education, Healthcare, Agriculture,
Media & Entertainment, and new commerce for the development of the digital
ecosystem. Their product placement and focus are the following:
 |
| The focus of Jio In Different Segment Source: Reliance Investor Presentation |
Jio is continuously Acquiring different platforms for developing
the Digital Ecosystem. Here are many startups that are recently acquired by RIL.
 |
| Different Startup Acquired By Reliance Source: Reliance Investor Presentation |
Demerger of
Fiber and Tower Assets:
RIL
has Transferred its fiber and tower assets into two separate companies
(SPV), Majority equity share capital of the SPVs(Special Purpose Vehicle)
transferred to separate SEBI registered Infrastructure Investment which comes
effectively from 31-march 2019. This deal is part to create an asset-light
model for Jio which is focused on digital services. The strategy behind this:
• Create an asset-light model for RJIL
• Substantial deleveraging and right-sizing of balance sheet
• Monetization of infrastructure assets
• Value creation through external tenancies
• Focused management teams
For
more info: click
Q1 2019-20:
• Robust performance in the last 8 sequential quarters of revenue and EBITDA
growth.
• The subscriber base of 331.3 Mn with gross addition more than 11 Mn/month in 1Q
FY20 and in trailing 12 months
• Increasing customer engagement in the following area: – 11.4GB/ user/ month, 821
minutes of VOLTE voice/ user/ month
• RJIL has adopted Ind AS 116 ‘Leases’ effective April 1, 2019, and applied the
Standard to its leases with a minimum impact of the adoption of Ind AS 116 on
reported profits.
Financial and key parameter:
 |
| Financial Parameter Q1 2019-20 Source: Reliance Investor Presentation |
It is Strong subscriber growth with gross additions at 33.8 million and net additions at 24.5 million here a large difference in both numbers are due to continuously increasing CHURN which is at 0.97% although the lowest in the industry.
Double-digit data volume growth on such a network that is already one of the world’s largest.
 |
| Key Parameter Q1 2019-20 Source: Reliance Investor Presentation |
Here, we can see that the addition of total subscriber growth and ARPU growth on Q-o-Q basis is almost the same with growth in Operating revenue which is continuously slowing on a Q-o-Q basis. So need arrives to increase the ARPU of the Company to increase future demand.
Monthly ARPU:
It
is impacted by subscriber mix, shift to long-term value packs and higher
digital recharges (cashback).
EBITDA MARGIN:
Robust
EBITDA margins with operating leverage and Ind AS 116 off-setting the impact of
higher rentals on demerged passive infra assets. Jio is estimating that FTTH
and Enterprise businesses will drive margin upside over the medium term.
Key Highlight:
Ranking of Jio based on Adjusted Gross Revenue(AGR):
 |
| Position of Jio in 22 Circle Source: Reliance Investor Presentation |
 |
| Data Volume Growth On Jio Network Source: Reliance Investor Presentation |
Significant capacity has been already created on the network to
continue on a growth path which is reflected in the traffic market share and
the higher addition of data traffic on quarter after quarter, Subscriber and
revenue market share lagging which indicates a long runway for growth.
 |
| Market Share of JIO in Different Metrics Source: Reliance Investor Presentation |
Fiber and Tower undertakings were transferred to Jio Digital Fibre Private Limited (“JDFPL”) and Reliance Jio Infratel Private Limited (“RJIPL”) respectively, which effective from 31-Mar-2019.
RIL has entered Agreement into with Brookfield Infrastructure
Partners L.P. and its affiliates for an investment of Rs 25,215 crore into
Tower InvIT
Q2 2019-20:
- Healthy subscriber addition with gross adds at 31.6 million and net addition at 24 million.
- Churn at 0.74% compared to last year remains the lowest in the industry.
 |
| Key Parameter Q2 2019-20 Source: Reliance Investor Presentation |
- Jio is now second-largest single-country operator globally, with 355.2 million subscribers (+41% YoY) with Monthly gross addition of > 10 million in 2Q FY20.
- Strong customer engagement and volume growth
- 12.0 bn GB data traffic, +56% YoY; voice traffic +52% YoY
- Per capita data usage of 11.7 GB/user/month.
 |
| Financial Parameter Q2 2019-20 Source: Reliance Investor Presentation |
• Quarterly EBITDA crosses ₹ 5,000 crores, up 45% YoY. Also, Operating leverage playing out with EBITDA margins at 41.8% (+315bps YoY)
•FTTH services launched during the quarter
Financial and key parameter:
Here, we can see that revenue growth is healthy led by a subscriber
additions but very on Q-o-Q basis because of the lower ARPU.
ARPU is mostly impacted by subscriber mix and shift to long-term
value packs, in line with recent trends.
EBITDA growth has been good due to 169bps expansion in EBITDA
margin margins despite continued network expansion and shifting of infra assets
outside.
Now, Jio is On track for a target of 50% EBITDA margin in
the coming quarter. Here, FTTH and Enterprise businesses will be key growth and
margin tailwinds over the next few quarters.
Key highlight:
Investment cycle of Jio is now complete with mobility coverage
nearing 99% of the population.
The advantage of Jio is the following:
#1 VoLTE Player globally :
 |
| The dominance of Jio in VoLTE Market Source: Reliance Investor Presentation |
The investment cycle is completed:
 |
| The benefit of completing the Investment Cycle Source: Reliance Investor Presentation |
Network Capacity and coverage of Jio:
 |
| Comparison of LTE Coverage of Jio with Peers Source: Reliance Investor Presentation |
Digital Ecosystem and Platform:
 |
| Different Segment of Jio Source: Reliance Investor Presentation |
To Accelerate 2G to 4G Transition, Jio has launched “ JioPhone Diwali Offer” by providing cheap 4G LTE enables every low-income segment of society. Know more:
FTTH
service launched during this Quarter with the best bundle offering in the
industry. Know more:
The transformative partnership between the Microsoft Azure platform and Jio.
Know more:
RECOVERY OF TERMINATION CHARGES:
Due
to regulatory uncertainty around IUC(interconnect
user charges) charge compels recovery of termination charge of
6paise/ min.
The
the reason behind that there is traffic asymmetry (cited as the only factor for
revisiting IUC charges), is purely driven by tariff differential for voice
services and a huge number of missed calls on the Jio network.
So,
For all recharges done by Jio customers effective from 10th October, calls made
to other mobile operators to be charged at the prevailing IUC( interconnect
user charges ) rate
through top-up vouchers. To compensate
this charges additional data entitlement of equivalent value ensures no
increase in tariff for customers. This will be applicable only till the time
TRAI abolishes IUC, in line with the present regulation.
UPDATE ON
InvIT:
Transaction
for the subscription of units of Tower InvIT by Brookfield Infrastructure Partners
L.P. and affiliates in the final stages and to be completed in a short time.
Brookfield Infrastructure Partners L.P. and affiliates to subscribe to units
worth Rs 25,215 crore to be issued by the Tower InvIT.
Q3 2019-20:
• Jio continues to be the Operator of Choice with a subscriber base of 370
million as of Dec-19 with Gross addition of 37.1 Mn in 3Q FY20.
• Jio becomes a net recipient of access charges within two months of
implementation of IUC tariffs which result in significant improvement in the
traffic mix.
• Reported ARPU of ₹ 128.4 (including IUC revenues) which is expected to improve
in line with the recharge cycle.
• Jio Platforms Limited, a wholly-owned subsidiary of RIL to house all digital
platforms and the underlying connectivity businesses are formed.
FINANCIAL and KEY Parameter:
 |
| Financial and Key Parameter Q3 2019-20 Source: Reliance Investor Presentation |
- Despite a gross addition of 37.1 million subscribers- highest in five quarters, the net addition only stands at 14.8 million subscribers due to the elimination of excessively heavy voice users.
- Revenue growth is healthy due to growth in subscriber additions and growth in monthly ARPU due to IUC revenue.
- EBITDA improves further with operational efficiencies and improvements in traffic mix Also, first-time quarterly net profit crosses Rs1000 crore due to almost stagnant finance cost on a Q-o-Q basis.
Key Highlight:
Jio Becomes Net
Recipient of Access Charges:
 |
| Traffic mix of Jio in Q2 Vs Q3 Source: Reliance Investor Presentation |
During the quarter, Jio introduced IUC tariff in response to
regulatory developments On expected lines, the traffic mix improved
significantly which is shown.
In Association with that, It has Eliminated around 22
million subscribers during the quarter – primarily excessively heavy voice
users.
SOME INSIGHTS:
Here is how jio has increased ARPU by using IUC in his favor.
Jio’s VoWiFi – Seamless Migration
From LTE to Wi-Fi: More than 5 million Unique users within 7 days.
 |
| Details of Jio VoWiFi Service Source: Reliance Investment Presentation |
JioFiber offering for Connected Homes with many features like
high-speed internet, free HD voice, Tv plus, tv video calling, and many more.
Know more:
Jio Platforms Limited, a wholly-owned subsidiary of RIL to house
all digital platforms and the underlying connectivity businesses are formed.
know more:
A large number of opportunities available in the Enterprise
segment. Know more:
Q4 2019-20:
- Jio is now the Digital Lifeline of 388 million Indians with Net addition of 17.5 million wireless subscribers during the quarter churn retrace to 0.57% in 4QFY20
- Customer engagement up significantly during lockdown with a strong network performance
- Average per capita monthly data and voice usage at 11.3GB and 771 mins and data traffic increase > 50% post lockdown.
- Robust financial performance with strong double-digit revenue and EBITDA growth with Standalone revenues of ₹ 14,835 crore up 27% YoY; EBITDA up 43% YoY to Rs 6,201 crores and ARPU at Rs 130.6, the further impact of Dec-19 tariff hike to flowing through in the coming months.
- Jio Platforms Limited signs strategic partnership with Facebook and Facebook will invest Rs 43,574 crores for a 9.99% equity stake.
FINANCIAL and KEY Parameter:
 |
| Financial and Key Parameter Q4 2019-20 Source: Reliance Investor Presentation |
- Net subscriber addition at 17.5 million Churn retraces stabilizes to 0.57% after a spike in 3QFY20 led by the elimination of 22 million heavy voice users.
- Per capita usage healthy at 11.3 GB and 771 mins per month with a 20-25% increase in wireless data traffic post lockdown.
- Sequential revenue growth led by continued subscriber addition and partial impact of a tariff hike made during the previous quarter. ARPU increased around 2% on a The Q-o-Q basis to 130.6 Rs. Which will increase up to 146 Rs . in FY21 due to the previous tariff hike and removing recharge vouchers.
-
WHY
ARPU is not grown in this Quarter?
- EBITDA improves further with operating leverage, higher ARPU, and improving in traffic mix during Quarter and Quarterly net profit up 178% YoY to Rs 2,331 crore.
- “We expect a jump in Jio’s reported profit as RIL has recently taken over ₹1.0 trillion debt of Jio after approval from NCLT(National Company Law Tribunal) (move to reduce interest cost for Jio) and Jio has moved to a new tax the regime" noted the brokerage firm. This is the reason behind the reduction in interest costs reported by Jio.
Here is financial detail of Jio from the launch of Jio:
 |
| Financial Metrics of JIO in Past Years Source: Reliance Investor Presentation |
Key Highlight:
INITIATIVE IN
HANDLING COVID 19:
Here we have shown, how Jio has managed the increase in demand due to COVID-19?
Here we have shown, how Jio has managed the increase in demand due to COVID-19?
 |
| Capacity Enhancement to handle Extra load Source: Reliance Investor Presentation |
Different Initiative has taken to support the customer by giving more value and for the employ of the company by deploying new digital platforms for work from home.
 |
| New Service offering in handling COVID 19 Source: reliance Investor Presentation |
Innovation:
•
Jio POS-lite knows more:
•
Mobile-based remote Call Centers
•
Launch of JioMeet - video calling app
Jio
Platforms Limited signs strategic partnership with Facebook and Facebook
will invest Rs 43,574 crores for a 9.99% equity stake.
Know
more: click here
FAQs-Frequently asked questions
1. What is the full form of Jio?
JIO-Joint Implementation Opportunities
2. Can I invest in Jio through the stock market? How?
We cannot directly invest in Jio because Jio is not listed on a stock exchange (Till May 2020) but you can invest through Reliance. Jio is a subsidiary of Reliance so, If you invest in reliance then ultimately you become a shareholder of Jio.
There is a second option but it is illegal, In this, you can buy through "Dabba Market" from the employee of Jio who wants to sell their shares.
We cannot directly invest in Jio because Jio is not listed on a stock exchange (Till May 2020) but you can invest through Reliance. Jio is a subsidiary of Reliance so, If you invest in reliance then ultimately you become a shareholder of Jio.
There is a second option but it is illegal, In this, you can buy through "Dabba Market" from the employee of Jio who wants to sell their shares.
3. When will jio launch 5G in India?
Several analyses and researches are predicting that 5G will only come to India by 2021 and before that, it is not possible.
4. How many subsidiaries of Reliance industries are there?
Reliance Industries have more than 150 subsidiaries. Here is the list:
5. Why Jio become the most popular in India?
Jio has such technology and infrastructure to afford Good quality at less prices. Mukesh Ambani is a good Businessman who knew what actually Indian people need. So by planning and Investing more money and also by giving good offers, jio acquired a large customer base in India.
6. Why
Jio can afford cheap prices compared to other companies?
There is a long term vision behind the Jio. Mukesh Ambani invested a Large amount in Jio. Jio has Infrastructure and technology due that it can afford fewer prices for good quality. Also, Jio has been invested more money in R&D which benefited it for the latest technology.
The main aim of Jio is to earn the most money by utilizing a large amount of data that they are getting through a large customer base and to build this customer base in a short period they have provided services by cheap prices.
7. Which are the different products of Jio?
The product range of Jio includes Jiophone, Different Apps ranging from entertainment, Health, payment, etc, also fiber services.
8. Why Jio Plateform Ltd has obtained very high valuation in recent funding round?
Jio has a customer base of 388 million people. So, due to this customer base, they have access to a large amount of Data. Jio has made many partnerships with Facebook and Microsoft through which they will provide all the services in one platform ranging from buying food, grocery, e-commerce, payment in one platform, and will also provide enterprise services which largely underpenetrated in India. So, growth opportunity in India is very large and Jio is well place to capture large market share. Another reason is that Jio is a debt-free company.
The main aim of Jio is to earn the most money by utilizing a large amount of data that they are getting through a large customer base and to build this customer base in a short period they have provided services by cheap prices.
7. Which are the different products of Jio?
The product range of Jio includes Jiophone, Different Apps ranging from entertainment, Health, payment, etc, also fiber services.
To get the details about it click on the link:
8. Why Jio Plateform Ltd has obtained very high valuation in recent funding round?
Jio has a customer base of 388 million people. So, due to this customer base, they have access to a large amount of Data. Jio has made many partnerships with Facebook and Microsoft through which they will provide all the services in one platform ranging from buying food, grocery, e-commerce, payment in one platform, and will also provide enterprise services which largely underpenetrated in India. So, growth opportunity in India is very large and Jio is well place to capture large market share. Another reason is that Jio is a debt-free company.
9. What is ROCE of jio?
According to reports ROCE is around at 5% as of now
10. When the IPO of Jio will come?
We all know that Jio is placing its self as a technology company and the world's most of the technology giants are listed on the NASDAQ. So, To get higher valuation Jio is planning an overseas listing on NASDAQ.
According to reports ROCE is around at 5% as of now
10. When the IPO of Jio will come?
We all know that Jio is placing its self as a technology company and the world's most of the technology giants are listed on the NASDAQ. So, To get higher valuation Jio is planning an overseas listing on NASDAQ.