Archive for March, 2018

Reliance Jio Acquires a Great Share of Data Traffic on its Network

March 28, 2018

Reliance Jio, a subsidiary of Reliance Industries Limited (RIL), has recently boosted its market share by 580 basis points. A single basis point is a one-hundredth part of one percentage point. This share reflects on the fast growth of the Long Term Evolution (LTE) mobile network operator, especially given the low base from where it began its journey, the share of active Reliance Jio subscribers stood at 7.8 percent as of March 2018.

Apart from making, and continually improving, the telecom brand’s hold in the subscriber market share, Reliance Jio is also making its mark with better wallet shares. Although the tariffs for different plans are reducing, the telecom firm has managed to enjoy a substantial share with its customers, which use two or more mobile connections.

Wallet share and revenue factors

By generating high levels of data traffic on its network, the company is doing well on the wallet share count. Indicating Jio’s good performance, JPMorgan India analysts said that incumbents should do much more to be the customer’s data SIM choice. In their note dated 22nd January 2018, the multinational financial services company’s analysts also said that the telecom operator may have established its stronghold well, by being the preferred SIM for a major chunk of its user base.

Additionally, on the revenue side, Jio appears to be doing well. As per an analyst from an Indian institutional brokerage firm, Jio may turn out to be the second largest firm in the telecom sector, with regards to its revenue in the current quarter. This also shows that the active subscriber share is no longer as significant in the telecom environment, as it was in the previous years.

Wireless broadband subscriptions

A few analysts also noted that it made sense to closely observe trends in wireless broadband subscriptions. Looking at such patterns will help operators understand the backdrop of revenue versus subscriber share better. Another area to look out for is broadband customers’ accounts, to achieve greater Average Revenue Per User (ARPU), which is the other segment that all telecom companies want to grow in.

All traffic data indicates that Reliance Jio is heading the industry in this regard as well. During this fiscal year, the company has acquired 59.7 million users so far. In addition to this, the operator’s share in the field of wireless broadband has also been at 46.8 percent in the month of January, which grew from 42.2 percent in the month of March last year.

Some analysts directed attention to the fact that Jio’s new growth in January may be thanks to its feature phone’s sales. This is a budget feature phone designed to support 4G VoLTE, available at a price of INR 1500.

Once the results for the March quarter are out, the market share of various telecom operators will be easier to understand. At the present, Jio continues to grow in terms of data traffic and revenue.

Summary

Reliance Jio has generated a great amount of data traffic on its network, increasing its subscriber market share by 580 basis points.

Reliance Jio Launches JioFi JMR815 4G LTE Hotspot Device

March 21, 2018

Mukesh Ambani led Reliance Jio, the telecom arm of Reliance Industries Limited (RIL) has launched a new 4G Long Term Evolution (LTE) hotspot gadget on Tuesday, 20th March. The newly launched hotspot device, known as ‘JioFi JMR815 4G LTE’, can be purchased at a price of INR 999 and offers a download speed of 150Mbps.

Launch offers associated with JioFi JMR8154G

There are quite a few launch offers which customers can avail of while purchasing the JioFi JMR815 4G LTE hotspot device. This newly launched hotspot gadget is listed on Flipkart, the popular e-commerce retail store. However, this product has not yet been listed on Reliance Jio’s official e-commerce store, which is an indication that the device is available exclusively on Flipkart. While purchasing this device from Flipkart, customers could avail of a flat discount of five percent on purchasing the device through an ‘Axis Bank Buzz’ credit card. This device has a replacement policy of 10 days. There is a one-year warranty for the device and a six-month warranty for accessories.

Speed and manufacturing details

The core highlight of the new JioFi device is that it delivers upload speeds of 50Mbps and download speeds of 150Mbps. With a view to acquiring more customers, Reliance Jio has always committed to being a part of the ‘Make in India’ program. Hence, the telecom service provider continues to follow this practice with this recently launched JioFi device as well. The JioFi JMR815 4G LTE hotspot device has the tag of ‘Designed in India’ displayed on the back, which signifies that the device has been manufactured locally in the country.

Design and user-connectivity details

An interesting point of observation is that the design of this new device looks quite different in comparison with the original JioFi. The original JioFi device is egg-shaped; however, the new device has a circular shape. The new device comprises of physical buttons for power off and on. Moreover, there is a separate key for Wi-Fi Protected Setup (WPS). The device also features notification lights for Wi-Fi signal strength, 4G, and battery. An integral feature related to user connectivity is that the new JioFi device helps connect 32 users at one time, that too to a high-speed data network. This works in such a way that one user can connect to the device through a USB, while all the other users can connect through Wi-Fi. Users can make video calls and HD voice calls through their Jio 4G Voice app available on their smartphones, once they are successfully connected to the JioFi device.

Specifications

JioFi JMR815 features an ALT3800 processor and supports FDD-Band 5, Band 3, and TDD-Band 40. This device comes with a microSD card slot, with the help of which the storage can be extended to 64GB. Another key specification is that this device is backed by a battery of 3000mAh, which offers a backup of up to three and half hours. The device is available only in black and comes with an adapter, battery, manual, warranty card, and Mi-Fi data card.

Summary

Reliance Jio launches JioFi JMR815 4G LTE hotspot device at INR 999 with launch offers on Flipkart. The device offers an upload speed of 50Mbps and download speed of 150Mbps.

Reliance Retail Buys a 16 Percent Stake in US-Based KaiOS Technologies Inc.

March 14, 2018

Reliance Retail, the electronics and consumer goods wing of Mukesh Ambani-led Reliance Industries Limited (RIL), recently acquired a 16 percent stake in KaiOS Technologies Inc. (KTI) for a cash amount of USD 7 million. KaiOS is the US-based software developer of RIL’s famous JioPhone.

RIL’s announcement about the acquisition

RIL had stated in a notice addressed to the Bombay Stock Exchange (BSE) that its electronics and consumer goods company, Reliance Retail (RRL), had purchased 19,04,781 shares of KaiOS Technologies Inc. (KTI). They were purchased at a price of USD 3.675 per share for cash amounting to USD 7 million, which translates to KTI’s equity stake of 16 percent on a totally diluted basis. The company further stated that this investment is to give RRL’s current investments in the business of economical digital devices and the digital initiatives of RIL and its subsidiaries a potential boost.

Way forward

RIL looks at the investment in KTI as a key step for RRL to have superior control over JioPhone’s software. As JioPhone is India’s only 4G VoLTE feature phone, its success is of utmost importance to Reliance Jio Infocomm, RIL’s telecom wing. The flagship telecom brand Jio has already secured more than 160 million customers and has plans to add more users on an instant basis while competing with some of the leading telecom players in the industry.

How the investment benefits KTI

KTI, a US Delaware-registered organization is an early stage company with revenue of USD 2.5 million in 2016 and USD 9.25 million in 2017. After this investment by RRL, the company has a value of USD 44 million.

RRL’s products and association with KTI

RRL operates Reliance Digital, Jio stores, and Reliance Digital Express Mini. It also sells the well-known JioPhone. Apart from electronics, it runs a chain of supermarkets, specialty stores, wholesale cash and carry stores, and neighborhood stores. KaiOS, KTI’s software is created on the back of Firefox OS and is available as an open source. This software is at the center of the JioPhone.

The growth of JioPhone

JioPhone is being effectively sold free of cost. The customers have to make a payment of INR 1,500, which is refundable after a period of three years. However, in order to avail of the refund, customers have to recharge with a minimum amount every month. With JioPhone, customers can stream live content on TV and browse through various Jio applications such as music and cinema. All these features have made JioPhone one of the most preferred mobile devices among non-smartphones. It emerged as the leading feature phone brand in the quarter from October-December 2017 in terms of shipments. As per Counterpoint Research, JioPhone had acquired a market share of 27 percent because of the massive volumes it shipped during the last months of 2017.

Summary

Mukesh Ambani owned Reliance Retail buys a 16 percent stake in US-based KaiOS Technologies Inc. for a cash amount of USD 7 million.

RIL Plans to Spend INR 1.3 Trillion on Reliance Jio, Reliance Retail, and Energy

March 7, 2018

Over the past couple of months, Mukesh Ambani owned Reliance Industries Limited (RIL) has planned to invest a total of INR 1.3 trillion across five different states in India. This amount will be directed towards their non-energy business.

The reason behind the investments

RIL executives declared that this step highlights the company’s seriousness in taking up more opportunities in retail and telecom. An RIL employee said that the consumer-facing sector is significant to the company and the recent investment commitments underline this fact. He also specified how it was a great opportunity for the business.

Starting from January 2018, RIL has committed investments worth INR 60,000 crore in Maharashtra, INR 52,000 crore in Andhra Pradesh, INR 5,000 crore in West Bengal, INR 10,000 crore in Uttar Pradesh, and INR 2,500 crore in Assam. A majority of these investments are going into the telecom segment, Reliance Jio, followed by Reliance Retail and energy.

Investments in the states of West Bengal, Assam, and Uttar Pradesh are directed towards bolstering Reliance Jio’s infrastructure and network in these areas. They will also be aiming to build up the optical fiber network, broaden the company’s retail network, and set up an electronics manufacturing center for smartphones, television sets, and set-top boxes.

What experts have to say

Speaking about RIL’s investments, Piyush Nahar, Somshankar Sinha, and Pratik Chaudhuri of Jefferies India noted that RIL had invested around USD 53 billion in several businesses that were part of industries such as wireless telecom, shale gas business, retail outlets, and real estate in the United States.

A foreign brokerage analyst said that RIL’s investments in the five Indian states were conceptual and may not imply actual capital expenditure. He said that the amount would depend on a more detailed evaluation of the individual projects. However, he maintained that RIL has been finding new avenues to invest, in general. Other analysts also expect that RIL may see substantial cash flow from the upcoming fiscal year to back these investments.

What this means for RIL’s business

Probal Sen, an analyst at IDFC Securities, said that RIL has constantly acquired access to funds at over sovereign ratings for its plans in investing across different sectors. He also believes that this will not change in the near future and forecasted the business to generate estimated cash profits of about INR 2 trillion in the course of Financial Year (FY) 2018-20. He noted that RIL chooses to balance funding with lesser debt costs as compared to equity, which rests at higher costs than debt costs, thanks to its greater credit rating. Adding that RIL’s debt to equity ratio remains at 0.7-0.8, he said that it was a comfortable ratio for a business of its size.

In January this year, Mukesh Ambani led RIL has mentioned that its capex cycle is completed for its energy business, and the benefits would be generated from FY 2019 onwards.

Summary

Reliance Industries Limited (RIL) has declared its intent to invest INR 1.3 trillion in five Indian states. These funds will be directed towards Reliance Jio, Reliance Retail, and energy businesses.