2) Digital Services
Reliance Jio approximately in 4 years (as of now) Reliance Jio topped the chart with the largest portion of the market share (52.3%) followed by Bharti Airtel (23.6%) and Vodafone Idea (VI) (18.7%) in the quarter ended March 2020 in Telecom Sector.
Reliance Jio revolutionized Telecom Industry in India as before the entry of Jio, data was expensive and consumers had to spend up to ₹400 - ₹500 for 1GB of data. Jio launch chargeable plans but the tariff was so low that consumers paid roughly ₹10 per GB of 4G data and later to compete with Jio its competitor companies had to low down their tariff rates.
Jio offers its consumers various services Media and Entertainment, Commerce, Education, Healthcare, and Agriculture through platforms like JioTV, JioTV+, JioMart, JioSaavn, JioNews, etc.
Recently Jio Platforms and Qualcomm had successfully done a test for 5G Solutions. Even Jio is planning to sell 5G smartphones from ₹2,500-₹3,000.
Increasing adoption of broadband services in India has led to a 50% y-o-y growth in wireless data usage across the country over FY 2018-19, that's just a huge growth, isn't it?
India is the second-largest smartphone market in the world after China, with approximately 450 million unique smartphone users.
Over the past two years, JioPhone (marketed by Reliance Retail) has successfully transitioned over 100 million erstwhile feature phone users to the 4G network. The 'JioPhone Diwali' offer introduced in October 2019 has been very successful in accelerating data adoption as subscribers have seen the enormous value in the affordable bundle of the device and digital services.
Jio believes that the availability of digital services at affordable price points would drive the adoption of Internet-based services by all and give the right tools in the hands of young Indian entrepreneurs to drive revolutionary growth.
JIO IS #1 IN 17 OUT OF 22 CIRCLES, CLOSE SECOND IN 3 OTHERS
Jio’s success in building technology, specifically for India, and its ability to proliferate across the country has attracted global technology leaders – Facebook and Microsoft—to forge partnerships with it. Facebook – In April 2020, RIL, Jio Platforms Limited, and Facebook Inc. announced the signing of binding agreements for an investment of `43,574 crores by Facebook into Jio Platforms. This investment by Facebook valued Jio Platforms at `4.6 lakh crore pre-money Enterprise Value. Facebook’s investment translated into a 9.99% equity stake in Jio Platforms on a fully diluted basis.
This partnership is aimed at accelerating India’s all-around development, fulfilling the needs of Indians and the Indian economy. The joint focus will be India’s 60 million micro, small and medium businesses, 120 million farmers, 30 million small merchants, and millions of SMEs in the informal sector, in addition to empowering people seeking various digital services.
Microsoft – In August 2019, Jio and Microsoft Corp. embarked on a unique, comprehensive, long-term strategic relationship aimed at accelerating the digital transformation of the Indian economy and society. This 10-year commitment combines the world-class capabilities of both companies to offer a detailed set of solutions comprising connectivity, computing, storage solutions, and other technology services and applications essential for Indian businesses. It will span the broad Reliance Industries ecosystem including its existing and new businesses.
The aim of the partnership is to enhance the adoption of leading technologies such as data analytics, AI, cognitive services, Blockchain, IoT, and edge computing among SMEs to make them ready to compete and grow, while helping accelerate technology-led GDP growth in India and driving adoption of next-gen technology solutions at scale.
UNDERSEA CABLE FOR DIGITAL CONNECTIVITY Jio has been actively creating a multi-terabit capacity international fiber network. Jio, with its partners, is a part of two undersea cable network consortiums:
• BBG (Bay of Bengal Gateway), a state-of-the-art 8,100 km undersea cable system providing direct connectivity to South East Asia and the Middle East, then onward to Europe, Africa, and the Far East. This strategically important undersea cable facility has a landing facility in Chennai.
• AAE-1 (Asia Africa Europe) stretches over 25,000 km from Marseille, France to Hong Kong. This is the longest 100 Gbps undersea cable system with 21 landing stations across Europe and Asia. In India, it has a landing station in Mumbai.
Digital services reported another year of strong revenue and EBITDA growth driven by continued momentum in wireless subscriber addition. Customer engagement on the Jio network also remained healthy across data and voice services, with video accounting for 70% of data usage. Net subscriber addition of 81 million in FY 2019-20 was well ahead of the industry peers. Revenue of 68,462 crores for FY 2019-20 on a year-ending subscriber base of 387.5 million and EBIT margin of 21% underlines the best-in-class execution capability of the digital services team.
Jio's Revenue was ₹48,660cr. in FY 2018-19 which in FY 2019-20 increased to ₹68,462cr. which is a 40.7 % growth in revenue.
Jio's EBIT(Earnings Before Interest and Tax) was ₹8,784cr. in FY 2018-19 which in FY 2019-20 increased to ₹14,363cr. which is a 63.5 % growth in EBIT.
Jio's Margin between EBIT and Revenue was 18.1% in FY 2018-19 which in FY 2019-20 increased to 21.0% which shows that Jio works with a good margin and is trying to increase its margin.
Jio continues to transform the Indian telecom industry with key performance indicators as follows:
• ARPU of `130.6 per month during the quarter ended March 2020
• Average data consumption of 11.3 GB per user per month during the quarter ended March 2020
• Average voice consumption at 771 VoLTE minutes per user per month during the quarter ended March 2020
• Total wireless data consumption of 1,284crore GBs (12.8 Exabytes) during the quarter ended March 2020 (one of the world’s largest mobile data networks)
• High user engagement with ~5 hours spent by each subscriber per day on the Jio ecosystem
Over the next few years, Jio would focus on creating a robust wireline network across the country, offering high-speed connectivity and a bouquet of digital services to every home and enterprise. Jio is geared up to touch the lives of over a billion Indians through its wireless as well as wireline offerings.
Read More:
Reliance Industries Ltd. - Company Analysis (Part-1)
Reliance Industries Ltd. - Company Analysis (Part-2)
Reliance Industries Ltd. - Company Analysis (Part-3)
Reliance Industries Ltd. - Company Analysis (Part-4)
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