Ajay Bodke, CEO of portfolio management services at Prabhudas Lilladher, stated that the programme to aggressively pursue deleveraging in businesses and emerge as a zero-debt company in the next 18 months will strengthen the consolidated balance sheet leading to strong valuation and re-rating of the stock.

While asset monetisation is one of the approaches for deleveraging its balance sheet, RIL also hopes to benefit from positive operating leverage at its telecom and digital services business, which should lead to higher revenue. Ambani stated that the capex cycle for Jio was complete. “While most of our investments are complete, we have so far fired up just one of the engines of revenue generation for Jio, namely mobile broadband,” the 62-year-old Ambani said. “Now we are ready to kickstart four more engines of connectivity revenue for Jio.” These include Internet of Things (IoT), home broadband, enterprise broadband and broadband for small and medium businesses (SMBs).

It was eagerly anticipated that Ambani would announce the commercial rollout of JioFiber – Jio’s optic fiber-based fixed line broadband service – along with its pricing, and he didn’t disappoint. JioFiber will go live across 1,600 cities beginning on September 5, 2019, exactly three years after Jio commercially launched mobile broadband services in the country with free voice and data at rock-bottom tariffs. Jio will be selling bundled services comprising a Jio 4G mobile connection, a landline phone connection and a digital set-top box (STB), which will offer high definition entertainment content, video conferencing facilities and smart home solutions to subscribers. The JioFiber STB has been designed to accept broadcast signal from existing local cable operators, which means that Jio will partner with the present cable operator ecosystem (to which it has access owing to the acquisition of majority stakes in Hathway, DEN and GTPL), rather than disrupt it.

Ambani realises that the content ecosystem is a key enabler for JioFiber’s success and he is leaving no stone unturned so that JioFiber doesn’t lose eyeballs and share of wallet to any other competitor in the business. JioFiber will consequently come bundled with subscriptions to leading video streaming platforms and the good news for cinephiles is that they will be able to watch latest movies on their TV screens in the comfort of their homes, on the same day they release in the theaters. It doesn’t end there. As an introductory offer, JioFiber subscribers who opt for annual tariff plans will also get an HD or 4K LED TV and a 4K STB free with their connection. JioFiber plans, which will offer internet speeds ranging from 100 mbps to a 1,000 mbps will come at a monthly tariff of between ₹700 to ₹10,000 to suit different budgets and needs. Ambani said.

On the enterprise and business side, Jio will also roll out a network called Narrowband Internet of Things (NBIoT), which will collect data from billions of smart sensors on devices regularly used at residential and commercial establishments and help them speak with each other technologically, as well as analyse such data for a range of applications. Jio aims to connect a billion devices on the NBIoT platform, which will go live on January 1, 2020, and sees this as a ₹20,000-crore revenue opportunity.

For enterprise customers – ranging from startups to SMBs and large businesses – Jio plans to offer a full suite of products that leverage its connectivity capabilities, along with cloud-based applications to help digitally transform companies. At the AGM, RIL announced a tie-up with Microsoft whereby Jio will set up a large network of data centres across India, while Microsoft brings it Azure cloud platform into these centres. Jio’s plans of digital empowering SMBs and startups utilising its own network include offering connectivity and cloud applications to budding startups for free and charging a paltry ₹1,500 to SMBs.

Technologies like blockchain, IoT and artificial intelligence also find place in Jio’s plans for collaborating with Reliance Retail, India’s largest retailer with a turnover of ₹1.30 lakh crore, to power the conglomerate’s so-called New Commerce initiative. “This tech-enabled partnership will link producers, traders, small merchants, consumer brands and consumers,”Ambani said. “By removing inefficiencies and value destruction in today's market ecosystem, New Commerce will transfer significant new value to consumers, producers and merchants.”Ambani is confident that these new growth strategies will lead to long-term value creation for RIL and its shareholders. “On the strength of our existing and new growth engines, I am very confident that we can grow this (EBITDA) by 15% annually over the next five years,”Ambani said. In FY19, RIL reported an EBITDA (earnings before interest, tax, depreciation and amortisation) of ₹92,656 crore, on a turnover of ₹6.22 lakh crore.

“Sceptics used to say that Reliance cannot succeed in consumer businesses, Jio and Reliance Retail have proved them wrong,” Ambani stated. “Our two consumer businesses now collectively contribute nearly 32% to the consolidated EBITDA, up from 2% five years ago. The day is not far when their share would be 50%.”

New Commerce

RIL’s triple play: Consumers, investors, and partners