Moneycontrol
Last Updated : Jul 05, 2018 08:14 PM IST | Source: Moneycontrol.com

RIL 41st AGM: March from refining and petchem to tech, from cyclical to annuity

Reliance Jio Infocomm now has 215 million customers with 25 million of them also using its JioPhone.

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Ushering in what will be Reliance Industries’ golden decade, Chairman and Managing Director Mukesh Ambani Thursday laid out a roadmap that envisions India’s largest private sector company becoming a technology platform company with an annuity business.

The numbers bear out Ambani’s words. In just a year, the contribution of RIL’s consumer-facing businesses of retail and telecom jumped to 13 percent at the earnings before interest, tax, depreciation, and amortisation (EBITDA) level from a mere 2 percent.

Given RIL’s wherewithal and its unmatched ability to play the game of scale, it’s only a matter of time before Ambani’s announcements on fixed line broadband and new commerce platform are added to its list of game-changing executions.

RIL arm Reliance Jio Infocomm now has 215 million customers with 25 million of them also using its JioPhone. All this within 22 months of its launch. What Jio has accomplished in telecom in a small period of existence will be a subject for historians and economists alike to study in years to come.

Technology will be at the core of RIL’s transition, spelt out several times by Ambani in his over-an-hour-long speech at the company’s 41st annual general meeting today. In doing so, the company also looks set to disrupt not just one industry this time but several – retail, direct-to-home, cable TV, fixed line broadband, home accessories and what have you.

Come July 21 and customers would be able to buy a JioPhone for just Rs 501 in exchange for their old feature phone. And August 15 will see at least a couple of launches.

JioPhone2, an affordable high-end smartphone, will be available from the day of India’s independence. But this could just be a precursor to a launch that could revolutionise India’s fixed broadband market where the country ranks 134 in the world.

Jio, from August 15, will start taking booking for its fixed-line broadband services, dubbed JioGigaFiber. The offering, relying on Jio’s vast fiber optic cables spread over thousands of kilometres, will bring to users broadband speeds in excess of 1 Gbps, something unheard of in India.

The company will also launch JioGigaRouter and JioGiga Set Top Box to bring over 600 TV channels to consumers. If calling on WhatsApp is still a matter of surprise for you, wait for Jio to bring TV-to-TV calling. That too will be a reality soon, promised Ambani’s daughter Isha who also addressed the audience.

The company also has plans to launch various smart devices to control the lighting and appliances in your homes.

RIL also aims to combine the best of the technology that it has deployed -- 4G VOLTE – with the sheer physical magnitude of its retail business.

Reliance Retail now has over 7,500 stores across 4,400 cities – 4,000 of those outlets coming up only in the year gone by. Its stores recorded 35-crore footfalls last year. Reliance Trends, India’s largest fashion retailer, sells over 33,000 garments every hour. Reliance Fresh sold over 500,000 tonnes of groceries in 2017-18. Reliance Retail has the largest portfolio of 41 international brands.

Reliance now aims to combine the physical and digital marketplaces under what Ambani called Bharat-India Jodo enterprise – helping 3 crore small merchants and shopkeepers come on its digital platform.

“We shall create this by integrating and synergising the power of Reliance Retail's physical marketplace with the fabulous strengths of Jio's digital infrastructure and services…We see merchants and small shop owners as critical customer interaction and fulfilment points, who will share a mutually beneficial win-win relationship with us,” Ambani said.

RIL aims to deploy merchant point of sale for small shop owners, enabling them to do everything that large enterprises and large e-commerce players are able to do.

The small shopkeepers will be able to manage inventory, keep digital records and file returns, improve working capital management, retain and upgrade customers, access new customers, run promotion and loyalty programmes, link to RIL’s highly efficient supply chain, and much more.

These may be announcements or stated intentions for now. But trust RIL to concretise them. Some facts Ambani stated bear that out again.

While a major part of Ambani’s speech was devoted to Jio, he also spoke on how RIL’s traditional businesses of refining and petrochemicals continue to set records.

The company has successfully commissioned and stabilised the world's largest paraxylene complex at Jamnagar. Today, Reliance is the second largest paraxylene producer in the world and Jamnagar has the distinction of being the largest manufacturing facility of paraxylene in the world with 4.2 million tonne capacity. At 2 billion units, it is also the largest recycler of PET bottles in India.

“All these initiatives will enhance our capabilities and competencies, making us future-ready, as we transition from a cyclical business to annuity business,” Ambani said. Surely, when record-setting in cut-throat businesses is so predictable at RIL, the predictability that an annuity business will bring can only be welcomed.

(Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd)
First Published on Jul 5, 2018 07:52 pm
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