Archive for April, 2014

RIL to start 2,000 Digital Xpress Mini Stores with Jio’s Launch

April 22, 2014

After announcing that the retail venture of Reliance Industries Limited (RIL) had posted pre-tax profits for the first time since the division’s inception in 2006, the Mukesh Ambani owned chain is concentrating its efforts on opening 2,000 outlets of Reliance Digital Xpress Mini in the current fiscal year. Reliance Digital Xpress Mini stores are a scaled down version of the popular Reliance Digital store that caters to only the mobile market and sell accessories and handsets. These stores are compact at around 250 square feet in area and along with the aforementioned mobile handsets and accessories will also sell the services of Reliance Jio – RIL’s hotly awaited 4G services in India.

This idea has been tried and tested by another telecom operator in India – Bharti Airtel. Sunil Mittal’s company has operated over 1,700 stores for over a year now and such Company-Owned Company-Operated (COCO) stores have proved to be hugely adventitious for Airtel. Reliance Jio has planned such COCO stores to maintain uniformity in customer services, an official said on condition of anonymity. Within Reliance Digital, analysts found that communication and mobile products were selling like hot cakes. Also, a company spokesperson commented, “Driven by rapid technology advancements, this category is witnessing faster replacement cycles.”

The concept in launching the new store is to provide a differentiated technology shopping experience to consumers. This will ensure that Reliance Digital remains a frontrunner in this segment. Also, because of the store’s size, it can be accommodated in a variety of locations such as business parks, malls and even places of high public traffic. The idea behind micro-stores hasn’t been lost on other brands as well. Apple, that had so far shied away from going directly to the neighbourhoods and restricted their stores to high street and malls, is now planning to aggressively push with smaller stores in large and tier-II cities in a renewed India-specific strategy.

The mobile and tablet market isn’t as lucrative as the TV or refrigerator market for dealers. With large scale consumer appliances like TV’s and refrigerators, the gross margin that a dealer makes is around 15%, whereas in the mobile market it’s only 6-7%. This is why it makes sense for retailers and brands to open more number of smaller stores where operating expenses such as rentals are low and can employ skeletal staff. Hence, the viability of smaller stores is much more than the largeformat outlets.

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Reliance Jio Beefs up Backend Infrastructure in Time for 4G Launch

April 17, 2014

India’s already crowded telecom market is about to get a new entrant – Reliance Jio Infocomm Limited (RJIL). The Mukesh Ambani owned company after investing over $11 Billion is all set to be the first company in India to launch nationwide fourth-generation or 4G services. RJIL, a unit of Reliance Industries Limited (RIL) has commenced installing backend infrastructure to support nationwide services as September ’14 looks like a likely date for the launch. In February, the company spent $1.8 billion to buy airwaves to compete with Vodafone Group Plc (VOD), the world’s No. 2 by users, and billionaire Sunil Mittal’s Bharti Airtel Ltd.

India’s Huge Potential

India 893 million subscribers are set to grow as gaming and social networking on mobile continues to grow at break-neck speed. While this is immensely promising for companies entering or looking to enter the market, the other side of story is far more daunting. Bharti Airtel’s ambitious expansion has left the Sunil Mittal owned company with $9.3 billion in net debt and shrunk its profit by 75%. Nevertheless, Reliance Jio is continuously investing and looking to expand as it seeks to be the number one data provider in India. This also marks the return of India’s richest man, Mukesh Ambani to the mobile market after nearly a decade.

Infrastructure Build-Up

RIL is a conglomerate in the true sense of the word. The company, started by DhirubhaiAmbani in the 1960’ as grown from being a supplier of polyester yarn to one of the world’s biggest oil & gas companies in addition to spearheading a retail revolution and owning a sports team – Mumbai Indians.

Reliance Jio already has access to 1,69,000 towers through deals and sharing agreements signed with Bharti Infratel, Anil Ambani’s Reliance Communications and Viom Networks, a JV between Tata Teleservices and SREI Infrastructure Finance Ltd. In addition, manpower at the company is going to increased substantially. The total strength at present looks set to be tripled to 10,000 as the rollout nears.Also, RJIL has placed an order of 10,000 lithium batteries to SaftGroupe SA (SAFT), a French battery maker. Lithium batteries are used to contain the fuel pilferage that is prevalent in diesel-powered towers. This is being tested at 11 locations in Ahmedabad and Mumbai.

A Sign of Things to Come

Mobile is growing in India. Analysts continue to be optimistic about the overall market as they feel the Indian market is still untapped to a great extent. Smartphone shipments to India increased by more than 160% from 16 million to 44 million in 2013 as compared to 2012. The bigger picture however is that the overall percentage of smartphone users in India grew from 10% in 2012 to 22% in 2013; and this is growing every month. Many analysts including those at IDC feel that smartphone shipments to India will exceed those of China soon.

Data usage too has risen with the average user using between 200MB – 500 MB each month. In the coming months, expect India to be at par with the West as each user may average up to 1GB.

Investment

No one could have predicted how much the Mukesh Ambani owned company would invest in such a short time. With already $8 Billion invested, it’s likely to invest 300 Billion Rupees ($5 Billion) more in the coming months on account of higher spending on network infrastructure. In June 2010, Reliance had paid 48 billion rupees for the control of Infotel Broadband Services Ltd., hours after the company bid for nationwide wireless broadband licenses. Deep-pockets indeed!

According to post-quarterly results filed in December 2013, RIL had cash and equivalents of over $14.7 Billion – enough for its initial round of investments. While the operating income from the Oil & Gas sector, which contributes significantly to its yearly revenues shrank on account of unsurmountable hurdles in the KG-D6 basin, the numbers are still quite optimistic and investors remain upbeat about Mukesh Ambani’s company.

Tendulkar, Ganguly & Bollywood Stars to Own Indian Super League Teams

April 14, 2014

In India’s cricket crazy environment, football is fast catching up in terms of popularity; at least with the urban crowd. Now, things are about to heat up even more as the Reliance Foundation and IMG owned Indian Super League (ISL) announced the winning bids for eight football franchises on Sunday, 13th April 2014. The winning bidders included actors Ranbir Kapoor, John Abraham and Salman Khan; former Indian cricket team captains Sachin Tendulkar and Sourav Ganguly; and industrialists Harshavardhan Neotia, Sanjeev Goenka and Venugopal Dhoot.

The eight franchises selected will take part in the inaugural Indian Super League scheduled to kick off in September this year. The highlight of the league will be the presence of international stars such as Michael Owen, Hernan Crespo, Thierry Henry and many others. Naturally, this has garnered the attention of many and sources say over fifteen bids were submitted for eight franchises in the IMG-Reliance and Star India backed ISL.

The franchises that won the final bids will be hosting their home games in cities such as – Kochi, Mumbai, Pune, Goa, Guwahati, Delhi, Kolkata and Bangalore. The people owning these franchises are diverse – Bollywood Actors such as Ranbir Kapoor, Salman Khan and John Abraham, cricket legends Sachin Tendulkar and Saurav Ganguly and business houses with some like, DattarajSalgaocar and Shrinivas V Dempo already owning clubs in the I-League. Tendulkar along with PVP ventures will own the Kochi Franchise while a consortium of Sourav Ganguly, Atletico Madrid, Harshavardhan Neotia, Sanjeev Goenka and Utsav Parekh has won the bid for football-crazy Kolkata whereas, Ranbir Kapoor and Bimal Parekh are owners of Mumbai.

The average annual franchise cost of an ISL team will be Rupees 15 crore, 25 per cent more than the base price. While the franchise fees for the winning bids are not known, sources close to the development said the territories like Mumbai, Goa, Kolkata and Pune could have got a hefty premium on the base price of Rupees 12 crore a year. These figures are tame compared to those seen with Indian Premier League (IPL) Teams, but cricket is a completely different ball game in India.

The excitement from the owners has been heartening. The little master, Sachin Tendulkar commented, “The Indian Super League presents an opportunity to develop a platform for youngsters to learn and enhance their talent to develop into outstanding players.”Ranbir Kapoor took a similar view stating, “It is a moment of great pride for me to be a part of the Indian Super League and to represent Mumbai. Football has never been far away from my daily life since childhood.”The league’s inception had a lot to do with impetus from Reliance Foundation Chairperson Nita Ambani. Now, with the ISL on the cusp of putting India on the world footballing map, this could be the catalyst for making football the number one sport in India.

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Reliance Jio To Accelerate Rollout Of 4G Services Across The Country Using RCOM’S Intra-City Network

April 9, 2014

Mumbai, April 7, 2014: Reliance Jio Infocomm Ltd. and Reliance Communications Ltd. have announced the signing of a Master Services Agreement for sharing of RCOM’s extensive intra-city optic fiber infrastructure.

Under the terms of the agreement, Reliance Jio Infocomm will utilize RCOM’s nationwide intra-city fiber network for accelerated roll-out of its state-of-the-art 4G services across the country.

The agreement is based on arm’s length pricing at prevailing market prices.

RCOM’s intra-city optic fiber network extends to nearly 500,000 fiber pair kilometres, across the top more than 300 cities and towns in India.

This 3rd agreement further strengthens the comprehensive framework of business co-operation between Reliance Jio Infocomm and Reliance Communications, following the inter-city optic fiber sharing agreement signed in April 2013, and the nationwide telecom towers infrastructure sharing agreement signed in August 2013.

About Reliance Jio Infocomm

Reliance Jio Infocomm Limited (RJIL), a subsidiary of Reliance Industries Limited (RIL), India’s largest private sector company, is the first telecom operator to hold pan India Unified License. RJIL holds spectrum in1800 MHz (across 14 circles) and 2300 MHz (across 22 circles) capable of offering fourth generation (4G) wireless services.

RJIL is setting up a pan India telecom network to provide to the highly underserviced India market, reliable (4th generation) high speed internet connectivity, rich communication services and various digital services on pan India basis in key domains such as education, healthcare, security, financial services, government citizen interfaces and entertainment. RJIL aims to provide anytime, anywhere access to innovative and empowering digital content, applications and services, thereby propelling India into global leadership in digital economy.

RJIL entered into agreements with Reliance Communications for mutual sharing of telecom towers and optical fiber network. It has also entered into an arrangement with other telecom infrastructure providers for sharing of telecom towers and optical fiber which can be extended to other services as per mutual agreement of the two parties.

Reliance Jio is part of the “Bay Of Bengal Gateway” Cable System, planned to provide connectivity between South East Asia, South Asia and the Middle East, and also to Europe, Africa and to the Far East Asia through interconnections with other existing and newly built cable systems landing in India, the Middle East and Far East Asia.

RJIL’s subsidiary has been awarded with a Facility Based Operator License (“FBO License”) in Singapore which will allow it to buy, operate and sell undersea and/or terrestrial fiber connectivity, setup its internet point of presence, offer internet transit and peering services as well as data and voice roaming services in Singapore.

RJIL has finalized key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project. These strategic partners have committed significant resources, knowhow and global talent to support planning, deployment and testing activities currently underway.

From less than 700 professionals a year back, the RJIL Jio team has grown rapidly to a national footprint of over 3,000 professionals today.

About RIL

Reliance Industries Limited (RIL) is India’s largest private sector company on all major financial parameters with a turnover of INR 371,119 crore (US $ 68.4 billion), cash profit of INR 30,505 crore (US$ 5.6 billion) and net profit of INR 21,003 crore (US$ 3.9 billion) as of March 31, 2013.

RIL is the first private sector company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Corporations’ and currently ranks 107th in terms of revenues and 128th in terms of profits in 2013. RIL ranks 68th in the Financial Times’ FT Global 500 list of the world’s largest companies. RIL is ranked amongst the ’50 Most Innovative Companies – 2010′ in the World in a survey conducted by the US financial publication – Business Week in collaboration with the Boston Consulting Group (BCG). In 2010, BCG also ranked RIL as the second highest ‘Sustainable Value Creators’ for creating the most shareholder value over the decade in the world.

Key Contacts:

Tushar Pania / Atul Dwivedi +91 9820088536 / 8527793366

tushar.pania@ril.com / atul.dwivedi@ril.com

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Former Google CMO Nikhil Rungta Joins Reliance Jio

April 2, 2014

Google India’s former Chief Marketing Officer (CMO) Nikhil Rungta has joined Reliance Jio Infocomm Limited (RJIL) as its CMO. Rungta was earlier the chief business officer at yebhi.com, a well-known e-commerce company. Rungta has joined Mukesh Ambani owned-Reliance Jio from March 2014. RJIL, previously known as Infotel Broadband, is a broadband service provider which gained 4G licenses for operations across India.

Rungta’s previous experience in the marketing domain as well as his involvement in setting up new businesses is the ideal background for Reliance Industries Limited’s ambitious telecom venture. A Narsee Monji Institute of Management Studies (NMIMS) alumnus, Rungta was the person responsible for scaling up the business of Yebhi.com. Here, he focused his energies on sales, marketing and product development. Rungta’s mandate was to create the most preferred e-commerce brand in the country and build a ‘profitable’ business.

The former Yebhi.com CBO had a four-year stint with Google as its CMO. It was during his tenure that Google-owned YouTube’s user base in India grew eight times from 5 million to 40 million in addition to making Google Chrome the most popular web browser in the country. It was during this period that Google’s India arm would launch some of the most talked about print campaigns who served to promote Google search – the most widely use search engine on the internet and Google Chrome – the Palo Alto-based company’s web browser. Rungta had also launched ecosystem-shaping initiatives like Get India Business Online (GIBO) and the Great Online Shopping Festival (GOSF).

Overall, Rungta brings with him 16 years of marketing across domains such as sales, marketing and advertising. His first job after his MBA from NMIMS was as a Product Manager at Shaw Wallace & Company where he handled two of India’s biggest beer brands – Royal Challenge Premium Lager and Haywards 5000. In 2000, he would switch to Contract Advertising as an account supervisor and managed brand communications for the NIIT. After this stint, he would serve as an Account Director for Dhar&Hoon Communications. It was here that Rungta handled advertising and brand planning for brands such as Revlon, Real Juices and Aiwa. In 2003, after a switch to McCann Erickson India as a Client Servicing Director, he worked with Microsoft XBOX and Mastercard.

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