India’s Homegrown Giant: Jio aims to be Alibaba, Tencent and Huawei rolled into one
In a neo-mercantile world where nation-states encourage homegrown tech giants, will Jio be the answer to China’s BAT?
In a week filled with massive developments, the Reliance Annual General Meeting, held on JioMeet, clearly stole the show. It completed the conglomerate’s breathtaking pivot from Oil and Retail to a homegrown tech giant that is pushing the frontiers of India’s digital economy. Here’s the analysis of what went down.
Five Key Updates that Matter
1) The Biggest Capital Raise in India
Reliance has completed a capital raise of a mind-boggling $20 billion or ₹152,056 crore in the last three months by offering 33% stake in Jio Platforms. Investors include tech giants Google and Facebook, chip-maker Qualcomm and firms like SilverLake and Vista Equity. At Rs.13 Lakh Crore market cap, RIL is now the most-valued company in India up from Rs 7.37 lakh crore a year ago.
2) A New 5G Player in Town
Jio says it has developed a complete homegrown 5G solution which is ready for launch next year. Jio plans to export end-to-end 5G solutions to telecom operators worldwide.
3) Affordable Smartphones
Jio is partnering with Google to develop affordable smartphones running a customised Android. With Qualcomm being a strategic investor, all the pieces of building a custom smartphone from Chips to OS seem to be in place.
4)IoT Play
Interestingly, Jio unveiled it’s Narrow-band Internet-of-Things(NBIoT) service which leverages Jio’s pan-India 4G network to connect smart sensors. Jio aims to connect a billion smart sensors in three years.
5) Jio Glass & Jio TV+
The AGM saw the launch of Jio Glass, a mix-reality solution that is compatible with all smartphones. Jio Glass aims to ride the COVID-19 work-from-home and study-from-home situation to deepen the VR market. Finally, the Jio TV + brings aggregated content from 12 global OTT players such as Netflix, Amazon Prime, Disney Hotstar & YouTube to Jio set-top box users.
The sheer scale and breadth of ambition make the impact of this pivot hard to analyse.
Here’s what this means
1) All the Tech Giants have put their eggs in the Jio Basket
Microsoft, Facebook, and Google are now strategic partners for Jio. Given Jio’s sheer scale, Reliance’s power to push policy changes, and these partnerships, we are looking at formidable monopoly advantages for Jio. Given the geo-strategic context with China and the need for rapid economic growth the Indian Government might just feel that it is better to back the big player capable of becoming the next Tencent to power India’s digital economy. After all, we are living in an era of neo-Mercantile Capitalism that China pioneered.
2) Jio now has the complete tech stack
From Telecom Infrastructure to hardware design and chip-making(Qualcomm), to Operating Systems(Google) and Platforms + Apps( Jio Platforms + Apps) Reliance Jio owns the entire technology stack in India. The importance of this as a springboard for future growth and monopoly advantages is hard to overstate. No other Indian company & few companies worldwide have close to anything like this.
3) If Reliance’s 5G technology claims are true, we will soon have an Indian player in the global race to 5G
Given the Great Fracture and the blacklisting of Huawei across the West ( Britain, Italy being the latest) and tighter economic & strategic integration between the US and India, Jio could push to the 5G provider of choice for the free world.
4) The range of ambition
Jio aims to empower Indian enterprises with technology infrastructure and capabilities to lead in the Digital Revolution globally. Yup. You read that right.
5) Target Markets
Mukesh Ambani has repeatedly spoken over the last 5 years of RIL solving India’s Agriculture, Healthcare, and Educational Challenges. With Jio’s tech and partnerships, we will see moves in these key sectors over the next 5 years.
6) No Country for Startups?
Given the scale and sweeping ambitions of Jio, its partnership with Tech Giants, its ability to influence policy, and possibly the Indian government’s tacit support Indian startups could find the rug being swept under their feet. Across the world, Big Tech is eating startups for breakfast — from Silicon Valley dominated by Google, Amazon, Facebook, Apple and Microsoft to China’s ecosystem dominated by Baidu, Alibaba, and Tencent.
Governments worldwide including the Indian government are scrambling to bring in stronger regulations for the technology industry, for good reasons. But we know who can afford compliance departments. Rising regulatory costs favor larger incumbents as two years of GDPR has clearly shown.
In a rapidly fracturing technological world with rising regulatory compliance, where every country wants its own homegrown giants that can compete globally, startups will have a difficult road ahead.
Indian startups’s Laissez-faire decade from 2010–2020 may have come to an end with Jio’s mega moves. To be sure we will have more startups emerging. But the bar has been significantly raised.
What’s next on the horizon?
Place Jio’s emergence in a larger geopolitical context and the story becomes even more compelling. Given the recent friction between India and China, India finds itself with a strategic 5 times its economic heft sharing a 2000 mile border and having a middle-kingdom mindset.
Jio’s investments and partnerships are yet another indication of India’s deepening economic and technological integration into the techno-political zone led by the US and possibly joined by the EU. In this neo-mercantile era, will Jio be India’s homegrown giant who dominates the market and sets out to conquer the world, like China’s Baidu, Amazon & Tencent, or USA’s Facebook, Amazon, Google, Microsoft, and Apple? Let’s wait and watch.
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