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Updated: RIL To Postpone Its 4G Rollout To 2014: Report

RIL Reliance Industries Limited Reliance Group

Update: RIL has apparently postponed its 4G service rollout to 2014, according to a Times Of India report. Citing sources, the report states the delay was caused due a change in the company’s strategy, in which it plans to own everything including the 4G network, equipments used and allied infrastructures.

Responding to a shareholder query about the 4G launch timeframe, RIL chairman and CEO Mukesh Ambani reportedly told that they don’t want to pressurise the team to launching the service, although a senior RIL executive told the publication that they will be rolling out both high speed voice and data services before the BWA roll out obligations.

Earlier this year, Milind Deora, Minister of State for Communication and Information Technology had informed Lok Sabha that each BWA Licensee has rollout obligations depending on the service area license. As per these obligations, Licensees should provide street level coverage in at least 90% of the metro service areas and at least 50% of the rural short distance changing areas (SDCAs) within five years of the effective date, failing which the BWA spectrum provided will be withdrawn. The BWA auctions had concluded on June 2010, which means that RIL has around two more years to meet these obligations.

Earlier (June 6) : RIL chairman and CEO Mukesh Ambani continues to talk about its upcoming 4G rollout without revealing any concrete details about it. Speaking at the RIL’s annual general meeting in Mumbai earlier today, Ambani said that they have charted an ambitious plan for Reliance Jio for the next 12 months and they hope to make “rapid progress towards launching 4G services across India.”.

Interestingly, Ambani also said that they believe broadband and digital services will no longer be a luxury item among privileged few in the country and will instead be a basic necessity available to all consumers and small businesses across the country. This indicates that the company plans to launch its 4G services at an aggressive pricing. Remember that a source based ET report had earlier said that RIL plans to offer 4G data plans starting at Rs 100, while another report had suggested that RIL plans to offer data plans at Rs 10 per GB.

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What Services Will RIL Offer? Expectedly, Ambani didn’t share anything specific on what services the companies might offer, but he did provide some indicators. He said that “Reliance Jio’s next-generation digital infrastructure and services platform will embrace almost every facet of India’s economic growth and social progress”.

He also added that “they envision a new India which will use digital currency instead of paper money, for a more secure and a more convenient way to transact”, indicating that they company plans to offer some sort of digital payments system. Remember that RIL has a payment solutions subsidiary called Reliance Payment Solutions Ltd, setup in 2007, which currently offers two types of solutions – a digital wallet service called R-Pay Wallet and a prepaid card called R-Pay card.

Ambani also gave indicators for a similar education service which will allow teachers, students and researchers to connect with each other and medical services which will offer expert medical advice anywhere, anytime and also enable medical practitioners to expand their practice easily.

Reliance Jio Team: Ambani said that the Reliance Jio team has increased to 3,000 professional nationwide, up from 700 professionals in Navi Mumbai campus last year and they hope to increase it to 10,000 professionals nationwide by next year.

Remember that Reliance Jio has strengthened its team with several key appointments over the last few years. The company had reportedly appointed Sanjay Mashruwala as the Managing Director of its 4G venture in April 2013 and Maxis Communications CEO Sandip Das had also joined the venture  as the Group President of Jio Infocomm last month. Das was reported to be working with Manoj Modi, who is apparently leading RIL’s 4G rollout in the country.

Other key appointments include former Kliener Perkins Caufield venture partner Ajit Nazre and former OnMobile Global CEO Arvind Rao, who had joined Reliance Industries in an advisory capacity for the 4G rollout. Mathew Oomen who is apparently the operational head of RIL’s 4G rollout, Kiran Thomas who is reportedly assisting Oomen in the 4G rollout, Sumit Chowdhury who was appointed as the Chief Information Officer at Reliance Infotel Broadband in September 2012 and Madhumati Lele, who was previously working as Vodafone India’s customer services head.

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Future Investment: The company also plans to make an investment of Rs 1.5 trillion over the next three years across different industries including its 4G division and other divisions like energy exploration and production, petroleum refining and marketing, petrochemicals, and retail among others. However, Ambani didn’t disclose any specific breakup of this investment across various sectors.

Besides this, Ambani also reiterated that they have finalized key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the 4G project.

Reliance Jio Infocomm claims to have crossed revenues of Rs 10,000 crore during the last financial year along with cash break even with earnings before depreciation finance cost and tax expenses of Rs 78 crore, says an Economic Times report. Update: Contrary to the ET report, RIL had mentioned its annual report, that Reliance Jio Infocomm had reported a total operational revenues of Rs 408 crore for FY13, up from Rs 35 crore in FY12. This includes an Other Income of Rs 41 crore for FY13, up from Rs 39 crore in FY12.

RIL’s 4G Strategy: In April 2013, it was indicated that RIL will be offering two types of services – a wireless mobility service and a Google Fiber-like high speed broadband service along with television and other services. In line with this strategy, Reliance Jio Infocomm had inked an international data connectivity agreement with Bharti Airtel allowing Reliance Jio to connect to the world’s major business hubs and ISPs.

Reliance Jio Infocomm had also signed a Rs 1,200 crore worth agreement with Reliance Communications for sharing RCOM’s nationwide inter-city fibre optic network infrastructure and making use of multiple fiber pairs across RCOM’s 1,20,000 KM inter-city fiber optic network to provide 4G services in the country. In return, RCOM had received reciprocal access to the optic fiber infrastructure being built by RIL.

Also read our compilation on everything that is being said and reported about Reliance’s 4G services.

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Updates: Earlier version of the post had several factual errors. We apologize for the error and have updated the article with corrections.

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