Jio gets $4.4B Google investment and touts in-house 5G products

Reliance Industries has revealed details of a $4.4 billion investment by Google and plans to build its own 5G products during its Annual General Meeting earlier today.

The parent company of Indian service provider Reliance Jio hopes to connect half a billion mobile subscribers, 1 billion smart sensors and 50 million homes and businesses in the next three years.

The telco, which started operations in September 2016, is now India's market leader, with about a third of the market – some 387 million mobile customers – at the end of March 2020, according to data from the Telecom Regulatory Authority of India (TRAI).

Google invests $4.4 billion in Jio Platforms
Internet giant Google is to invest $4.4 billion to acquire 7.7% stake in Jio Platforms, the holding company for Jio. It joins several other high-profile international investors, including Facebook, KKR, General Atlantic, Silver Lake, Qualcomm and Intel, that have collectively invested $20.2 billion in Jio in the last three months.

Those investments mean Jio is now the only Indian service provider that is debt free. (See Who's invested what (and why) in India's Jio Platforms?)

Assuming Google's investment is cleared by India's regulatory authorities, its involvement will mark the first time both Google and Facebook have invested in the same company.

They will also work together on developing an affordable Android-based smartphone operating system. "We believe we can design and entry-level 4G or even 5G smartphone for a fraction of its current cost," said Mukesh Ambani, the chairman of Reliance Industries.

Earlier this week, Google it would be investing $10 billion in India during the next five to seven years. The investment in Jio forms part of this commitment. (See Google to invest $10B in India's digital future.)

India today has more than 300 million people who still use a 2G feature phone. Jio's apparent hope is that Google's support can bring smartphones to a bigger audience, helping the 4G-only service provider to expand its own customer base. It previously launched the JioPhone, a low-cost 4G phone designed to attract customers with less disposable income.

"They [people using 2G feature phones] should not be deprived of the benefits of the digital and data revolution. Jio is determined to make India 2G-mukt [free from 2G]," said Ambani in his speech at the AGM.

A government push for India to be more self-reliant has fueled optimism that an Indian brand could challenge better-known device makers. Chinese brands still control about 80% of the market.

The latest developments are a worry for Bharti Airtel and Vodafone Idea, India's two other private-sector players. A significant proportion of 2G customers use the Airtel and Vodafone Idea networks. If lower-priced smartphones become available, they could be drawn to Jio.

Jio's 5G push
Jio also claimed to have designed and developed its own 5G network technology, which, it says, will be ready for trial and deployment in the coming year. India is planning to hold a 5G spectrum auction in 2021.

If true, this would mark the first time in history that an Indian telco has developed its own in-house network products that could be exported to other countries in future.

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The move would be in keeping with the government's self-reliance initiative, which include efforts to boost the development of Indian products and services.

It comes after Jio applied to the Department of Telecommunications (DoT) to carry out 5G trials of its in-house solution. (See India's Jio wants to test in-house 5G.)

"Jio has designed and developed a complete 5G solution from scratch," said Ambani. "This will enable us to launch a world-class 5G services in India, using 100% home-grown technologies and solutions."

"Because of Jio's converged, all-IP network architecture, we can easily upgrade our 4G network to 5G," he added. "Once Jio's 5G solution is proven at India-scale, Jio Platforms would be well-positioned to be an exporter of 5G solutions to other telecom operators globally, as a complete managed service."

By all indications Jio is likely to be the first Indian telco to launch 5G services.

Jio Glass, JioMart and startups
In addition, the company also announced the launch of Jio Glass, a mixed-reality headset that is intended to support audio and holographic video calls.

Ambani said that JioMart, the company's online grocery delivery service, would work closely with Facebook's WhatsApp business "to create growth opportunities for millions of Indian small merchants and enable customers to seamlessly interact with kirana shops [local grocery stores]."

Elsewhere, Jio is already working with 20 startups and that number is likely to increase as it targets a leading role in the technology market.

"Our startup partners have contributed significantly to our strengths," said Ambani. "We are inviting even more startups to join forces with us."

— Gagandeep Kaur, contributing editor, special to Light Reading