India’s richest man is preparing to set off another ripple in the country’s booming internet space.
Today (July 15), Mukesh Ambani said his telecom venture, Jio Platforms, has designed and developed a 5G solution, which will be ready for field deployment next year. This makes Jio the first Indian telecom firm to have 5G capabilities.
The solution “will enable us to launch a world-class 5G service in India,” Ambani said during his address at Reliance Industries’ annual general meet today.
5G is the next generation of mobile broadband that is said to have faster download and upload speeds. In March, Jio had sought the Narendra Modi government’s permission to undertake 5G trials using its technology and design.
India has not yet auctioned any 5G spectrum, and its plans to do so have been delayed until at least 2021 because most existing players in the telecom sector are struggling with the poor economic environment.
Besides being a first in India, Jio’s announcement is pretty well-timed even in a global context.
The timing
Earlier today, the UK banned one of the world’s leading 5G technology players, Huawei, over data privacy concerns. Appreciating the move, US secretary of state Mike Pompeo said London joins a list of the nations who are standing up for their national security by prohibiting the use of “untrusted, high-risk vendors.” Pompeo also appreciated Jio.
“Clean carriers like Jio in India, Telstra in Australia, SK and KT in South Korea, NTT in Japan, and others have also prohibited the use of Huawei equipment in their networks,” he said.
Jio’s 5G success may find support from the rising anti-China sentiments across the globe, said Ami Shah, co-founder of a Mumbai-based social media marketing firm, IntelliAssist. “Players like Huawei are being excluded, and Jio will be seen as a potential technology player to replace the same,” she said.
Besides, Ambani is not leaving any stone unturned.
The Google push
Today, Jio Platforms also announced a partnership with Google, which can be leveraged to advance its 5G aspirations. The internet search giant will invest Rs33,737 crore ($4.5 billion) in Jio Platforms for a 7.73% stake.
The two companies have also signed an agreement to jointly develop an “entry-level affordable” 4G/5G smartphone. “The Jio-Google partnership is determined to make India 2G-mukt (free),” Ambani said. “As India is standing at the doorsteps of the 5G era, we should accelerate the migration of 350 million Indians, who currently use a 2G feature phone, to an affordable smartphone.”
This partnership could prove
to be a game-changer as India currently does not have many options when it comes to affordable 5G enabled devices.
“It’s a tough call to state that Jio will be a monopolistic player in the 5G space, but certainly they have an early mover advantage not just in the domestic market but also overseas,” said Shah of IntelliAssist.
A major advantage that Jio has when it comes to 5G is the deep pockets of its parent company, RIL, which is now debt-free.
Over the last three months, Jio Platforms has raised Rs1.52 lakh crore from marquee investors such as Facebook, General Atlantic, and Mubadala. This includes today’s investment from Google.
The base price of the 5G spectrum (in 3,300 megahertz to 3,600 megahertz band) in India has been set higher anywhere else in the world. Last year, all service providers, including Jio, had asked the Indian government to lower the 5G spectrum base price. Jio’s arch-rival, Airtel, in fact, had said that it will not participate in the auction at the current reserve prices.
However, the government has said that it’s not planning to reduce the spectrum base price.
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