Too much overconfidence in Reliance. This is the same firm well known for totally missing the boat on India's IT boom.
It has done a great job deploying the network. Unmatched probably anywhere in the world. But that set of skills has nothing to do with charting out a vision that will work in future.
That set of skills to rollout a network at huge scale quickly, existed in India because of cut throat competition in the Telco space over 15 years.
But the skills to handle the sociological, political and psychological fallout from Scale that Zuckerberg, Dorsey et al have to deal with 24*7 does not exist in India.
They will get the Amazon/payments/delivery/cloud stuff,the easy stuff, right cuz the talent, cash, ambition and drive exists.
But the other stuff, the stuff that actually requires vision, is waiting to blow in India. If you think polarization/inequality/fake news etc etc in US is bad, go and visit India. I was there in Jan and the whole place was burning.
This bet on 4G/cloud/platforms etc is not because of some great vision of the future. It's really about crashing crude prices resulting in a huge pivot from their bread and butter Oil/Refining Business(they own the largest refinery in the world).
It can all collapse or go nowhere as that start hitting issues no one has dealt with before.
Plus there is the small issue of huge existing players who are not exactly lining up to bend over to the Ambanis.
To sum up, the Indian Internet or whatever emerges there is in for a unpredictable wild ride over the next few years and the current rose tinted view of Reliance matches what Facebook had in its early year. Expect that to change.
> well known for totally missing the boat on India's IT boom.
There's two different Reliances. When the old Papa died, the two Ambani boys divided his empire into two. The older one kept the oil etc, and the younger one got telecommunications etc. There was some agreement of not competing for X years. The younger brother's telco failed miserably and had to be bailed out by the elder. After that the elder went ahead and start his own telco. That's why he's a little late in the game.
Reliance at heart is basically a reseller. This is where their business acumen matters so much. A good reseller has to be very good at running everyday affairs. Operations, expenses and ensuring profits on unit sold have to be optimized.
Making profits as a reseller demands being good at raising funds, negotiating deals/purchases/contracts, packaging and pricing products correctly, marketing, daily operations etc etc.
So far they took big loans to offer their 4G plans for dirt cheap prices. Now they are selling their company in pieces to pay loans and be free of debt.
How will they price things going forward? Well time will tell. But it's one of those companies and business, where they have to turn in profits. They can't exactly show ads and make money like big web companies do.
> If you think polarization/inequality/fake news etc etc in US is bad, go and visit India. I was there in Jan and the whole place was burning.
This kind of gloom and doom messaging about India has been happening since the 1950s. This is more an emotion than actual facts. The equivalent of this in US is doubting the capabilities of SpaceX because of BLM protests - totally different issues.
Yup. India is growing fast, and as China has shown, people will put up with a lot as long as they see things getting better around them.
That said, India is grappling with some mindbogglingly huge problems ranging from groundwater depletion to what's likely to be the world's worst COVID epidemic, so continuing on an upward path is by no means a foregone conclusion.
The other firms were worse in vision, thus Jio had an edge.
When I was using internet on a J2ME phone and Opera Mini, it cost INR 4 for 20MB airtime (2G!), which lasted 1 day. A GB of data cost somewhere around INR 250, and lasted a month. [1]
After Jio, these days I get around 30GB of 4G data for INR 150. That's the kind of improvement that changed people's lives.
Yeah the fake news is No. 1 issue in India, WhatsApp and Facebook spoiled this country. The elder generation naively believes what they read on whatsapp and that's terrible. The young generation is driven by emotions and identity politics not logic. But I think that's orthogonal to Jio the company.
[1] It is another thing that Opera Mini was freaking fast even on that network and didn't spend even 10MB per day for casual web page browsing. But if you want to get PDF or media content the internet was both slow and expensive.
Yeah I know. I had even detected using about:config to render Kannada text on the phone which didn't support it - it cost more bandwidth but 20MB was too much for a day at that time.
Maybe we are underestimating the power of their relations with the present government, in terms of an ally that can be used to threaten or harm competitors both Indian and foreign.
Just like TikTok can be banned, other services can eventually be banned too, under the garb of nationalism or whatever and India can potentially go the full China way with Reliance as the Indian Baidu or Alibaba, or at least as a major rent seeker in the ecosystem.
With enough protectionism a local company need not try to be a quality alternative to FB or Google.
For example of some Indian Government protectionist whimsy that affected Amazon and Walmart owned Flipkart take a look at [1].
Which 'coincidentally' came the same week that Reliance had announced plans to launch an ecommerce website in India [2].
> Last month, India tightened rules that will disallow foreign-owned online retailers from selling products via companies in which they own equity, and forbid them from pushing merchants to sell exclusively through their platforms
> This is the same firm well known for totally missing the boat on India's IT boom.
Not setting up a body shopping entity is hardly big loss to Reliance.
> that set of skills has nothing to do with charting out a vision that will work in future.
How have IT/Retail/Real Estate/ Banking/ Airlines and so on vision worked in India. I see it again none too well. So what's the big deal if Reliance's vision did not pan out.
> But the other stuff, the stuff that actually requires vision, is waiting to blow in India. ...
Same crap, different pile. Good that you have option to move around though.
> This bet on 4G/cloud/platforms etc is not because of some great vision of the future..
No shit. Neither was IT industry. It was just labor cost arbitrage.
> Plus there is the small issue of huge existing players who are not exactly lining up to bend over to the Ambanis.
Could be that they live in caves in Himalayas or deep under Arabian sea. Never heard of those "huge existing players" in India who are not bending over to Ambani.
Additionally: the problem of nepotism. The most recent shareholder AGM showed up in my YouTube recos. I didn't watch the video, but in the mouse-over preview there were only 3 people: Mukesh, his mother, and his wife.
Well, the entire business started with his father Dhiru bhai ambani. It just happens to operate in a different way compared to the organizations we know in the west.
I watched the whole Jio AGM 2020 presentation. All the board members were present, through video conferencing ofcourse as were the Ambani family members who are the majority shareholders of Reliance Industries and are directors on the various companies' board of the parent group. What nepotism are you talking about? Is RIL a govt entity where it is illegal to appoint one's relative? As majority shareholders they can appoint whomever they want. Two criteria for appointments that come to mind: Trust and Competencies. For the latter they have hired many global as well as Indian executives to run Jio. For eg. Matthew Oomen who is Rel Jio's president was previously Sprint Nextel's CTO.
Wasn't shareholder AGM virtual this time because of the Covid situation? So it makes sense why it would only be family members present physically, if it was streamed from his ridiculous 20 odd floor residence.
It has done a great job deploying the network. Unmatched probably anywhere in the world. But that set of skills has nothing to do with charting out a vision that will work in future.
That set of skills to rollout a network at huge scale quickly, existed in India because of cut throat competition in the Telco space over 15 years.
But the skills to handle the sociological, political and psychological fallout from Scale that Zuckerberg, Dorsey et al have to deal with 24*7 does not exist in India.
They will get the Amazon/payments/delivery/cloud stuff,the easy stuff, right cuz the talent, cash, ambition and drive exists.
But the other stuff, the stuff that actually requires vision, is waiting to blow in India. If you think polarization/inequality/fake news etc etc in US is bad, go and visit India. I was there in Jan and the whole place was burning.
This bet on 4G/cloud/platforms etc is not because of some great vision of the future. It's really about crashing crude prices resulting in a huge pivot from their bread and butter Oil/Refining Business(they own the largest refinery in the world).
It can all collapse or go nowhere as that start hitting issues no one has dealt with before.
Plus there is the small issue of huge existing players who are not exactly lining up to bend over to the Ambanis.
To sum up, the Indian Internet or whatever emerges there is in for a unpredictable wild ride over the next few years and the current rose tinted view of Reliance matches what Facebook had in its early year. Expect that to change.