Enterprise

This Indian telco has raised more than $20 billion during the pandemic

Includes investors like Google, Facebook, and Qualcomm

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The Coronavirus pandemic has forced countries to implement strict lockdowns and curb international travel. Economies have fallen drastically due to lower spendings and rising unemployment. Healthcare has become a priority. Meanwhile, defense, as well as infrastructure costs, have been sidelined.

Work-from-home has become the norm and companies are actively trying to reduce operational costs. Investors have burned a lot of money since startups dependent on the gig economy are the worst hit. Raising funds right now is a herculean task and most start-ups are expected to go out of business in the coming months.

However, one company has taken full advantage of the pandemic-led lockdown. Officially called Jio Platforms, it’s an Indian telecom operator with more than 300 million active users. Dubbed Jio casually, it’s more than just a telecom operator and has managed to raise more than US$ 20 billion within a span of three months. Investors include marquee names like Google, Facebook, Qualcomm, Mubadala (sovereign fund of Abu Dhabi), Vista Equity, and more.

Google has also acquired a stake in Jio for US$ 4.5 billion. It has picked up 7.75 percent in the company, taking the total sale to 32.95 percent. The Google stake sale came to light immediately when the copy was ready for publishing and hence couldn’t be updated.

By Sanuj Bhatia

To be precise, Jio has raised US$ 20 billion from 13 companies by just selling a 25.2 percent stake. Considering the current investments, Jio is roughly valued at more than US$ 60 billion. What’s so special about this company that Facebook decided to splurge US$ 5.7 billion for just 9.99 percent?

India — the most promising market for any internet company

The US has always led the tech race in terms of research and innovation. With a developed economy, the market is self-fulfilling and companies are actively looking for new regions to expand to. The American influence is easily visible in western allies like the European Union, Japan, South Korea, as well as the Philippines.

India, on the other hand, is a developing economy that completely skipped the computer or laptop age and jumped onto the smartphone era. Today, it’s the world’s second-largest smartphone market, and 70 percent of the hardware is dominated by the Chinese. However, most phones run on Google’s Android, and American tech companies have been successful in expanding. This includes Facebook, Amazon, Netflix, Google, and more.

However, the telecom market remains hugely untapped. What will a smartphone do without wireless connectivity?

The rise of Jio and its ripple effects

At the beginning of 2016, 1GB of 3G data cost approximately INR 250 (US$ 3.3). Back then, Jio was completely owned and operated by Reliance Industries. Reliance is an Indian conglomerate that has its foothold in a plethora of segments including oil, retail, entertainment, and more. It’s one of India’s largest companies in terms of market cap and run by billionaire Mukesh Ambani. Just a few days ago, he became the seventh richest person on Earth, overtaking long-time contender Warren Buffet.

In a nutshell, Reliance pumped enough money into Jio and launched it in the middle of 2016. It was India’s first telco to offer pan-India 4G and the tariff was impossible to believe. For the first 6-9 months, unlimited 4G data was offered for free to lure customers from other networks like Airtel, Vodafone, and Idea. Considering Reliance’s backing, the company could afford to.

It also had an inherent advantage over telco’s because it directly rolled out 4G and did not support any previous standards. While other’s were figuring out inter-connection issues between 3G and 4G, Jio had already rolled out VoLTE. Jio only considered data as bandwidth and relied on internet protocol for calls, reducing its operational cost.

Within a year, 1GB of 4G data cost just US$ 0.2. India has the most affordable 4G in the world. Naturally, the competition couldn’t offer these rates without taking a hit on their profit as well as revenues. But, they had no option but to reduce tariffs. Slowly, companies like Aircel went out of business due to unsustainable rates. Vodafone merged with Indian player Idea to form Vodafone-Idea. By the end of 2019, the Indian market had only 3 players left — Jio, Airtel, and Vodafone-Idea.

Keep in mind, Jio has no debt due to its rich parent, Airtel has debt but can offload that with assets and equity, while Vodafone-Idea is on a ventilator. With more than 300 million subscribers, Jio is leading in terms of both, userbase as well as financial health.

Jio’s unique selling point — data

Reliance was planning to enter the telecom industry for a very long time and it saw it’s an opportunity with 4G. While other telcos were busy billing users for calls and SMS, Jio wanted to sell just one thing — more data. And, it came up with its own suite of services that ensured the user consumes more and more data.

India’s data consumption is expected to exceed 11GB by 2022. Although, the tariff has barely increased by 20-25 percent in the last few years. Some estimates are even more optimistic and indicate a 40 percent annual rise.

There’s no doubt that streaming services have changed the whole scenario. But, this is where Jio has an unbeatable offering. Since day one, the company has a suite of apps like Jio News, JioTV, JioCinema, JioSaavn, and even JioMeet. Today, there are 29 apps on the Google Play Store. This ecosystem ensures the user doesn’t have to look elsewhere. And, they are yet to be fully monetized. As a Jio subscriber, they’re pretty much free-to-use at the moment.

Data is the new oil

The suite of apps is mostly made for the end consumer. But, the company has grand plans for the future as well. It has already announced a partnership with WhatsApp to launch JioMart. It’ll onboard physical stores and function as a hyperlocal online shopping experience. A segment that hasn’t really taken-off yet despite investments from Amazon, BigBasket, and Grofers.

Coming to the enterprise side, Jio has acquired a plethora of startups and established companies for their know-how. This includes American telecom-technology company Radisys, Asteria Aerospace, Embibe, Haptik, and Netradyne. The company is poised to lead the 5G race due to its healthy financials and technology innovation. The company has announced it’ll carry out 5G trials based on its own technology and won’t be relying on third-party partners like Huawei.

The company is all set for the 5G future and has equivalent investments in IoT, blockchain, and digital payments. Jio may have started out as a telco, but it’s truly turning out to be a technology company.

The most lucrative technology company

All these factors make Jio a very attractive investment. Facebook tried to enter India with Freebasics and Internet.org but failed miserably. A piece of Jio gives it a chance to explore deeper than ever. For investment companies, the pandemic is a reality check. And, Jio just turned out to be a silver lining. With more and more people working from home, wireless data consumption is bound to rise.

Even companies are realizing work-from-home is a better model in many parts of the business since you can skip expensive property investments. Even if the work-from-home model fizzles out in the coming years, personal consumption will remain largely unaffected. And with India’s developing economy, smartphone penetration is expected to steadily increase. This shall also bring in more data consumption, online shopping, and other related tasks. With Jio covering all the bases, it is perfectly positioned to lead the Indian market.

Lastly, it’s essential to understand why Reliance decided to sell slightly more than 30 percent in Jio. The parent company has a debt to pay-off and its Chairman, Mukesh Ambani, had announced it’ll go debt-free by the end of FY2020. Its most valued business of refining oil has taken a hit due to the pandemic-led crude crash.

It won’t be wise to sell an undervalued asset. At the same time, Jio reached its peak. By giving away a minority stake to a range of partners, Reliance not only raised money but also established global trust and recognition of Jio Platforms.

For the global markets, the indication is clear. India is open for business and there’s huge potential.

Enterprise

Touring the first Google Store in New York City

An exquisite experience of technology, commerce, and design

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After pop-up shops and showrooms, Google finally opened its first physical retail store in the city that never sleeps.

Located on 15th and 9th by Chelsea Market in Manhattan, the Google Store in NYC offers a hip and smart experience echoing the vibe of its trendy community location.

Earlier this week GadgetMatch was invited to a special preview. Here is what we saw.

A spectacle of architecture and technology

The new Google Store features floor to ceiling glass that allows a glimpse of its sophisticated exteriors.

A Google campus bike is parked outside the store.

Come on, let’s have a look.

My senses are… overwhelmed

The Google Store is intended to be both a space where one can experience the entire range of Google hardware, and a shop for those wanting to take it all home.

The Nest Gallery Wall. Images/GadgetMatch

From Pixel phones and Nest products to Fitbit wearables and even Pixelbooks — there’s a lot to explore and experience.

An interactive exhibit

There’s a 17-foot-tall circular glass structure near the main entrance called the Google Imagination Space. It’s a set of custom interactive screens featuring rotating exhibits of the best of Google’s products and technologies.

It was designed and engineered with local New York partners so you can probe the possibilities of Google Translate and the capabilities of machine learning. You can try a real-time translation of your speech into 24 languages simultaneously when you speak to the exhibit. If you want to know the technology behind it, the exhibit will also showcase the hows.

The Nest Living Room

The Google Store lets you play on their sandboxes. One is the Nest Sandbox, decorated as a simulated living room filled with Nest products.

You can explore how Nest provides useful solutions that you can apply — should you decide to build your own Nest smart home.

It’s definitely social-media-worthy, in case you ever want to drop by.

Stadia Sandbox

Of course, there’s a dedicated space for those who love playing games. You can freely experience and game on Stadia through the Stadia Sandbox.

The whole vibe speaks futuristic and contemporary!

Workshop space

While Apple has a video wall called The Forum as a center stage for creativity, Google has a Workshop Space that caters to various events such as family storytime, Nest cooking demos, Pixel photography lessons, YouTube concerts, and the likes.

Commitment to sustainability

Sustainability is always at Google’s core — whether it’s their technology, hardware, or even a physical store. Every element of the Google Store was meticulously considered and selected. From the materials, building processes, mechanical systems, and more.

For instance, each lighting fixture is energy-efficient — working with the U.S. Green Building Council to achieve a LEED Platinum rating, the highest certification within the Leadership in Energy and Environmental Design green building rating system.

All the help that you need

There’s also a Here to Help support desk, complete with associates that will help assist your needs, answer all your questions regarding technology, and aids you on an on-site repair of your Pixel smartphone.

The Google Store opens its doors for business starting June 17, 2021 at 10 a.m. Eastern. You may visit it at 76 Ninth Avenue in Chelsea, Manhattan, New York City.

All photos by GadgetMatch.

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Enterprise

Amazon is acquiring MGM Studios for $8.5 billion

Amazon isn’t giving up on the streaming wars

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Amazon Prime Video is going head-on against Netflix, Apple TV+, and HBO Max. And to get a headstart, the e-commerce giant is acquiring MGM Studios for a whopping US$ 8.45 billion.

The film studio is behind the Rocky, Legally Blonde, and James Bond franchises.  Also included are more than 17,000 TV shows. Once the deal closes, the short-term impact will be unfettered access for Amazon’s Prime Video platform.

Bond is the fifth most valuable movie franchise of all time, with its 24 films to date grossing more than $7bn, behind only the sprawling Marvel Cinematic Universe. MGM’s library includes unscripted TV shows like The Voice and Shark Tank and modern TV shows like The Handmaid’s Tale and Vikings.

It is the second-largest takeover deal ever struck by Amazon. In 2017 it paid US$ 13.7 billion for the upmarket US grocer Whole Foods. Amazon said it’d “preserve MGM’s heritage and catalog of films” and provide customers with greater access to existing works.

However, this transaction isn’t uncommon. Disney’s US$ 66 billion acquisition of Fox assets gave the world’s largest media company the extra content muscle to successfully join the streaming wars with the launch of Disney+. It later went onto acquire India streaming company Hotstar for an undisclosed amount. Back then, Hotstar had close to 400 million monthly active users, and many of them view the free, ad-supported content.

Amazon doesn’t report any metrics about Prime Video’s usage, for instance, and the only reference to content expense is in a footnote to its financial statements. Hence it’s unknown how many active users it has. Since the streaming service is clubbed with Amazon’s e-commerce business, it’s also a very affordable purchase for a user.

“The real financial value behind this deal is the treasure trove of IP in the deep catalog that we plan to reimagine and develop together with MGM’s talented team,” said Mike Hopkins, senior vice president of Prime Video and Amazon Studios. “It’s very exciting and provides so many opportunities for high-quality storytelling.”

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Enterprise

The US has finally lifted the formal securities ban on Xiaomi

Because Xiaomi is not state-owned

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Xiaomi said that a US court had removed it from a list of companies classified as “Communist Chinese military companies (CCMC).” The company was one of several Chinese firms to be blacklisted in the final days of the Donald Trump administration.

“The company reiterates that it is an open, transparent, publicly-traded, independently operated and managed corporation,” Xiaomi Chairman Lei Jun said in the statement.

The court filing marks a reversal in policy after Joe Biden’s administration took over the President’s office. Three Chinese telecom companies were delisted from American stock exchanges like the New York Stock Exchange (NYSE).

The relief comes after Xiaomi filed a lawsuit against the government in February. A judge proceeded to temporarily block the order against Xiaomi, saying it was “deeply flawed.” The two parties came together on a mutual agreement, ending the spat out of court and marking a fresh ray of hope in Sino-US ties.

The blacklist is different from the US Entity list, which includes Huawei and DJI. The blacklist means American investors will be prohibited from buying their securities and will have to divest their holdings by the end of the year.

Even though Xiaomi does not have any considerable presence in the US, being in the good books is worth a lot. Huawei’s ban has massively damaged its reputation outside of China, and even apps like TikTok have come under fire in countries like India due to Chinese ties.

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