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

Samsung inexplicably delays Exynos 2200 launch

No new date set yet

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Before launching the next Galaxy S flagship series, Samsung often unveils the attached Exynos processor ahead of time. However, this year’s Exynos 2200 is still suspiciously absent. According to sources, Samsung was initially set to launch the new chips on January 11. Since it’s already February 12, the chip’s launch is obviously delayed for an inexplicable reason.

The delay did not come with any warning. The Exynos 2200’s launch date came and… nothing. No word from Samsung on a delay reason or even a new launch date. Even Ice Universe, one of the most knowledgeable sources for Samsung, is scratching their head, wondering why Samsung suddenly backed out of the date.

It isn’t Samsung’s first delay, though. Since the start of the ongoing COVID-19 pandemic, the world is going through a massive semiconductor shortage. Several devices have been delayed or are undergoing stock problems. Samsung had already pushed back dates in the past. However, this is a rare last-minute delay.

Of course, despite the delay, Samsung still has time to release the Exynos 2200 before the Galaxy S22’s launch. According to a recent source, Samsung is set to launch the next flagship series on February 8. The upcoming chipset will reportedly perform at par with the recently launched Snapdragon 8 Gen 1. Amid inexplicable delays, Samsung still has several launches up its sleeve.

Postponements likely won’t mean much in the grander scheme of things, but it will be an interesting tale to hear why Samsung had to back all of a sudden.

SEE ALSO: Samsung unveils 2022 sustainability initiatives

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Enterprise

Tencent reportedly acquires Xiaomi’s Black Shark division

For 3 billion yuan

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The gaming smartphone market is thriving with a few companies building their own divisions dedicated to the niche segment. With the market’s success escalating, more companies want to join in on the fun. Unfortunately, despite their desire, some brands don’t really have any smartphone assets to begin with, leading to buyouts and takeovers. An example of that, Tencent is reportedly buying Xiaomi’s Black Shark gaming arm.

Revealed on his Twitter, tech leaker Abhishek Yadav unveiled the upcoming plans. Chinese gaming company Tencent will acquire the gaming smartphone brand for a staggering CNY 3 billion. However, the leak did not reveal any additional details surrounding the acquisition. Of course, there are a lot of possibilities with such a deal.

Though the company is known for its varied gallery of games, Tencent has also dabbled in other markets. For example, the brand has previously partnered with gaming smartphones to either promote itself or build a phone with the brand’s games packed in.

On the other hand, Black Shark is Xiaomi’s take on the gaming smartphone market. Several Chinese smartphone makers created separate brands to delineate their flagship arm from their forays into mobile gaming. Last year, the brand released its latest flagship, the Black Shark 4.

Given their profiles, a Tencent x Black Shark partnership is either a match made in heaven or an unlikely pairing. A gaming company acquiring another gaming brand does make sense, but Tencent doesn’t have much experience creating smartphones besides the occasional partnership. Once confirmed, the leaked deal will have a lot to prove in the gaming community.

SEE ALSO: Black Shark 4: Price and availability in the Philippines

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Automotive

FIRST LOOK: John Deere Autonomous 8R Tractor

Control your tractor within the reach of your fingertips

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Remember when Michael Josh took a ride on a self-driving tractor? Well, it’s not a mere concept anymore.

Freshly unveiled this CES 2022, the John Deere 8R is an autonomous tractor that can be controlled through your phone. You’ll even get notified when there are obstacles in the field or just when your tractor’s tire pressure isn’t enough.

Watch our first look at John Deere’s Fully Autonomous Tractor to learn more.

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