If you thought Reliance’s hot streak of selling stakes in Jio Platforms was over after 12 deals with Intel Corporation’s investment arm being the last one, you were wrong. It has recently been found out that Mukesh Ambani has cracked yet another deal for its 4-year-old emerging telecom giant.
Qualcomm Ventures, on Sunday evening, has declared that they will be acquiring a 0.15% equity stake on a ‘fully diluted basis’ in Jio Platforms by investing a whopping $97 million (RS 730 crore). In a statement regarding the same, the company has stated that they will be helping Jio Platforms roll out ‘advanced 5G infrastructure and services for Indian customers’
RIL has made it known that Qualcomm has valued Jio Platforms at an equity value of ₹4.91 trillion and an enterprise value of ₹5.16 trillion. With this, RIL has managed to raise a total of ₹118,318.45 crores by selling a total of 25.24% stake in Jio Platforms to Facebook, General Atlantic, TPG, KKR, Silver Lake, L Catterton, Vista Equity Partners, Abu Dhabi Investment Authority, Mubadala Investment Company, and Public Investment Fund (PIF), Intel Capital along with Qualcomm Ventures.
Qualcomm: A Strategic Partner For Jio To Dominate 5G In India?
In its recent annual report, Reliance has mentioned how Jio, by leveraging its 5G-ready network and extensive fiber assets, will be playing a key role in the development of the 5G ecosystem in India, based on market dynamics.
Now, with Qualcomm onboard, Reliance can be expected to ramp up its pace to a large extent when it comes to rolling out 5G in India. The California-based firm is a global wireless technology innovator and a massive driving force behind the development, launch and expansion of 5G technology. The company has spent over $62 billion in cumulative research and development and has close to 140,000 patents and patent applications under its name.
It should also be noted that Qualcomm recently launched a new reasonably priced 5G-enabled chipset in the Snapdragon 600 series called Snapdragon 690. This is something that can easily be leveraged by Reliance Jio to introduce low-priced 5G enabled smartphones in India.
According to Ambani, JioPhone has been instrumental in successfully transitioning and upgrading close to 100 million users from 2G feature phones to 4G network. Thus, it wouldn’t be too far fetched for Jio to opt for a similar route in order to upgrade existing 4G users to the 5G network by launching a new version of inexpensive 5G enabled JioPhone which will be equipped with either Qualcomm’s Snapdragon 690 chipset or any other lower-priced 5G chipset custom-designed for JioPhones.
To penetrate markets like India – which is driven and known for its price sensitivity – with 5G smartphones at a jaw-dropping price could be a masterstroke. The initial onboarding of customers is the biggest challenge for any company after the rollout of any new service. By offering 5G smartphones at jaw-dropping price Jio could trigger a mass acquisition of 5G subscribers in India. And this could easily be done by having Qualcomm by its side.
As the world has started moving into 5G era, companies in various countries have started gearing up to make the shift smooth. It’s estimated that worldwide 5G subscribers will reach 2.8 billion by 2025 and the spectrum auction of 5G in India is expected to start from 2021. The number of 5G subscribers in India is expected to reach 180 million by 2025 and all the leading telecom companies have already set their eyes on the 5G adoption pattern to enjoy the early mover’s advantage. To keep its dominant position intact, Jio is leaving no stone unturned to lure data-hungry customers in India, especially when 5G services will start rolling out in the market.
It’s expected that Jio will account for nearly half of total mobile subscribers in India by 2020. And now with Intel, Qualcomm, along with few other tech behemoths, by its side, Jio is aiming to give every other competitor run for their money in the 5G era.
Currently, the telecom arm of Reliance Jio Platforms competes with Bharti Airtel and Vodafone Idea in the Indian telecommunications space which it has totally disrupted by offering cut-rate voice and data plans. In 4 short years, it has already become one of the top carriers in the world’s second-largest internet market by amassing 387.5 million subscribers. Apart from that, the digital unit of Jio Platforms as of now offers numerous digital services in the streaming category such as music, live TV channels, and movies and TV shows. It has also launched a new service earlier this month known as JioMeet which is a video conferencing tool.
There is absolutely no doubt that Reliance Jio’s bigger picture is to become a homegrown multi-faceted digital giant that can take on international giants such as Google and Amazon on the homefront. Global companies are well about it and closely monitoring such developments in India. With Jio by its side, Qualcomm too will enjoy the domination on 5G chipset market by creating huge demand of 5G chipset enabled devices in a short span of time.
Now, it remains to be seen how will Jio’s plan of the action unfold going forward in the future. We will keep you posted on all future developments. Until then, stay tuned.