Then there is an average indian feeling pride about how Jio is able to attract such investments. So, some of us may have considered it, and would have spoken about it, but a lot are not really aware. When people do speak against these, they are usually tagged as cynical or contrarian because speaking against a public figure in India is sometimes considered speaking against India.
P.S. Sorry for being so vague, but this requires a lot of context to ascertain why it is this way. I dont blame whatsapp or Facebook, just that we are a vulnerable bunch and usually believe what we want to believe.
Mukesh Amabani, is mostly raising money because he had simply too much debt, and he is also getting old. It could also be a part of larger succession planning. His kids are not that much hands-on into business as much as he was with his father. It makes sense to have a Tata Sons Trust like scenario where professional managers runs the companies while the companies are owned through a holding trust owned by his children.
The experiment with Anil Ambani's mismanagement and the state he has left his business is a lesson for Mukesh to not let it repeat with his own children.
My bet - nothing cheaper comes along. Because Reliance's biggest competitive advantage is close links with the government, regardless of the party in power. A hypothetical competitor would find it difficult to get spectrum allocated, have trouble with land usage rights, tax issues like Vodafone had.
There is a reason foreign companies set up joint ventures with Reliance, Tata, Birla etc. Ostensibly it's because these companies "understand" the Indian market. In reality, it's because they have spent decades "lobbying" political parties and will continue doing so for several decades more. A company like Sky wouldn't know how to get started with political lobbying, wouldn't be comfortable with outright bribery, can't make a long term commitment to staying in India. So they set up Tata Sky - they supply the tech, Tata supplies the connections.
So eventually if you want to be profitable and sell more services, you have to offer a good price.
It's just the way it is. I even know people who look at fares and then decide if they want to take their own two wheeler or an Ola. Online food delivery works the same way. People hunt for deals and only order through that.
Sure some people pay for services. But those are generally rare.
Can you elaborate how did that work? I never heard about this method
So firms would advertize a missed call number on the radio.
People could give that number a missed call, and they would soon get a call back from the firm - thus never spending any money at all.
The more common interpersonal example was one person having more money than the other, or being on a company plan - so they would get missed calls from their family/friends, and they would then call back.
The cost was thus borne by the firm/richer person/person with more talk time.
Actual Example from my life: My dad had a cellular plan that had lots of free minutes of calling. So, I would just give him a missed call and he would call back. This was the early 2000s I think.
[1] https://academic.oup.com/jcmc/article-pdf/13/1/1/22316427/jj...
0. https://www.counterview.net/2016/09/top-telecom-cartes-airte...
An auction exposes market pricing information which was hidden before.
In case people aren't aware, the Indian mobile sector was one of the cheapest and most pioneering markets of its time.
People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
Stuff that was in sharp contrast to the mobile plans and service packs around the world.
While people argue about data, they forget how hard it is to set up the infrastructure and the massive boost forward simple phone calls were for people.
That was the era I am talking about, not post the SC verdict.
Not sure in what way you mean pioneering but it was definitely not the cheapest! Everything cost money. Text messages, phone calls, data, roaming between states, out-of-state phone calls. Everything. All this in addition to the cost of the cell phone itself - no bundled offers with phone like AT&T did with Apple in the US.
Furthermore, you could get away with a connection from private companies like Airtel and Vodafone if you lived in a big city. Rural coverage by these players was notoriously bad. The only substitute available was the one provided by the government itself - BSNL - which got a reputation of having the "best coverage".
All that changed dramatically when Reliance came up with a Rs.500 phone which included a connection with free unlimited calls between two Reliance phones. That was the beginning of true mass adoption of cell phones in India.
> People created the 0 cost phone call - farmers and mobile users could give a missed call to a number they heard on the radio, and then they would get a call back.
This is not an example of a model working well. This is an example of a workaround to mitigate high call costs.
The 0 cost phone call is an example of the market working well - people at the bottom of the pyramid have no money to spend, and given what ARPU was, expecting even lower prices is the stuff of fantasies.
This is innovation at work. I don't know what people are expecting when what they had was already impressive for the time.
Further all 3 major firms are in massive debt, and after the SC interpretation of how they have to pay their dues, they are pretty much dead firms unless they get money.
You can already see them creating new packages to target users who have more disposable income.
I'd say make hay while the sun shines. The structure of a market dictates the strategies and tactics which work. With 3 players collusion is the norm, not competition.
If you're concerned about your privacy, it's usually known in India in the tech circles to stay away from Jio related products.
https://in.reuters.com/article/reliance-telecoms-jio/from-bi...
https://cis-india.org/internet-governance/blog/reliance-jio-...
They cant be allowed to fall, because then the only name in town is reliance, which would be even worse.
What people are forgetting is that 1) Firms already raised prices and 2) that its not about data.
Its about a competitive market. We used to have this, and it even created the thriving VAS industry for a while. That died because of classic rent seeking behavior by telecoms over the VAS firms, killing that entire engine of ingenuity.
Telecom industries are know for bad results (see America, or Australia) when its not structured correctly.
Everyone who is focusing just on prices is unaware of the number of failures and missed opportunities resulting from bad telecom market structures.
Take Net neutrality, given the telcos way, it would have long been lost and rent seeking structures would have grown on top of it - it would recreate the bundled world of cable television over the net.
This means that poor users would never get a chance to look at products which compete purely on features and value - they would look at products that are "Jio Free" or "Vodafone plus", where having a hook up with the ISP is more important than features.
Looking at it in terms of "hey prices are low" is missing the great risk this industry is in.
I hope India does grow at a large enough rate for such services to be profitable.
I think their biggest advantage is their cheap (earlier free) data services.
These competitors are the same companies who had 'cartelized' the telecom industry[0] and had refused to bring down data prices in order to ensure their profits. I wonder why questions weren't raised against TRAI back then. Once Jio entered the scene, they did bring down the prices.
0. https://www.counterview.net/2016/09/top-telecom-cartes-airte...
A few passing birdies told me that Sundarajan was far more enthusiastic about China, then India, and that he had quite some amount of aversion to his home market.
I don't think Ambani has such an obligation.
Ambani can be dealt with a stroke of a pen when the goverment wants to. China on the other hand...
Ambani on the other hand, however powerful he may be, is certainly not a bigger threat than China. Companies being Ambani owned, while worse than a competitive market, is still much better than being Tencent owned.
But better how, exactly?
Think of it this way, why did China spin off Ant Financial out of Alibaba? Had it been in hands of foreign investors, it would be a huge issue later on if it became big. And if it became big, it would be much harder to spin it off that way. You can't spin off 100 billions and not expect strong retaliation from the countries of the foreign investors.
It was much more easier for them to control Jack Ma, and ensure he never becomes too powerful.
While India is a democracy unlike China, and the government can't just get people to disappear with nobody questioning, even without such totalitarian tools, a well functioning sovereign government is always more powerful than any of it's richest people.
If the government respects the rule of law, and doesn't do any extra judicial stuff, even then it makes sense to not let a competing foreign power like China be a stakeholder in your important companies.
If it wants to maintain the appearance of being lawful and fair, there is already an Enemy Property Act, 1968 to more or less support grabbing Chinese investments (perhaps with an amendment or two). Under what pretence would they grab Ambani's property? There is Eminent Domain in India, but only AFAIK for land ownership, and even that requires fair compensation at market prices.
> Under what pretence would they grab Ambani's property?
If there is no existing law, government can make laws. I mean the government did nationalize so many banks at once right? The government is sovereign. The amount of power it holds over it's own people, even the richest ones, is far far higher than what it holds over another strong sovereign state.
Anyways this was all about power. There are so many other reasons for ensuring someone in the country holds the wealth rather than your competitor.
No. The Enemy Property Act, 1968 is specifically made for Pakistani Nationals after the 1965 Indo-Pak War. It is not generic. To declare China as an Enemy a proper War should take place between India and China. Is China ready for such a misadventure?
a) what was Christopher Columbus looking for?
b) what was Vasco da Gama looking for?
c) what were British/Dutch/French East India Companies looking for?
d) what did Alexander's ambassador Megasthenes write about in his book Indica?
e) where is Mahabharata set? Bharat is still one of India's official names.
India has had a shared cultural history for a very long time.
That it wasn't always called India is a moot point.
What we are discussing is foreign ownership and foreign power over India, and you just said that allowing EIC too much of these was a mistake
But being a single governance group isn't the point. Being culturally similar is what defines India. And it obviously is.
Ambani is still subject to Indian laws, and even if he leaves, his wealth and empire is answerable to the Indian government.
No difference in China. Do what is good for the fatherland or your fiances, you personally and your family will suffer.
>>I don't see that the Government can deal with Ambani so easily, or even antagonise him with impunity.
So like many he's wayyy to powerful to deal with. But at least he is a local, not jeopardizing India's geopolitics. Just as he can control politicians, they can control him, if/when they want to. They know what he did to become so powerful and can send 500 police officers to his offices to search for evidence if/when...
This is speculation, unless you have sources in which case please share them.
The most detailed and seemingly authentic source [1] I have seen about the Galwan brawl (that resulted in the deaths of 20 Indian soldiers and an undisclosed number of Chinese soldiers) suggests the escalation was not planned but the accidental result of a chain of events starting from a freshly deployed Chinese trooper pushing the Indian party's Commanding Officer.
[1] https://www.indiatoday.in/india/story/3-separate-brawls-outs...
1. Bring new troops trained in different area(much easier to bash someone head in with a club when you were not stationed right across from him)
2. Instantly escalate by attacking enemy officer(clearly planned event)
3. Have melee weapons prepared and ready to go(clearly planned)
Indian officer and men acquitted themselves well I have to say reacting against completely unforeseen attack with their own initiative and aggression. Shutting down this play and counter attacking.
I was born in totalitarian regime so my point of view on how things work is different. Nobody in the right mind in regime like PRC will show initiative like shoving you enemies Commanding officer. It just never happens. Those guys were ordered to do it. Consequences of doing something like that to you, your family etc without an order would be extreme.
Number of killed in the end is irrelevant, it is like US counting how many vietcong they bagged, utterly pointless. Small units, ncos and officers performed very well here.
I think it was what you call reconnaissance in force. Chinese wanted to see the quality of the opposing units, cause confusion and perhaps fear. They succeeded in first, others not so much. But they are persistent and judging from satellite photos have been building up force in the are for a while. Act 2 will come, sooner or later.
It is very consistent with the "fishermen" ramming opponents ships, killing Vietnamese sailors etc. This has been MO of the PRC for a very long time.
As for the rest, I disagree with your interpretation. It can even be argued that the Indians responded disproportionately to one guy being shoved by attacking everyone in the opposing party. Anyway we can't claim both that the Chinese murdered our troops and also that we killed more than twice of theirs than they did ours (but apparently, when we kill them, it is honourable?)
The question is if Chinese ownership of Indian industries will be bad, and the answer is an obvious yes.
As for your claim in this case, it wasn't just a freshly deployed Chinese trooper, but the whole platoon, who had built structures and arranged weapons in violation of prior agreement.
Again, I've seen this pattern: Question this government and immediately be branded as a Congress/AAP/$party sympathizer. At best people ask questions like yours, and at worst they come to an agreement that you should immediately leave India and go to Pakistan. This for questioning your government.
The recent spate of investments in Reliance JIO, have been just stake purchases. He is selling stake in his company to get capital for expansion.
Ambani has signaled that he wants investment to further grow an already rapidly growing empire of media services.
A few things are very favorable to Jio
a) Due to COVID and the expectation that this pandemic and its ripple effects will be felt for a few years, there is a very high likely hood that new customers will start consuming digital media services. And that is the key. Investments in JIO reflect the fact that it is the only company that has all it's cards right to capture the new user market.
b) Also, JIO has been at the cusp of an already rapidly increasing user base, that includes a large portion of rural people. It has seen a massive growth in user base and actual users too (No one is simply taking a phone connection and keeping it. They are actually using their JIO connections to consume content)
c) And the pandemic has come at just the right time too. Old guard companies are caught on backfoot. There is tremendous good will in people for JIO. JIO reduced costs 30X for data. It was a game changer. Peoples media consumption in India exploded.
d) In addition to this, Reliance group also has its hands in the Media and Entertainment industry. Not to mention retail, FMCG, etc.
So, as on date, JIO has the following services fully available to a large and every increasing base of users, this is apart from dead cheap 4G internet connectivity on phones and dongles.
1) Movies 2) TV Channels 3) Retail Shopping, they recently launched a competitor to Amazon. 4) Games 5) Educational content.
and a myriad more.
But here comes the best part. There are a couple of reasons India tailor made for services.
1. It has a large pre-teen, teen and young adult population, that will dominate consumer markets for at-least 5 decades. 2. It has 28 states, 122 major languages, and similar set of cultural groups. So you have ample amount of scope to localize content and have a good audience for that content. 3. Indians love to indulge in languages and cultures from other parts of India. Punjabi songs are loved all over the country. Telugu cinemas have huge markets in southern states. Tamil movies are revered all over the country. And Indians consume a lot of dubbed content. Including international ones, like Korean etc. So what this means is that media produced for one local culture / language, if received well, has a ready market all over India. This reduces risk and increases rewards. 4. Indians love to consume content. We are a noisy civilization. We consume a lot of content and want new content all the time. Movies are a huge part of the daily lives of rural villages. 5. Large number of people in rural areas have been using smartphones for the past 5 years, thanks to reducing handset costs and usage costs. They are already consuming content on the internet via Youtube, etc. They are a ready market to push content and services too.
I suspect JIO is looking for large investments to create new content for its media services and setup a distribution network for it's retail services.
Additionally, Reliance is highly respected in India. When the current CEOs father ran the company, millions of middle-class families in India bought houses, cars, got their children married, gathered retirement funds, etc riding on the sheer growth of Reliance as a company.
My father was also one of them.
Reliance is one of the companies that actually care about retail investors, at times even going to extreme measures to help them. For instance, in 1982 they took on the notorious bear cartel and even beat them:
The bear cartel was successful in bringing the share price down but Dhirubhai was smart. He realized that if this bear cartel was allowed to go on, they would have taken the share price down to wherever they wanted, and you know who would have lost? Ambani wouldn’t have lost, it’s the small investor that would have lost money and they would have lost faith in Reliance. So he said, you can’t hammer my shares
Full story/podcast here:
https://www.capitalmind.in/2020/01/podcast-surviving-a-bear-...
May I know exactly what sort of connections are we talking about it? Big business families have always had some relationship with politicians in India but they were less evident 2-3 decades back then due to then governments' incline towards socialism.