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It’s Not A Punt, But A Rs 2.5 Lakh Crore Investment, Says Mukesh Ambani

Reliance Jio looks to grow beyond telecom.



Mukesh  Ambani, chairman and managing director of India’s Reliance Industries (Photographer: Adam Berry/Bloomberg)
Mukesh Ambani, chairman and managing director of India’s Reliance Industries (Photographer: Adam Berry/Bloomberg)

India’s richest man just upped the stakes to Rs 2.5 lakh crore from Rs 1.5 lakh crore in Reliance Jio Infocomm Ltd. Mukesh Ambani made the announcement in an Off The Cuff series conversation hosted by veteran journalist Shekhar Gupta.

Ambani’s comments bring some certainty on the investments that Reliance Industries Ltd. plans to make in its telecom arm, said an analyst at a foreign brokerage who did not wished to be named.

Reliance had indicated that its investment in Reliance Jio will exceed the stated Rs 1.5 lakh crore investment, but had not provided any details so far, said another analyst at a domestic brokerage, on the condition of anonymity.

This is not the first time Ambani has mentioned the Rs 2.5 lakh crore investment figure. He claimed this investment in July last year at the Digital India week.

We at Reliance will invest over Rs 2.5 lakh crore across Digital India pillars.
Mukesh Ambani, CMD, Reliance Industries at Digital India Week in July 2015

And even though Ambani had committed to an investment of Rs 2.5 lakh crore at the Digital India week in July last year, neither Reliance Industries nor Ambani elaborated on the details of this investment and whether it will be linked to Reliance Jio till last month’s shareholder meet.

So Where’s The Additional Rs 1 Lakh Crore Going?

At Reliance Industries’ 42nd shareholder meeting, Ambani had said Reliance Jio plans to enter the fibre-to-home business, but did not detail the additional investments it had planned over and above the Rs 1.5 lakh crore it has already invested in Reliance Jio.

Starting in select cities, Jio is rolling out a fibre-to-home wireline network. This initiative will push the power of data even further, and will offer data speeds up to 1 Gigabit per second. Again, this is at par with the most advanced wireline offerings anywhere in the world. Our plan is to progressively extend this network to more and more cities. At the same time, Jio will also be extending this optical fiber network to enterprise locations.  
Mukesh Ambani, CMD, Reliance Industries at 42nd Annual General Meeting

Reliance Jio will invest Rs 1 lakh crore over the next three years on the rollout of fibre-to-home wireline network in eight cities, said a company official on the condition of anonymity. The pilot project has already begun in parts of Mumbai and Navi Mumbai, he added.

Reliance will announce its second quarter earnings on October 20, 2016 and analysts hope to get better clarity on Reliance Jio’s investments going forward.

Off The Cuff, a media conversation with Shekhar Gupta, Editor-in-Chief, ThePrint