Reliance Jio Plans To Invest Rs 50,000 Crore To Build JioGigaFiber Business
Reliance Jio Infocomm Ltd. will spend about Rs 50,000 crore in the next six to eight quarters to build its broadband network as is looks to disrupt the cable television and direct-to-home market next.
The ‘capital work-in-progress’ in Reliance Jio’s balance sheet is dedicated to the wireline business, according to Anshuman Thakur, head of strategy and planning at the telecom operator. The management—in a meet with analysts after earnings—had said the amount under that head stood at $7 billion (about Rs 50,000 crore) as of June end.
Mukesh Ambani, India’s richest man, had unveiled the plan to roll out the fibre-to-home network, called JioGigaFiber, at his flagship Reliance Industries Ltd.’s annual general meeting earlier this month. Reliance Jio plans to offer the service in at least 1,100 cities and towns. And it will come with routers and set-top boxes for television. That could unleash the next wave of disruption after the operator upended the world’s second-biggest telecom market with its tariff war.
Ambani set an aggressive target of 50 million subscribers without giving a deadline, and India’s newest wireless carrier plans to stitch local partnerships to meet that.
“That’s how the group works,” Merrill Lynch said quoting the Reliance Industries’ management as saying at the analyst meet. “Reliance Jio hopes to work with local cable operators and other players in each geography to achieve this target.”
Ambani had invited registrations from Aug. 15, saying demand will help the company prioritise where to offer its services.
The management expects an incremental capital expenditure of $130-140 for every home, including customer premise equipment, brokerage UBS said in a report. It’s considering reducing capex by looking at options like customers paying for the equipment, it said.