Reliance Jio was first conceived when its Chairman, Mukesh Ambani's daughter Isha came back to India from Yale five years ago, and complained that the Internet connections at home were really bad. Ambani, who recounted that he had "all" the available Internet options at home at the time, realised that there was scope for disruption in this market.
Speaking at a conference organised by The Print, a digital media outfit owned by senior journalists Shekhar Gupta and Barkha Dutt, Ambani was talking about Reliance Jio, and defended its business model when he was asked if it's really viable. He replied saying that Jio is not a gamble, but a well thought-out and well-engineered business, while terming the trouble with interconnectivity as similar to a meritorious student "getting ragged".
"It is no punt. It is a well thought-out, well executed, well engineered ecosystem. It is a Rs 250,000 crore investment," Ambani said, when he was asked to justify the Rs. 150,000 crore investment that he had brought up at the launch of Jio. "We had announced this at Digital India that it is a Rs. 250,000 crore investment now, that we are taking very seriously." However, he did not go into the details of how exactly the company's model is viable - though there are some theories about this.
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About the troubles Jio had with the regulator and the incumbents, he said: "Yes we had troubles," and compared it to a bright student getting admission into prestigious institute on merit but getting ragged in the hostel.
"You have to take it in the right spirit. There is a principal and there is an ecosystem so there is a governance system," Ambani said. "I've no problem as long as I or Reliance get ragged, you are the big boys and you can take it but the consumer should not suffer and I think that is what Jio is doing."
Reiterating what he said at the launch of Jio, Ambani stressed that the company must provide value to the consumers beyond just making money, though he also added that there is a duty to the shareholders to increase the stock value. However, he did not go into any details about how Reliance will accomplish this, and instead said, "as usual, we will prove the financial community wrong."
Written with PTI inputs