India Tech: How Reliance’s low-cost mobile service is transforming society
BANGALORE — When Byju Raveendran launched his eponymous education business in 2011, he took a decidedly analog approach to promote it. He spoke at packed cricket stadiums across India and traveled overseas to pitch his unique learning method to the Indian diaspora.
Aspiring middle-class parents flocked to hear his inspirational talks, where he told crowds that he learned English from listening to cricket commentary. “You don’t need to be a specialist in everything,” he told students. “Capitalize on your strength — everybody has strengths.”
Despite the popularity of his speeches, though, he found it impossible to build his business to the scale he wanted.
Eight years later, Raveendran no longer has that problem. Byju’s, as his company is known, is now an online educational juggernaut with a market value of about $4 billion, making it the most valuable educational app anywhere, investors say. It has been downloaded more than 30 million times and has 2.3 million paying customers, many of them poor or living in rural areas.
“Tech and the media are enabling education,” Raveendran says in an interview at his company’s Bangalore headquarters.
It is unlikely that Raveendran’s spectacular business transformation would have happened without Reliance Jio, India’s low-cost telecoms platform. Starting from a 2010 acquisition by Mukesh Ambani, the scion of India’s Reliance Group, Jio has invested roughly $37 billion to make smartphones and mobile data cheap enough for almost all Indians.
“Jio has helped discover a new way of learning,” Raveendran adds. “Before Jio, we couldn’t scale. Now everyone is building on Jio.”
Byju’s is one of scores of young tech companies in Bangalore whose existence has been made possible by Jio. Whether in education, e-commerce, fintech, media and even a new generation of nonprofit organizations, hundreds of young companies owe their existence to Jio.
Once known simply as the richest man in India, Ambani is now known for the dramatic way he has reinvented his family’s business in recent years. He has shifted Reliance Industries from heavy industrial operations such as energy and petrochemicals to softer businesses including telecoms, media content and retail.
In the process, Ambani is also reshaping India. Since its launch in 2015 and its first sales the following year, Jio has started to reduce the yawning disparities between city and countryside, privilege and poverty, connections and capability.
While his rise in business may have been built on controversy, today Ambani is perhaps the only national champion and true visionary the country has.
“Lots of baggage of the past has been erased by the efforts of the last five years,” said one venture capitalist in Mumbai. “He is our answer to Elon Musk. He is the only one in India willing to take a moonshot.”
Since Ambani entered the telecoms business, revenues in the Indian mobile market have shrunk by 35% in just over two years, thanks almost exclusively to the low prices and six months of free service offered by Jio, according to data from UBS. That is because Reliance has far deeper pockets than any of its rivals and has used its cash flow from petrochemicals and energy to subsidize newer initiatives under Jio, said Rohit Prasad, a professor of economics at MDI in Gurgaon.
Whether Ambani and his shareholders will be the ultimate beneficiaries of his expensive new initiative, the money Ambani has invested in Jio will have huge multiplier effects on overall prosperity for India. These may prove far more important than how many more crores will accrue to Reliance and its shareholders. And while rivals such as Tata Group may gripe, the fact is that none of the other business titans of India has ever dreamed as big as Mukesh Ambani.
“We think RIL [Reliance Industries Ltd.] has the potential to become a quadruple play (not seen anywhere globally) by bundling connectivity, carriage, content, and commerce to gain a higher share of consumers’ wallet,” noted UBS analyst Gautam Chhaochharia. “RIL can lead in telecom and media and gain significant share in retail/e-commerce.”
To students of the age of the U.S. robber barons, Ambani may appear to be India’s answer to Andrew Carnegie or John D. Rockefeller — though the 61-year-old businessman’s story is far from over. Will he be remembered by others — rightfully or not — as a ruthless businessman whose wealth was amassed by means that didn’t always bear scrutiny? Or will he be portrayed by history as a great benefactor?
Jio suggests the latter will prove to be the case.