India's most valuable business is earning money hand over fist from oil. Yet what's exciting investors about Reliance Industries Ltd. are its telecoms losses.
Those should go some way toward creating the Indian equivalent of Verizon Communications Inc., the largest U.S. wireless carrier. Or at least that's what the stock's 38 percent jump this year in dollar terms is all about.
Back on Top
Optimism over its telecom foray has helped oil refiner Reliance displace software exporter Tata Consultancy as India's most valuable company
Source: Bloomberg
Over the past 12 months, Reliance's refinery on India's western coast has garnered $11 from each barrel of crude oil, beating the Singapore refining benchmark by an impressive $5 a barrel. With neither domestic gas production nor overseas shale output doing much, Chairman Mukesh Ambani, India's richest man, is betting on his almost-completed investments in refining and petrochemicals to shore up earnings and cash flow.
The strategy is working, but it's a mere footnote compared with Ambani's more daring gamble on Reliance Jio, the recently launched telecoms unit that's already supplying more than 1 billion gigabytes of data a month, almost as much as all U.S. networks put together.
While a haul of 100 million users over 170 days isn't to be scoffed at, it's thanks to a free trial that only recently turned into a paid-for (though attractively priced) introductory offer.The steady-state average revenue per user is still the big unknown.
With Jio's entry in September, rivals Bharti Airtel Ltd. and Vodafone Group Plc have cut tariffs. A 60 percent slump in fourth-generation, or 4G, data charges has meant that even with traffic surging fivefold in a year, industry revenue growth has been practically flat, according to S&P Global's Indian affiliate, Crisil.
It's hard to know when the dust will settle, though Reliance's assertion that it's"well-positioned" to achieve a share of revenue above 50 percent by 2021, when India's data market will top $46 billion a year, shows Ambani is betting big on a "winner takes all" effect.
Nothing wrong with that. As Crisil researchers say, Verizon's success has demonstrated quite clearly that market leadership is worth bleeding for. For almost a decade, the largest U.S. network has enjoyed a return on capital that's 5 to 10 percentage points higher than its competitors'.
Even by Verizon's standards, Ambani's goal of a 50 percent-plus Ebitda margin for Jio is ambitious, though. The U.S. carrier, which has a customer churn rate of just 1.4 percent -- compared with 4 percent to 6 percent in the hyper-competitive Indian market -- took in 45 percent of its revenue as earnings before interest, tax, depreciation and amortization last quarter.
Reward of Leadership
Verizon's No. 1 position among U.S. telcos has meant a higher return on capital, a strategy India's Reliance Industries wants to copy with its aggressive price war
Source: Bloomberg
In its first six months of operations, Jio's loss tripled from a year earlier to $3.5 million. That's a rounding error for a conglomerate that earned more than$1.2 billion during the March quarter.
The pressure to perform comes from the staggering $30 billion Ambani has spent on the 4G network. Roughly a quarter of Reliance Industries' share price now reflects the enterprise value of the telecoms business, according to Bank of America Merrill Lynch. As Gadfly has previously noted, investors would be impressed by Jio's ability to get to 200 million stable customers, each spending at least $4 a month.
Ambani's 4G bet
$30 billion
That won't be enough to turn Jio into India's Verizon. At least it will be a start.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
To contact the author of this story: Andy Mukherjee in Singapore at amukherjee@bloomberg.net
To contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.net
Read more:
An Indian Billionaire Is Cloning Verizon - Bloomberg
- AI voice cloning easily manipulates Biden and Trump, study finds - Fast Company - May 31st, 2024 [May 31st, 2024]
- Voice cloning of political figures is still easy as pie - TechCrunch - May 31st, 2024 [May 31st, 2024]
- Voice cloning of political figures is still easy as pie - StartupNews.fyi - May 31st, 2024 [May 31st, 2024]
- Texas A&M Researcher Who First Cloned Cat Dies At 66 - Texas A&M University Today - May 31st, 2024 [May 31st, 2024]
- AI voice cloning tools imitating political leaders threaten elections report - The Independent - May 31st, 2024 [May 31st, 2024]
- Chanley Howell on AI Cloning - 'Risks can outweigh the benefits' - Foley & Lardner LLP - May 31st, 2024 [May 31st, 2024]
- AI clones of Keir Starmer and PM raise fears of election interference - The Times - May 31st, 2024 [May 31st, 2024]
- Cloning pioneer Mark Westhusin of Texas A&M dies at 66 - Bryan-College Station Eagle - May 31st, 2024 [May 31st, 2024]
- How Revenge of the Sith Fixed Star Wars' Oldest Clone Wars Continuity Problem - Screen Rant - May 31st, 2024 [May 31st, 2024]
- Truecaller unveils AI call scanner to combat growing threat of voice cloning scams - Business Today - May 31st, 2024 [May 31st, 2024]
- AI cloning of deceased loved ones flourishes in China - NewsBytes - May 15th, 2024 [May 15th, 2024]
- Fossil Catches Starfish Cousin in the Act of Cloning Itself - The New York Times - May 15th, 2024 [May 15th, 2024]
- Experts warn of a new voice cloning scam - Crime - Ahmedabad Mirror - May 15th, 2024 [May 15th, 2024]
- Voice-cloning technology bringing a key Supreme Court moment to 'life' - The Associated Press - May 15th, 2024 [May 15th, 2024]
- Clone Trooper vs Stormtrooper: What's the Difference? - CBR - May 15th, 2024 [May 15th, 2024]
- I lost my voice because of a tumor but an AI clone gave it and my confidence back to me - AOL - May 15th, 2024 [May 15th, 2024]
- Orphan Black: Krysten Ritter Uncovers Wide Conspiracy With Young Clone In Action-Packed Echoes Trailer - Screen Rant - May 15th, 2024 [May 15th, 2024]
- The Pet-Cloning Industry is Going Wild - Air Mail - March 31st, 2024 [March 31st, 2024]
- OpenAI's voice cloning AI model only needs a 15-second sample to work - The Verge - March 31st, 2024 [March 31st, 2024]
- Beyond cloning: Harnessing the power of virtual quantum broadcasting - Phys.org - March 31st, 2024 [March 31st, 2024]
- OpenAI built a voice cloning tool, but you cant use it yet - TechCrunch - March 31st, 2024 [March 31st, 2024]
- OpenAI reveals Voice Engine, but won't yet publicly release the risky AI voice-cloning technology - ABC News - March 31st, 2024 [March 31st, 2024]
- OpenAI unveils voice-cloning tool but delays release on safety grounds - The National - March 31st, 2024 [March 31st, 2024]
- Best way to clone the SSD from old computer to new computer with an M.2 Samsung Drive? - ASEAN NOW - March 31st, 2024 [March 31st, 2024]
- OpenAI Debuts Voice-Cloning Tech, But Won't Release It Widely - PCMag - March 31st, 2024 [March 31st, 2024]
- OpenAI holds back wide release of voice-cloning tech due to misuse concerns - Ars Technica - March 31st, 2024 [March 31st, 2024]
- OpenAI unveils voice-cloning tool | National | caledonianrecord.com - The Caledonian-Record - March 31st, 2024 [March 31st, 2024]
- OpenAI Voice Cloning Tool Is Here, But Not Everyone Can Use It: Here's Why - Times Now - March 31st, 2024 [March 31st, 2024]
- OpenAI unveils voice-cloning tool | National | elkharttruth.com - The Elkhart Truth - March 31st, 2024 [March 31st, 2024]
- OpenAI reveals impressive voice cloning model, and it's scary good - XDA Developers - March 31st, 2024 [March 31st, 2024]
- OpenAI's new 'Voice Engine' clones your voice in only 15 seconds - Interesting Engineering - March 31st, 2024 [March 31st, 2024]
- OpenAI Unveils Voice Cloning Tool, But Public Access Remains Limited - BBN Times - March 31st, 2024 [March 31st, 2024]
- OpenAI reveals Voice Engine, but won't yet publicly release the risky AI voice-cloning technology - MSN - March 31st, 2024 [March 31st, 2024]
- OpenAI to introduce new voice cloning tool for limited use to prevent security breaches - Daily Jang - March 31st, 2024 [March 31st, 2024]
- OpenAI Unveils Groundbreaking Voice Cloning Technology, Prioritizes Safety Concerns - elblog.pl - March 31st, 2024 [March 31st, 2024]
- OpenAI's voice-cloning tool is impressive but full of safety concerns - NewsBytes - March 31st, 2024 [March 31st, 2024]
- OpenAI unveils voice cloning tool - FRCN HQ - Federal Radio Corporation of Nigeria - March 31st, 2024 [March 31st, 2024]
- Startup Clones Three Piglets Gene-Hacked to Have Organs Transplanted Into Humans - Futurism - February 18th, 2024 [February 18th, 2024]
- Detective Hayseed The Cloning Madness review - Adventure Gamers - February 18th, 2024 [February 18th, 2024]
- IS VOICE CLONING SOON TO COME UNDER THE FTCS NEW IMPERSONATION RULE? FTC Issued a Supplemental Notice of Proposed Rulemaking Directed at the Use of... - February 18th, 2024 [February 18th, 2024]
- Explained: What is voice cloning scam and how you can avoid getting scammed - Times of India - February 18th, 2024 [February 18th, 2024]
- UK business registry says yes, chef to hundreds of cloned IDs and restaurants - Biometric Update - February 18th, 2024 [February 18th, 2024]
- "It Has The Interest Of The Emperor": Bad Batch Star Hints At How High The Stakes Are In Season 3 - Screen Rant - February 18th, 2024 [February 18th, 2024]
- AI Voice Cloning: What It Is And How To Avoid Getting Scammed By It - NDTV - February 18th, 2024 [February 18th, 2024]
- 'They Cloned Tyrone' Ending Explained: Are Two John Boyegas Better Than One? - Collider - February 18th, 2024 [February 18th, 2024]
- Researchers develop method to boost tree genetic cloning - CGTN - February 18th, 2024 [February 18th, 2024]
- A mysterious phone call cloned Biden's voice. Can the next one be stopped? - POLITICO - January 30th, 2024 [January 30th, 2024]
- AI-generated voice cloning: Tips on how to protect yourself from scams - Boston 25 News - January 30th, 2024 [January 30th, 2024]
- Years Before Jurassic Park, The Boys from Brazil Presented Cloning as a Terrifying Possibility - Syfy - January 30th, 2024 [January 30th, 2024]
- How to clone a HDD to an SSD for free on Windows - PCWorld - January 30th, 2024 [January 30th, 2024]
- Endangered bulls have been cloned in China - AzerNews.Az - January 30th, 2024 [January 30th, 2024]
- Ian Wilmut, Scientist Behind Dolly the Cloned Sheep, Is Dead at 79 - The New York Times - September 17th, 2023 [September 17th, 2023]
- Kang the Conqueror's New Chrono-Clone Power Proves He's ... - Screen Rant - September 17th, 2023 [September 17th, 2023]
- 17 Years Later, a Forgotten Star Wars Invention Could Save a ... - Inverse - September 17th, 2023 [September 17th, 2023]
- Bixby's voice cloning feature is getting a wider rollout - Android Authority - August 28th, 2023 [August 28th, 2023]
- The next chapter in publishing: Embracing text-to-speech and AI ... - WAN-IFRA - August 28th, 2023 [August 28th, 2023]
- How to Clone Yourself on CapCut Without a Green Screen - MUO - MakeUseOf - August 28th, 2023 [August 28th, 2023]
- Halton Police arrest two in VIN cloning investigation - HaltonHillsToday - August 28th, 2023 [August 28th, 2023]
- Best tycoon games on Roblox: My Dragon Tycoon, Clone Tycoon 2 ... - CharlieINTEL.com - August 28th, 2023 [August 28th, 2023]
- Inside a sex toy factorys clever uses of tech and science, including cloning OnlyFans models and 3D p... - The US Sun - February 18th, 2023 [February 18th, 2023]
- How does cloning work? | Live Science - February 7th, 2023 [February 7th, 2023]
- 20 Years after Dolly the Sheep Led the WayWhere Is Cloning Now? - February 7th, 2023 [February 7th, 2023]
- Isolating, Cloning, and Sequencing DNA - Molecular Biology of the Cell ... - November 25th, 2022 [November 25th, 2022]
- Cell Phone Fraud | Federal Communications Commission - October 23rd, 2022 [October 23rd, 2022]
- Mumbai: Is cheque cloning the new con in town? - mid-day.com - October 17th, 2022 [October 17th, 2022]
- Mom Shares Surprising Differences Between Her Cloned Cat and Original Cat - Yahoo Life - October 15th, 2022 [October 15th, 2022]
- Cloning a Rare ISA Card to Talk to the First-Ever CD-ROM Drive - Adafruit Blog - October 15th, 2022 [October 15th, 2022]
- How an Ancient Species Survived Thousands of Years Without Reproducing - History of Yesterday - October 15th, 2022 [October 15th, 2022]
- 'Exception' Ending, Explained: Why Were The Crew Members Reprinted? Was Kate Reprinted At The End? | DMT - DMT - October 15th, 2022 [October 15th, 2022]
- Fraudsters Cloned Company Directors Voice In $35 Million ... - Forbes - October 13th, 2022 [October 13th, 2022]
- Projects - Octopus Deploy - October 13th, 2022 [October 13th, 2022]
- The World's First Cloned Wolf Has Reportedly Been Born in China, And It's Adorable - ScienceAlert - October 2nd, 2022 [October 2nd, 2022]
- Lancashire novelist Jenn Ashworth talks cloning herself, national awards, and having her work read by Maxine Peake - Lancashire Evening Post - October 2nd, 2022 [October 2nd, 2022]
- Gene Synthesis Market: Growing life sciences industry is Expected to Bolster the Market Growth - BioSpace - September 15th, 2022 [September 15th, 2022]
- Instagram could be cloning another rival - this time it's BeReal - WRAL TechWire - August 29th, 2022 [August 29th, 2022]
- Innocent driver's shock as police swoop on 'cloned' car in Hereford - Hereford Times - August 29th, 2022 [August 29th, 2022]
- We Are One is our gaming highlight from Gamescom 2022 - MIXED Reality News - August 29th, 2022 [August 29th, 2022]
- Molecular Biology Enzymes, Kits, and Reagents Market Analysis/Forecast 2020-2021 & 2022-2028: Burgeoning Demand for Personalized Medicines &... - August 29th, 2022 [August 29th, 2022]
- Crypto Threat: Malware Infiltrates Github Cloning Thousands of Repos - BeInCrypto - August 6th, 2022 [August 6th, 2022]
- Twenty-Five Years After My House Call To Dolly: What Have We Learned About Cloning And How Did We Learn It? - Forbes - August 6th, 2022 [August 6th, 2022]