India and the Internet Billionaire

Statistically speaking, with over 460 million internet users, India is the second largest online market, ranked only behind China. By 2021, it is estimated there will be about 635.8 million internet users in India. Despite the large base of internet users in India, only 26 percent of the Indian population accesses the internet. This could be about to change, if India’s richest man, Mukesh Ambani, head of Reliance Industries, has anything to say about it.

Access to the World Wide Web in this vast land has been a privilege that has eluded its small-towners and women. Although the second largest in terms of internet users, India has the distinction of finding almost 300 million of these users in an urban environment, according to research firm Kantar-IMRB and the Internet and Mobile Association of India.

Ambani and Reliance Industries are attempting to tap into the 1.3 billion Indian population by connecting them with its first 4G network. Once again the private sector to the rescue. One can only imagine the feeble attempts by the Indian government to try to produce such a venture. In fact, the same survey showed the Narendra Modi government’s efforts to bring over 1.5 lakh villages online by granting internet access at community service centers has failed to make a mark.

Ambani has got the connectivity part figured out, with cell towers now being built in remote villages. These are the same villages that currently have no paved roads or indoor plumbing, but now have broadband connectivity. The question remains will he be able to get his money out of the project and show a profit for investors going forward. For the better, the Indian people use the internet to communicate more than anything else. This will allow rural users to talk with family and friends in distant locations for roughly $2 a month.

In a brilliant move by Ambani and his Jio Company, they realized that the average Indian consumer could only afford roughly the $2 a month they were paying for data. As such, they developed a 4G phone with several smart features built into it, so the users could do more than just talk. The phone is free, with a minimal security deposit, which is returned when the phone is returned. Brilliant!

All the fun and games aren’t only for Ambani. American giants like Amazon and Google have been working around the clock for years to tap this enormous market. They had to wait for the connectivity, and now it is here. Facebook views India as it did in its genesis in the U.S., with people who want to connect with family and friends on a social network. Exactly what Facebook is trying to get back to in the U.S. by limiting publishers in favor of people. The rest of the usual suspects are not far behind. Walmart, Netflix, Apple, etc. all have their sights set on some market penetration.

Ambani and Jio are far from a fait accompli. At a recent investor’s meeting, Ambani made his intentions clear. “Even after serving the needs of our 215 plus million customers, the capacity utilization of the Jio network is less than 20%,” he said. “We are determined to connect everyone and everything, everywhere.” Sounds like a plan.

About bullmarket

Leave a Reply

Your email address will not be published. Required fields are marked *

*