Mukesh Ambani, the smart startup entrepreneur!
With Jio, the 63-year-old Asia's richest man has shown to world how a new business empire can be built in just four years
Hyderabad: When Mukesh Ambani announced Reliance Industries' plans to foray into India's highly-fragmented telecom business in June 2015, many raised their eyebrows in perplexity and wondered what a business group, which counts petroleum refining and petrochemicals as its core business, had got to do with 'mobile' business and how would it cope with challenging dynamics in an unfamiliar business territory.
Their skepticism was valid. Many global telecom majors including Norway's Telenor found India's telecom sector to be more of a nemesis rather than a growth engine for their worldwide operations. British telecom major Vodafone is still grappling with its Indian operations despite merging them with rival Idea owned by Aditya Birla group.
But Mukesh Ambani, the Asia's richest man with a fortune of $45 billion, remained unfazed and went ahead with his plans for diversification in a meticulous way. His interest in telecom business came to the fore when RIL bought 95 per cent stake in Infotel Broadband Services Limited (IBSL) for Rs 4,800 crore in June 2010. Earlier that year, IBSL won broadband spectrum in all 22 telecom circles in India in 4G auction. Six years later in September 2016, the oil major commercially launched 4G telecom services under Jio brand. As they say, the rest is the history. Jio acquired over 16 million mobile subscribers in the first month of its launch thanks to cheaper and innovative mobile recharge plans it offered. And it never looked back.
The new telecom brand revolutionised India's telecom sector, thus putting established players in the highly-competitive segment on the back foot. At present, the youngest telecom brand in India has over 370 million subscribers. Going by the customer base, Jio is the third largest mobile network operator in the world now. Of course, the telecom brand has been built at huge cost. RIL has invested over Rs 1.8 lakh crore in Jio since its launch. That way, Jio is the most expensive startup the world has seen so far. Recently, it entered broadband services as well. Jio counts on JioMart, an ecommerce platform, and the list goes on.
Jio's latest Rs 43,574-crore ($5.7 billion) deal with Facebook for a minority stake of 9.99 per cent in it, goes on to prove that Mukesh Ambani made a right business bet when he planned for RIL's plunge into the telecom business. The deal, one of the biggest foreign direct investments (FDIs) into India, values Jio at a mammoth Rs 4.62 lakh crore.
The timing of Jio's deal with Facebook is also well-calculated. The deal came in at a time when global oil industry is in doldrums and the future of oil refineries hangs in balance thanks to Covid-19 pandemic which brought the world to a standstill. Perhaps, he got wind of what would be in store for the businesses that depended on petroleum refineries, the core operations of Reliance Industries that he leads, when he planned for the diversification. Born on April 19, 1957, at Aden in Yemen where his father and founder of Reliance Group, Dhirubhai Ambani worked as petrol pump attendant before setting out on an inspiring entrepreneurial journey, Mukesh seems to following in the footsteps of his father who always relished the art of thinking big.
A perennial optimist and a firm believer in India's growth story, 63-year-old Mukesh Ambani has now proved himself to be the biggest startup entrepreneur in the country and showed to the world how a new business empire could be built in just four years.
That way, Jio's success offers many lesson for entrepreneurs - new and old. Foremost among those lessons is that there is no substitute for quality and economies of scale in any business. This lesson will come handy for many businessmen and entrepreneurs when they re-open their businesses and re-start their entrepreneurial journey in new AC (After Corona) era. Ironically, Mukesh Ambani succeeded in four years in a business area in which his brother, Anil Ambani, struggled to make a mark for nearly a decade and a half. Jio's entry into telecom business pushed Anil Ambani's Reliance Communications (RCom) into bankruptcy. Interestingly, Ambani brothers spearheaded RCom's launch when they were together and their father was alive. But business aspirations are thicker than blood!