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New Delhi, Walt <keyword id="19899232" type="General" weightage="20" keywordseo="disney" source="keywords">Disney</keyword> CEO <keyword id="20023956" type="General" weightage="20" keywordseo="bob-iger" source="keywords">Bob Iger</keyword> has said a joint venture with <keyword id="19936674" type="General" weightage="20" keywordseo="reliance" source="keywords">Reliance</keyword> Industries after merging its <keyword id="19895063" type="General" weightage="20" keywordseo="india" source="keywords">India</keyword> business would benefit the company in terms of profit and also "derisk" its business in the Indian market. The merger deal will create a big entity and help it to stay in the market at a "significant level", said Iger at a Morgan Stanley investor conference earlier this week. "We had an opportunity to align with Reliance, which is obviously the company that has done very well there and one that we respect. And in doing so, end up owning part of a bigger media company. And we believe that, that not only should benefit us in terms of the bottom-line, but derisk us as well there," he said. Last month, Walt Disney Co. and Reliance Industries announced signing of binding pacts to merge their media operations in India. Under the deal, Reliance and its affiliates will hold 63.16 per cent and Disney will have 36.84 per cent in the JV, which will create India's leading media company that will house two streaming services and around 120 television channels. "We wanted to stay in India. We made a big investment in India when we purchased the assets of 21st Century Fox. We are one of the biggest media companies in India. But even though it is the most populous country in the world, we felt we want to be there because of that, we also know that there are challenges in that market," he said. Iger said, the merger will create a big entity and help it to stay in the market at a "significant level". "So, it's kind of the best of both worlds. We stay in the market at a significant level. We have a very good partner in Reliance, and we get to have a chance of growing a business and lowering the risk of doing so," he added. The transaction values the joint venture at Rs 70,352 crore (USD 8.5 billion) on a post-money basis, excluding synergies. Billionaire Mukesh Ambani-led Reliance has also agreed to invest at closing Rs 11,500 crore into the joint venture to give it the muscle to fight rivals such as Japan's Sony, and Netflix. Its OTT platform Disney + Hotstar has seen its paid subscriber base decline from around 55 million to 40 million in the first quarter of FY24 because of Reliance's <keyword id="19985346" type="General" weightage="20" keywordseo="jio-cinema" source="keywords">Jio Cinema</keyword> winning exclusive rights for live sports. The combined entity will have the largest OTT subscriber base. Disney + Hotstar was launched in India in 2020, post the acquisition of the entertainment assets of 21st Century Fox at a valuation of USD 71.3 billion, thereby taking over the operations of Star India and Hotstar. It housed entertainment and cinema channels such as StarPlus and StarGold as well as sports channels like Star Sports. While Disney + Hotstar rapidly increased its subscriber base initially with the streaming rights of cricket matches (IPL, World Cup), it lost the bid for the digital streaming rights in 2023-27 cycle, which was won by Reliance-backed Viacom18 for USD 720 billion, 12.92 per cent higher than what Star India had paid on an average per match value. Media ventures of Reliance are currently housed in Network 18, which owns TV18 news channels as well as a plethora of entertainment (under the 'Colors' brand) and sports channels. NW18 also has stakes in moneycontrol.com, bookmyshow and publishes magazines. NW18 owns news channels CNBC/CNNNews. Reliance separately owns a movie production arm - JioStudios, and majority stakes in two listed cable distribution companies, Den and <keyword id="20777796" type="General" weightage="20" keywordseo="hathway" source="keywords">Hathway</keyword>. SEE ALSO:<a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-february-2024/slidelist/108323754.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-february-2024/slidelist/108323754.cms" target="_blank">Top selling cars in India in February 2024</a><a href="https://www.businessinsider.in/tech/mobile/news/xiaomi-14-and-xiaomi-14-ultra-with-snapdragon-8-gen-3-launched-in-india/articleshow/108304169.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/xiaomi-14-and-xiaomi-14-ultra-with-snapdragon-8-gen-3-launched-in-india/articleshow/108304169.cms" target="_blank">Xiaomi 14 and Xiaomi 14 Ultra with Snapdragon 8 Gen 3 launched in India</a><a href="https://www.businessinsider.in/business/auto/news/retail-auto-sales-grow-by-13-in-february-but-elevated-inventory-levels-a-concern/articleshow/108289901.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/news/retail-auto-sales-grow-by-13-in-february-but-elevated-inventory-levels-a-concern/articleshow/108289901.cms" target="_blank">Retail auto sales grow by 13% in February, but elevated inventory levels a concern</a>

Merger with Reliance would boost company's profits and reduce risk in India: Disney CEO Bob Iger

<ul><li>The demerger of <keyword id="15323576" type="General" weightage="20" keywordseo="jio-financial-services" source="Orion">Jio Financial Services</keyword> (JFS) in the coming months and listing on the stock exchanges is a ‘key moment’ for the Reliance Industries’ stock. </li><li>The JFS demerger is expected to act as a catalyst that the parent Reliance Industries was missing, which is evident from the sagging stock price. </li><li>JFS’ entry could also prove to be a challenge to existing players in the space like Bajaj Finance, Paytm and PhonePe, and a successful take off could also result in attrition at banks and non-banking financial companies (NBFC).</li></ul>The <keyword id="17044379" type="General" weightage="20" keywordseo="demerger-of-jio" source="Orion">demerger of Jio</keyword> Financial Services (JFS) in the coming months and listing on the stock exchanges is a ‘key moment’ for the Reliance Industries’ stock, according to analysts at Nomura. Strong fundamentals and business outlook aside, shares of Reliance Industries (RIL) have gone nowhere since March last year. After hitting a fresh 52-week low in March this year, RIL shares are still down over 10% in 2023. The JFS demerger could be just what the parent’s shares need – value unlocking. The JFS demerger is expected to act as a catalyst that the parent Reliance Industries has been missing. “The listing and value unlocking from RIL’s financial services business in the coming months will be a key event for the stock,” said Nomura in its latest note, adding that the decline in Reliance’s shares is due to “index-related sell-off”. According to the terms of the demerger announced in October last year, all existing shareholders of Reliance Industries will get one share in JFS for each share held in the parent company. The company has now <a href="https://www.businessinsider.in/business/corporates/news/ril-calls-for-shareholder-creditor-meeting-to-approve-demerger-of-financial-services-arm/articleshow/99116790.cms">called</a> for a meeting of creditors and shareholders on May 2 for the requisite approvals. JFS is expected to list in September this year. “As JFS scales up, it can drive value unlocking given higher multiples for peers in these industries,” Nomura said. Jefferies has pegged the valuation of JFS in the range of ₹90,000 crore to ₹1.5 lakh crore, with each share of JFS valued at ₹179 in the brokerage’s base case scenario. Demerger to help JFS ‘dominate’ the industry Looking beyond the benefits for RIL’s shares, the JFS demerger will also help the financial services business attract investors and challenge existing players in the sector like Bajaj Finance and Paytm. “The demerger would help the financial services business to attract different sets of investors, strategic partners and lenders having specific interests in the financial services business,” Nomura added. Analysts at Jefferies underlined that JFS would be able to leverage the large distribution network, customer base and deep pockets of Reliance to take on existing players like Bajaj Finance, Paytm and PhonePe, among others. It will also allow JFS to emerge as the fifth largest financial services company in terms of net worth. Reliance has already made several moves to give JFS the best possible start – this includes bringing in KV Kamath, the former non-executive chairman of ICICI Bank, as its chairman. Subsequently, Kamath hired a former ICICI Bank talent, Manish Singh, to help him build a team as JFS draws closer to launch. Analysts are already watching for attrition at banks and non-banking financial companies or NBFCs. JFS to focus on consumers and merchants Leveraging Reliance’s wide reach in consumer and retail segments thanks to Reliance Jio and Reliance Retail, JFS is expected to focus on consumers and merchants as it kicks off its innings post the demerger. “JFS' key advantage will be low funding cost/ better access on the back of the group's high credit rating and ownership of 6.1% stake in RIL,” said Jefferies. Reliance’s retail arm reported<a href="https://www.businessinsider.in/business/corporates/news/reliance-retails-q3-net-profit-up-6-2-at-2400-crore-finance-costs-depreciation-weigh/articleshow/97179758.cms"> 201 million footfalls</a> across its network of 17,225 stores in Q3, which is an increase of nearly 26% year-on-year. Its telecom arm, Reliance Jio, has been the market leader for several months now, with a total subscriber base of 426 million as of January 2023. This gives JFS a strong pool of consumers to dip into. The recent acquisition of<a href="https://www.businessinsider.in/business/corporates/news/reliance-retail-to-acquire-wholesaler-metro-cash-carry-for-2850-crore/articleshow/96415905.cms"> Metro Cash &amp; Carry</a> will also give the company access to 3 million merchants, of which 1 million are frequent buyers. Upcoming Reliance AGM could lay down the blueprint of JFS strategy Reliance is expected to lay down the blueprint of its JFS strategy in detail at its upcoming annual general meeting (AGM), likely in August. This is ahead of the expected listing of JFS in September this year. “While significant efforts are needed to scale the financials business, given RIL’s robust execution, capacity to invest, industry-leading retail infrastructure and leading market share across the retail and telecom industry, it appears likely that RIL will dominate the industry,” said the analysts at Nomura, expressing their optimistic outlook. On the whole, analysts are bullish overall on RIL’s prospects and the JFS demerger, which has earned the company a stock price upgrade from analysts at Jefferies – to ₹3,100 from ₹3,060 earlier. Analysts at Nomura have given a target price of ₹2,850. The recent price correction has also prompted the analysts at JP Morgan to say that this is an<a href="https://www.businessinsider.in/stock-market/news/reliance-shares-down-22-from-all-time-high-attractive-entry-opportunity-says-jp-morgan/articleshow/98725589.cms"> “attractive entry opportunity”</a>. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/reliance-shares-down-22-from-all-time-high-attractive-entry-opportunity-says-jp-morgan/articleshow/98725589.cms">Reliance shares down 22% from all-time high: Attractive entry opportunity, says JP Morgan</a> <a href="https://www.businessinsider.in/finance/banks/news/loan-growth-showing-signs-of-reversal-from-cyclical-highs-but-asset-quality-to-remain-healthy/articleshow/99245377.cms">Loan growth showing signs of reversal from cyclical highs, but asset quality to remain healthy</a> <a href="https://www.businessinsider.in/business/corporates/news/tcs-infosys-hcl-tech-amongst-top-picks-of-analysts-heading-into-the-q4-earnings-season/articleshow/99235686.cms">TCS, Infosys, HCL Tech amongst top picks of analysts heading into the Q4 earnings season</a>

Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock

<ul><li>Analysts expect stability in the Indian telecom sector in Q2, with <keyword id="2003276" type="General" weightage="100" keywordseo="jio" source="Orion">Jio</keyword> and <keyword id="15491" type="General" weightage="80" keywordseo="airtel" source="Orion">Airtel</keyword> likely to strengthen their position further.</li><li>4G subscriber additions and lower spectrum usage charges are expected to boost telcos’ operating performance.</li><li>Focus will also be on management commentary regarding 5G capex and monetisation plans, and tariff hikes.</li></ul>4G subscriber additions and a minor boost from lower spectrum usage charges (SUC) are expected to benefit India’s leading telecom players <keyword id="6354504" type="General" weightage="50" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> and <keyword id="6354287" type="General" weightage="50" keywordseo="bharti-airtel" source="Orion">Bharti Airtel</keyword>, while Vodafone Idea’s position could worsen despite a moderate increase in average revenue per user (ARPU), according to analysts. The overall telecom industry is expected to report a stable quarter with a revenue growth of 19% year-on-year, according to BNP Paribas. On a sequential basis, however, the consensus forecast amongst brokerages is a 1-4% growth. “However, quarter-on-quarter growth (2.4%) is likely to be weaker compared with the previous two quarters as tariff hike benefits are largely behind and subscriber additions are likely to be muted,” said a report by BNP Paribas. The 5G spectrum acquired by the three telcos will not attract any SUC, which will bring down the overall amount of these statutory charges. However, since the airwaves were allocated halfway through August, brokerages say the full benefits will start reflecting only from Q3 of this fiscal year. <cmsannotation type="cmsannotation" annotationid="ARPU growth to remain moderate – another tariff hike possible" comment="subhead" text="ARPU growth to remain moderate – another tariff hike possible">ARPU growth to remain moderate – another tariff hike possible</cmsannotation> ARPU, which is the amount of money that telcos generate from each subscriber on an average, is expected to see a moderate 1-3% increase, primarily on account of higher number of days in the quarter. The brokerages suggest that most of the benefits of the <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambani-led-reliance-jio-hikes-prices-of-its-plans-by-21/articleshow/87965329.cms">tariff hikes from last year</a> have already been reaped by the telcos. Analysts at BNP Paribas and Edelweiss Research expect another tariff hike in FY23, and Vi could take the lead in this regard. “Tariff hike environment is right and we won’t hesitate to take leadership in hiking prices,” Vi’s then CEO and now chairman Ravinder Takkar had<a href="https://www.businessinsider.in/business/telecom/news/vi-betting-on-tariff-hike-as-it-lost-over-10-million-every-day-in-q1-fy23/articleshow/93348828.cms"> said during an analyst concall</a> earlier in August. Vi bled $10 million a day in the first quarter in FY23 and lost 15 million subscribers in the period. The telco reported a loss of ₹7,293 crore in Q1, and a BofA Securities report expects it to worsen to ₹7,340 crore in Q2. <cmsannotation type="cmsannotation" annotationid="What to look out for in management commentary – 5G capex, tariff hikes" comment="subhead" text="What to look out for in management commentary – 5G capex, tariff hikes">What to look out for in management commentary – 5G capex, tariff hikes</cmsannotation> Amongst key aspects in the management commentary would be the telcos’ 5G capex and monetisation plans, clarity on the boost to margins due to lower SUC overall, and details of the next set of tariff hikes. Brokerages also expect Jio and Airtel to report subscriber additions, while Vi is expected to lose 2-4 million subscribers in the quarter. Earlier, a Nomura report<a href="https://www.businessinsider.in/business/telecom/news/heres-how-much-mobile-bills-can-increase-from-5g-network-service/articleshow/93312184.cms"> suggested</a> that telcos have two options to offset the extensive 5G spectrum purchases – increase prices for their existing subscribers by 4%, or launch 5G services at a premium of 30%. For now, both<a href="https://www.businessinsider.in/business/telecom/news/reliance-jio-and-airtel-5g-prices-may-be-affordable-for-now-but-expected-to-increase-after-wider-rollout/articleshow/94636173.cms"> Airtel and Jio are offering 5G services at no added cost</a> to their subscribers, but it remains to be seen which approach they adopt when their 5G services are launched commercially. <div type="javascript" title="Custom" contenttype="Text"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/nifty50-valuations-remain-expensive-but-experts-are-divided-on-indias-growth-prospects/articleshow/94704195.cms">Nifty50 valuations remain expensive, but experts are divided on India's growth prospects</a> <a href="https://www.businessinsider.in/finance/banks/news/banks-to-reap-rewards-of-interest-rate-hikes-in-q2-earnings/articleshow/94706875.cms">Banks to reap rewards of interest rate hikes in Q2 earnings</a> <a href="https://www.businessinsider.in/business/telecom/news/5g-could-be-indias-next-growth-engine-and-a-successful-rollout-hinges-on-telcos-govt-policies/articleshow/94685725.cms">5G could be India’s next growth engine, and a successful rollout hinges on telcos, govt policies</a>

Telecom sector to ring in stability in Q2 – Jio and Airtel expected to grow stronger, Vi weaker

<ul><li><keyword id="6484187" type="General" weightage="80" keywordseo="ril" source="Orion">RIL</keyword> is now entering its fourth capex cycle, says <keyword id="48670" type="General" weightage="50" keywordseo="morgan-stanley" source="Orion">Morgan Stanley</keyword>. </li><li>It has pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into the new energy ecosystem. </li><li>RIL’s investment cycles provided 2-3x value creation for shareholders in the last two decades, says Morgan Stanley. </li><li>“We see up to $60 billion value creation in the new energy business by 2025,” the report says. </li><li>However, if refining margins are hit, <keyword id="10926" type="General" weightage="50" keywordseo="reliance" source="Orion">Reliance</keyword>’s annual debt will go up by $3 billion per annum and impact cash flows. </li></ul>Reliance has always gone big – and every capex cycle it undertakes is bigger and ‘newer’ than the last. The oil to telecom to retail major is now entering into the fourth capex cycle, according to Morgan Stanley, after the company pledged a massive ₹75,000 crore (approx. $9.4 billion) investment into a new energy ecosystem. In his own words, RIL’s chairman <keyword id="3820" type="General" weightage="50" keywordseo="mukesh-ambani" source="Orion">Mukesh Ambani</keyword> called it the most ambitious ever, at the 45th annual general meeting. In its latest report, Morgan Stanley says that every time RIL re-imagined its business, it has executed above investor expectations. “Investment cycles have unwound with around two to three times value creation for shareholders in the last two decades with every decade seeing around $60 billion in market cap creation,” the report says. This fourth cycle will also produce higher value quickly as its new energy pivot is integrated with its chemicals business and its own large captive use. “RIL’s integrated approach on solar panels and mobility/storage batteries, and focus on providing an alternative to China does stand out and we see up to $60 billion value creation in the new energy business by 2025. We raise our base case new energy valuation to $32 billion to account for quicker monetization,” the report says. RIL, which is a net energy consumer at Jamnagar, will make the green choice by putting more solar and green hydrogen projects that can help reduce its own energy costs. Moreso, it will also focus on producing high value added chemicals from its petcoke gasifiers. It will also enter the engineering, procurement and construction business for selling panels and sell panels with solutions on the back of multiple investments in technology to global customers. “We estimate the business to contribute to around $1 billion in EBITDA by 2027,” the report said. How did the past RIL capex cycles work? Starting in 1997 with Jamnagar refinery commissioning, RIL has gone through three important capex cycles so far. These pertain to gas fields at KGD6, the Jamnagar expansion in 2012 and the great re-entry into telecom. While they did create value, it did not come at no cost to the organization in the form of write-offs, impairments and ‘challenged capex’. “In every capex cycle, RIL also had its share of challenges, such as the write off of investments for petcoke gasifiers, telecom spectrum and upstream shale investments,” the report said. RIL had invested in three shale gas assets in 2010 and 2013 but exited them in 2017. In addition to investing in KGD6 block in the Krishna Godavari which is producing over 25 mmscmd of gas, RIL had also invested in Cauvery and Mahanadi basins over the years. RIL also had to rejig its investments in retail between 2006-2010 and emerged stronger in 2015-16, the report said. RIL capex that was challenged <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Year </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Challenged capex </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY03-FY10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$12.5 billion upstream exploration and production -Includes $2.7 billion impairment taken on shale investments </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY12-FY16 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$8 billion capex into petcoke gasifier </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY18 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$2 billion spectrum writeoff </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">FY22 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">$4 billion impact on petcoke gasifier value during hiveoff </td></tr></tbody></table>Source: Morgan Stanley Telecom and retail businesses are ‘settling’ Morgan Stanley believes that the timing for new energy investments is ripe. Its other businesses are unwinding and expected to unwind faster in the future. After kick starting the business with ‘free data’ and still retaining the tag of providing the cheapest data offerings, <keyword id="2003276" type="General" weightage="50" keywordseo="jio" source="Orion">Jio</keyword> is on the verge of reaping benefits. Telecom business has become a three-player market and the report expects the average revenue per user to grow by over 50% over the next four to five 5 years. That means Jio’s revenues can expand to 1.6 times its FY22 levels. It also expects its 5G investments to yield quicker monetization than 4G did. The biggest advantage that new energy investments bring is the global and national support as India pledges to move towards Net Zero emissions by 2070. However, green hydrogen, solar panels and battery technology is a fast evolving sector with new changes afoot. “Policy support in this cycle is also increasing for the new energy vertical and the government recently approved a bill in parliament to raise the use of alternative fuels, provide incentives for investments in new energy and start carbon trading also points to rising total addressable market for RIL – something we saw less of in previous cycles,” the report said. But there is a catch. For its new energy business to run smoothly, RIL needs its refining business to hold steady. Refining margins fund nearly a third of RIL's investment plans and if margins were to decline to cycle low as the business is cyclical — it will reduce operating cash flows by 20% and annual debt would rise by $3 billion, as per Morgan Stanley’s calculations. “While cycle low gross refining margins are not sustainable as there would be a supply response, we do see a net impact of 15% hit to our net asset value as RIL would see its multiple de-rate as well,” the report said. SEE ALSO <a href="https://www.businessinsider.in/business/corporates/jamnagar-is-going-green-but-on-the-back-of-its-oil-and-chemicals-business/articleshow/93859168.cms">Jamnagar is going green but on the back of its oil and chemicals business</a> <a href="https://www.businessinsider.in/business/corporates/news/gautam-adanis-overly-ambitious-growth-plans-can-spiral-into-a-massive-debt-trap-fitch/articleshow/93725014.cms">Gautam Adani’s overly ambitious growth plans can spiral into a massive debt trap: CreditSights report</a> <a href="https://www.businessinsider.in/finance/news/worst-of-times-can-also-be-the-best-of-times-says-anand-mahindra/articleshow/93376032.cms">Worst of times can also be the best of times, says Anand Mahindra</a>

RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

<ul><li><keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword> has entered into a strategic partnership with <keyword id="9023881" type="General" weightage="100" keywordseo="zupee" source="Orion">Zupee</keyword>.</li><li>Zupee is a skill-based gaming company whose games have over 70 million downloads.</li><li>Zupee recently raised $102 million in Series B funding.</li></ul>Indian telecom operator Reliance <keyword id="2003276" type="General" weightage="80" keywordseo="jio" source="Orion">Jio</keyword> has announced that it has entered into a strategic partnership with Zupee, a skill-based gaming company to integrate the latter’s apps into Jio Platforms. This comes soon after Zupee raised $102 million in a Series B funding round from Nepean Capital, WestCap Group, Tomales Bay Capital, AJ Capital, Matrix Partners India and Orios Venture Partners. The company has so far raised $121 million at a valuation of $600 million. The funds raised by the company will be used to develop new products, improving immersive design experiences, expanding markers, marketing, research, talent acquisition and more. “Jio is the perfect partner for this journey as we look to penetrate the remotest areas of India all the way to the most disadvantaged people to bring them into the fold. This resonates firmly with our idea of the internet of the future which would be open, permissionless, decentralized and limitless,” said <keyword id="399311" type="General" weightage="20" keywordseo="dilsher-singh" source="Orion">Dilsher Singh</keyword>, founder and chief executive officer, Zupee. The Mukesh Ambani-led telco will integrate Zupee’s games into its platform, allowing its users to access the games. The company will also introduce new games in multiple languages to attract users from across the country. Zupee’s games already have over 70 million downloads and access to Jio’s customers will help it boost its user base. “The timing for this partnership could not be better as we are going to be focussing on innovations in Edge Computing, Decentralised Data Networks and Artificial Intelligence creating a truly global platform with the best that India has to offer,” Singh added. SEE ALSO: <a href="https://www.businessinsider.in/business/news/jiomart-taps-whatsapp-to-deliver-groceries-vegetables/articleshow/88299422.cms">JioMart taps WhatsApp to deliver groceries, vegetables</a> <a href="https://www.businessinsider.in/business/telecom/news/mukesh-ambani-calls-for-5g-roll-out-in-india-asks-it-to-be-national-priority/articleshow/88160233.cms">Mukesh Ambani calls for 5G roll out in India, asks it to be national priority</a> <a href="https://www.businessinsider.in/tech/news/why-india-must-take-first-step-towards-5g-rollout-this-year/articleshow/88643675.cms">Why India must take first step towards 5G rollout this year</a>

Reliance Jio and Zupee announce strategic partnership, Jio users to get access to games

<ul><li><keyword id="7946308" type="General" weightage="100" keywordseo="5g-spectrum-auctions" source="Orion">5G spectrum auctions</keyword> are almost here after years of delay.</li><li>With the AGR dues case behind them, telcos and the government are coordinating to address each other’s needs.</li><li>Yet, <keyword id="6450594" type="General" weightage="20" keywordseo="5g-spectrum" source="Orion">5G spectrum</keyword> auctions may not offer the bumper harvest that 4G did.</li><li>We decode all the reasons that telcos have to go slow with bidding for <keyword id="764355" type="General" weightage="20" keywordseo="5g" source="Orion">5G</keyword> spectrum.</li></ul>The government has been pinning its hopes on a bumper earnings from 5G spectrum sale to bolster its revenues, but experts suggest it should temper its expectations and not expect a repeat of 4G spectrum auctions. 5G spectrum auctions are scheduled to begin on July 26, 2022. All the three leading telcos – <keyword id="6354504" type="General" weightage="20" keywordseo="reliance-jio" source="Orion">Reliance Jio</keyword>, <keyword id="15491" type="General" weightage="20" keywordseo="airtel" source="Orion">Airtel</keyword> and <keyword id="1553175" type="General" weightage="20" keywordseo="vodafone-idea" source="Orion">Vodafone Idea</keyword> – have tested their networks and demonstrated that they are 5G ready. But the government has been pushing back the auctions – to settle the ongoing issue of <a href="https://www.businessinsider.in/business/telecom/news/airtel-opts-for-agr-dues-moratorium-becomes-the-second-telco-to-do-so/articleshow/87254202.cms">AGR dues</a>. India’s telecom ministry and regulator sprung into action to speed up the auction process. But, its first roadblock came in after the telcos petitioned the government for a 90% cut in base spectrum prices. However, the government cut them only by 40%. The government is banking on spectrum auctions to fill its coffers, at a time when fiscal deficit in April and May has shot up to 12% of the budgeted estimate, as opposed to 8% in the same period last year. <div type="Article" hostid="261" msid="92521472" title="Akash Ambani to head Reliance Jio - that’s just phase I of Mukesh Ambani’s succession plan" mstype="2" mssubtype="0"></div> The LIC IPO fizzled out, rising inflation and the Rupee hitting record lows in the last week resulting in a decline of billions of dollars in <a href="https://www.businessinsider.in/finance/news/rbis-efforts-to-save-rupee-has-made-a-big-dent-in-its-forex-reserves/articleshow/92654557.cms">forex reserves</a> – there are several reasons for the government to extract as much as it can from the telcos. However, given the way 5G spectrum usage policies are shaping up, a bumper harvest like it was the case with 4G seems to be difficult. <cmsannotation type="cmsannotation" annotationid="Why the govt should not expect a bumper harvest from 5G spectrum auctions" comment="subhead" text="Why the govt should not expect a bumper harvest from 5G spectrum auctions">Why the govt should not expect a bumper harvest from 5G spectrum auctions</cmsannotation> The last major spectrum auction to take place was that of 4G spectrum in 2021 – this was after the telecom industry went through years of distress and consolidation after Jio’s entry in 2016. The government scooped up ₹77,800 crore from the auctions despite only a third of the spectrum being acquired by telcos. Telcos bid for the spectrum strategically, too – with the bulk of the purchases made in the mid-range, which is capable of delivering speeds ranging from 100-900 Mbps. “Don’t expect a bidding war. More than adequate spectrum is available for the three operators,” stated a report by JP Morgan. That and getting less than the desired price cut leaves telcos with little motivation or the need to bid aggressively for 5G spectrum. <div type="Article" hostid="261" msid="92356710" title="INTERVIEW: The big picture on 5G, Big Tech-telco war with COAI’s Dr SP Kochhar" mstype="2" mssubtype="0"></div> <cmsannotation type="cmsannotation" annotationid="Private 5G networks could also play spoilsport" comment="subhead" text="Private 5G networks could also play spoilsport">Private 5G networks could also play spoilsport</cmsannotation> The government allowing private 5G networks – that is, companies like TCS, for instance, can run their own private networks by bidding for the respective category – has also raised the hackles of telcos. COAI, the industry body representing telcos, has asked the government to impose ‘tough conditions’ for allowing private companies to run their own 5G networks. COAI’s director general Dr SP Kochhar <a href="https://www.businessinsider.in/business/telecom/news/interview-the-big-picture-on-5g-big-tech-telco-war-with-coais-dr-sp-kochhar/articleshow/92356710.cms">told</a> Business Insider India that enterprises will likely contribute to 70% of 5G revenue, and if telcos can’t serve Big Tech, then they will have to draw up new business plans. “Relatively high prices and the risk of dilution to telcos’ upside, with DoT approving direct allocation of spectrum to enterprises for deploying private networks, are negatives,” stated a report by IIFL Securities. Essentially, the clients which telcos are trying to bag as 5G consumers, will turn into competitive bidders. <cmsannotation type="cmsannotation" annotationid="Spectrum sharing – sweetener for telcos, sour for the govt" comment="subhead" text="Spectrum sharing – sweetener for telcos, sour for the govt">Spectrum sharing – sweetener for telcos, sour for the govt</cmsannotation> Another reason why 5G spectrum auction could fizzle out is spectrum sharing – according to a report, TRAI is apparently considering allowing telcos to share airwaves. This will solve two problems – first, telcos can monetize spectrum where they have it in excess, or if they need additional spectrum but don’t own it in a given circle, they can lease it from another telco. This should also alleviate liquidity concerns for the telcos involved. Secondly, telcos will also be discouraged from having idle airwaves. “But now with merely three players in the market with only two of them looking for serious investments, and the government's plan to offer spectrum through an annual schedule, there seems limited need to invest at a high price,” said a report by Motilal Oswal. <div type="Article" hostid="261" msid="92382529" title="5G in India – does the aam aadmi even need it?" mstype="2" mssubtype="0"></div> While spectrum sharing exists today, it’s restrictive and requires both the telcos to hold licenses in the same circle and frequency. TRAI is <a href="https://economictimes.indiatimes.com/industry/telecom/telecom-news/trai-looking-at-easing-spectrum-sharing-rules/articleshow/92446321.cms">exploring</a> the removal of these restrictions. However, if this passes, the government may end up realizing even less money from auctions. <cmsannotation type="cmsannotation" annotationid="How telcos could bid for 5G spectrum" comment="subhead" text="How telcos could bid for 5G spectrum">How telcos could bid for 5G spectrum</cmsannotation> Analysts at IIFL Securities believe that telcos could go for only 4 out of 10 bands, with Jio and Airtel topping up their sub-GHz holdings. For now, telcos are likely to focus on the crucial 850MHz and 900MHz frequencies, while the more expensive 600MHz and 700MHz frequencies might not see any action, the report added. The mid-range, where telcos already hold over 670MHz spectrum, might not see any action. Overall, the report concludes that telcos could bid for spectrum worth ₹71,000 crore – considerably lower than the ₹78,000 crore that the government scooped up from 4G spectrum auctions. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[]]></cdata></div> SEE ALSO: <a href="https://www.businessinsider.in/finance/news/rbis-efforts-to-save-rupee-has-made-a-big-dent-in-its-forex-reserves/articleshow/92654557.cms">RBI’s ‘Save the Rupee’ bill has hit over $40 billion already and it could add another $40 billion this year</a> <a href="https://www.businessinsider.in/business/corporates/news/ambani-and-adani-valuations-surge-while-tatas-birlas-see-major-declines-in-the-first-half-of-2022/articleshow/92593235.cms">Ambani and Adani valuations surge while Tatas, Birlas see major declines in the first half of 2022</a> <a href="https://www.businessinsider.in/business/corporates/news/mukesh-ambani-steps-down-as-director-of-reliance-jio-akash-ambani-appointed-chairman/articleshow/92521472.cms">Akash Ambani to head Reliance Jio - that’s just phase I of Mukesh Ambani’s succession plan</a>

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Merger with Reliance would boost company's profits and reduce risk in India: Disney CEO Bob Iger

PTI

Jio Financial Services demerger and listing a ‘key moment’ for Reliance stock

Rounak Jain

Telecom sector to ring in stability in Q2 – Jio and Airtel expected to grow stronger, Vi weaker

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RIL’s fourth capex cycle will unwind with $60 billion value creation, says Morgan Stanley

Katya Naidu

Reliance Jio and Zupee announce strategic partnership, Jio users to get access to games

Rounak Jain

5G spectrum auctions might not see a bidding war as there’s ‘enough’ for everyone

Rounak Jain

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