Reliance Industries (RIL) today said its 4G LTE services will get a boost after infusing Rs 4,000 crore investment in Network 18 Media for a controlling stake.
RIL’s Reliance Jio Infocomm, which has the 4G LTE and 2G licenses, will look at offering telecom, web and digital commerce through the investment. However, RIL is yet to officially announce its 4G launch date due to several issues. It had received the BWA spectrum in 2010 and invested around $3 billion including licenses.
The Mukesh Ambani-promoted Reliance Jio Infocomm will utilize Network 18 Media’s digital properties such as In, IBNLive, Moneycontrol, Firstpost, Cricketnext, Homeshop18, Bookmyshow and the broadcast channels include Colors, CNN IBN, CNBC TV18, IBN7, CNBC Awaaz to boost its 4G content and reach.
In addition, Reliance Jio can easily step up its online commerce presence through Homeshop18 and some of the media properties of Network 18 Media.
Recently, AT&T announced its plans to acquire DirecTV in a deal valued at $48.5 billion. Online video reach is expected to boost the financials of AT&T in the U.S. and Latin America.
In yet another development, where content gained focus, Apple today announced its decision to acquire music streaming company Beats for $3 billion.
All these three deals indicate that telecoms need to focus on online video and mobile content to gain market share in the near saturated markets.
RIL today said RIL will fund up to Rs 4,000 crore in Independent Media Trust (IMT) in order to invest in Network 18 Media & Investments (NW18) including its subsidiary TV18 Broadcast (TV18). IMT will have about 78 percent stake in NW18 and 9 percent in TV18.
However, industry analysts are questioning about the lack of preparedness of Reliance Jio Infocomm to rival established players such as Bharti Airtel, Vodafone, Idea Cellular, etc.
Also, there are question marks about dwindling 3G growth despite offering several cinema, cricket and life style based content to mobile phone users. Can 4G of Reliance Jio Infocomm be different from 3G or high speed broadband of its rivals – if 4G access is not seamless and fast enough? The main challenge is to bring 4G data and voice on a cost effective smartphone.
A strong Wi-Fi hotspot market can be attractive for Reliance Jio. A growing economy under the Narendra Modi-led BJP government will create more hopes for Indian broadband users.