Scatmag.com

July 2019

JIO CURBS SPENDING


The JIO Juggernaut Finally Running Out Of Funds?

Is JIO finally running tight on funds? For years, parent company Reliance Industries Ltd has been pumping almost unlimited funding into its JIO telecom arm.

With the AGM coming up, investors are querying about returns on the huge investments in JIO.

Press reports are that acquisition of original web series and films, has been stalled. Management approval for many proposals is pending till funds are infused into the main business.

"While the content teams and Reliance Studio have shortlisted many concepts and projects, none has been greenlighted by the management yet," said a top company executive. "We only hear that it is under the management's consideration," according to these press reports.


REFUTED BY JIO

In response to the press reports, JIO issued its statement "Jio reiterates its commitment towards curating, developing and commissioning the best of content in order to enrich the digital life of every Indian and has been taking regular steps that showcase its commitment," a Jio spokesperson said. "Any suggestions to the contrary are mere falsehoods and a figment of the imagination of vested interests and should not be given any credence."



OTT CONTENT IMPORTANT

India's OTT market is heating up. There are 32 OTT platforms, but 67% of OTT users typically opt for free content only.

Hotstar, Amazon Video, Sony liv & Zee5 are pouring investments in creating original shows locally.

Ironically, JIO facilitated the Indian OTT boom by dropping bandwidth prices on mobile phones by more than 90%, enabling all OTT players to establish themselves. OTT is primarily consumed on mobile phones.


NEW FUNDING

Japan's SoftBank is said to be considering a $2-3 billion investment in Jio as owner Mukesh Ambani looks to deleverage business by selling stakes in the telco. After the demerger of its tower and fibre operations into two units, Jio's net debt stood at ₹ 67,000 crore as of March 31, 2019. n