Talk of business cycles. There are companies today writing off a full quarter and there are companies reporting record profits.
Indian telco Reliance Jio reported 3X growth in its profits last week. While other telcos will likely report good numbers too, Jio is an anomaly. In more ways than one.
For its $46 billion 4G network, it chiefly relied on one vendor—Samsung. For 5G, it’s going all out for open source. What looked like a scrappy DIY project a few years ago has now emerged as a full-blown strategy for not just building a 5G network on its own terms—free from vendor lock-ins—but also for selling to the rest of the world.
This puts in context what Reliance chairman Mukesh Ambani told the US President Trump in a CEO roundtable in February—“We’re the only network in the world which doesn’t have a single Chinese component.”
Locking out large network gear vendors is a new imperative as well as a movement. And one of the telecom executives leading it globally is Tariq Amen, CTO of Japan’s newest mobile operator Rakuten. Amen, the Jordanian expat who headed Jio’s networks team until 2018, had set the ball rolling. Under him, Jio acquired US software company Radisys and invested in a few other startups. It hired over 150 IIT graduates, built networking equipment, and ran prototypes in Jio’s campus.
Coincidently, the same year Jio began its equipment push, Trai, India’s telecom regulator, came up with a set of recommendations on ‘promoting local telecom manufacturing’.
Trai redefined Make in India, adding a new category—design in India, manufacture abroad. This would mean that Jio’s plans would still qualify for incentives under the Make in India scheme.
In Jio’s estimate, this focused drift of strategy would reduce its capex by half, and its network update turnaround by 75%. Two competitive groups (and power centres) are finally converging within Jio to reach one goal by December.
Pratap has a cracker of a story today, with small details woven through large implications. Read it here:
https://the-ken.com/story/reliance-jios-5g-push-to-be-indias-answer-to-huawei/ (12-minute story)
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