Jio has been attracting many American investors after announcing that it will sell 20% of its shares. Intel’s investment in Jio after Facebook’s $5.7 billion bet on the company is the latest addition of investors.
American companies that have invested in the Indian telecom up until now are General Atlantic, KKR and Silver Lake, in addition to Facebook and Intel.
And this isn’t where it ends. Jio has also invited billions worth of investment from Arab countries as well.
Sovereign Wealth Fund of UAE, Mubadala will invest $1.2 billion while the Public Investment Fund of Saudi Arabia will invest $1.5 billion.
Although the main reason for selling off 20-25% share of Jio is to help the parent company Reliance, Intel’s investment in Jio can help Reliance big time.
Let’s start by knowing about the investment and the opportunities that it brings.
Intel’s investment in Jio
The investment arm of the American chipmaker, Intel Capital is investing $253.5 million in Jio. This will be about Rs. 1894.5 crore for a stake of 0.39%.
With over 388 million subscribers, Jio is the largest 4G network in India. Moreover, it is slowly expanding its services. Jio now also provides music streaming, on-demand live television, a payments app, smartphones and broadband.
Intel’s investment in Jio will have threefold benefits for Reliance- Jio’s own 5G network, Artificial Intelligence and possibly a launch of Jio laptops.
Jio provides a massive database
That’s right. According to Bernstein’s June report, the current 388 million subscribers will reach 609 million by 2025.
The report estimates that Jio is likely to capture almost half of the Indian market by 2025, calling Jio the ‘new king of Indian telecommunications’.
While talking to Business Insider, Counterpoint analyst Tushar Pathak said, “If that happens, it’s a massive amount of data on a particular platform. That is what is exciting these investors, especially someone like Intel Capital.”
Intel has primarily invested in AI focussed companies and database is the very foundation of Artificial Intelligence. As a result, this makes Jio a perfect platform with a huge database.
Intel’s investment in Jio is going to be of a great benefit for the telecom. Neil Shah, a technology research analyst talked about the benefits of this investment.
He tweeted that Intel’s investment will ensure that the 5G network of India has healthy share of Intel solutions.
5G, AI and Jio laptops
Reliance said in a statement, “Intel Capital invests globally in innovative companies with a focus on disruptive technology areas like cloud computing, artificial intelligence and 5G – opportunities where Jio is also innovating and investing for growth.”
Jio will have 500 million users and as a result, a huge database. Therefore, AI will play a huge role for the telecom and Intel can offer a lot here.
The next thing that comes if the 5G. Intel has the technology to help Jio establish its own 5G network in-house and therefore, Intel can help realise this 5G dream.
A Jio executive said, “Intel has advanced Edge computing offerings across processor, analytics, AI and the access to this technology can help Jio Platforms engineering teams make significant pace with their 5G technology and IoT ecosystem rollouts.”
And next comes Jio laptops. Jio entered the electronics business by launching its mobile phones and now the dream of Jio laptop can also come true.
As per a Greyhound research report, “Intel can help Jio launch computing devices (Laptops and Tablets) and accessories like cameras.”