MUMBAI: Reliance Industries Ltd (RIL), according to a Mint report, is likely to invest Rs 60,000 crore in Reliance Jio Infocomm Ltd (Reliance Jio), its telecom unit, this financial year as the company seeks to speed up the roll out of broadband services and expand its wireless network.
Moreover, Reliance Jio may also borrow as much as Rs 1 trillion, the report quoted sources as saying.
The fresh investments will also allow Reliance Jio to maintain pricing pressure on rivals, who are bleeding due to a tariff war sparked by the Mukesh Ambani-led company. The firm has also said it remains focused on providing higher value to consumers and will prioritise customer engagement over short-term revenue recovery, which means it will retaliate if rival operators try to sweeten their offers.
Spokespeople for RIL and Reliance Jio did not respond to queries.
The company will continue to invest in laying fibre even as it has already built the largest optical fibre network in the country, Jio’s head of strategy and planning Anshuman Thakur said in an interview on 27 April after RIL announced its earnings.
Reliance Jio will also continue to invest aggressively to acquire content as it sees it as a key differentiator. The company is in final stage of commercial launch of home broadband services, though the rollout is expected to be gradual.
For the March quarter, Jio reported a 1 per cent growth in profit from the preceding three months. It also saw its average revenue per user fall to Rs 137 in the March quarter from Rs 154 in the preceding December quarter.
“Clearly, Q4FY18 numbers demonstrate that RJio is no longer insulated from competition and any rise in the same would hurt RJio equally or probably more than the incumbents,” ICICI Securities said in a 30 April report.
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