Don't blame Jio for industry's losses: Mukesh Ambani to Sunil Mittal

NEW DELHI: Reliance Industries chairman Mukesh Ambani responded to comments by Bharti Airtel chairman Sunil Mittal blaming Reliance Jio Infocomm for the telecom industry’s woes by saying “there’s no need to cry so much” and that businessmen should be ready to take setbacks in their stride.

“If there are some losses that you take, then we're all big boys-—we shouldn't be crying,” Ambani told ET in New Delhi Friday “This country has given us a lot more, all of us have started with nothing.”

Mittal’s comments had been made to this paper earlier in the week. Reliance Industries is the parent of Jio, which launched commercial operations in September 2016 with free voice and data services, hitting the revenue and profit of older carriers Bharti Airtel, Vodafone India and Idea Cellular as they were forced to slash tariffs to retain users. Jio has since started charging for data, albeit at ultra-low rates, while voice is free for life.
“We all get into business and we take a risk in terms of putting capital,” Ambani said. “Profit or loss is not guaranteed, that depends on the consumer and depends on the product. That's a risk that business people take.” Ambani was speaking to ET after calling on telecom secretary Aruna Sundararajan.

In his interview to ET, Mittal held the free offers of Jio largely responsible for telecom companies writing off investments of up to $50 billion. The chairman of India’s largest telco also said the new entrant was opposing a relief package for the debt-laden sector. Jio, which reported its first results mid-October, surprised markets by posting a net loss of just Rs 270.59 crore for the quarter ended September on revenue of Rs 6,147 crore, with positive earnings before interest and tax (ebit), helped by strong user additions and cost efficiencies. Some analysts expect Jio to post a profit at the net level as early as the fiscal third quarter ending December 31.

RIL’s stock, which closed 1.4% lower at Rs 909.85 on the BSE Friday, has jumped nearly 14% in the past two months. It had touched a 52-week high of Rs 959 on November 24.

Ambani had called Mittal a “friend” and not a “rival” earlier in the day at the Hindustan Times Leadership Summit. On Jio’s results, he said that the company was ahead of its schedule in breaking even.

“I don't want to predict, but I think we are ahead of our schedule in terms of the returns that we are generating. Jio results are declared every quarter now. You can see the trend. You watch the next few quarters. You will learn in January and you will learn in March,” he said, while replying to a question on when the telecom venture will break even.

Ambani said at the summit that India had been catapulted to the world’s No.1 mobile broadband market after Jio’s entry, consuming more data than users in the US and China.