How Ambani’s Jio became India’s second-largest company

New Delhi, India – This week, Mumbai, India’s financial capital, was the site of a splashy display by Asia’s richest man, Mukesh Ambani, with DJ sets, a drone show and a jam session with popular Indian singers.

The festivities marked India’s largest-ever initial public offering (IPO), as Ambani’s Jio Platforms raised $3.2bn in its stock market debut.

The telecoms-to-digital company’s shares surged by a whopping 21 percent on Wednesday, valuing the company at $131.5bn and making it the country’s second most valuable, only behind its parent, Ambani’s Reliance Industries.

The Ambani family’s Jio Platforms counts global tech giants Meta and Google among its major shareholders, following their multibillion-dollar investments in the company in 2020 – and serves more than 530 million customers.

“Jio may not be visible. But it pulses through every digital dream of India,” said Anant Ambani, the family’s youngest son, who is an additional director on the company’s board, at the celebratory event. “Today, Jio is shared with India.”

So, how did Ambani’s Jio disrupt one of the world’s most competitive telecoms markets – and in the process, help consolidate it into what some observers describe as an oligopoly?

What is Jio, and who is Ambani?

Mukesh Ambani is the richest man in Asia, according to Forbes magazine, with a net worth of $80bn.

In the world’s most populous country – with more than one billion people – some say it is no exaggeration to call India “Ambani’s world”.

Since inheriting Reliance Industries from his father, Mukesh Ambani, 69, has expanded the conglomerate far beyond its textile and petrochemical roots.

From food and clothes to fuel, the internet and streaming, the reach of the Ambani family’s business empire extends into nearly every facet of daily life in India.

In October, United States Secretary of State Marco Rubio travelled to India for a two-day visit, during which he toured the Jamnagar refinery complex in Gujarat, owned by Ambani’s Reliance Industries. Rubio did not visit New Delhi on that trip and officials were angered by suggestions that ministers should travel to see him instead.

How did Jio become India’s largest telecoms operator?

In 2016, while American consumers were paying an average of about $7 per gigabyte of mobile data, Reliance entered the scene in India with Jio, upending one of the biggest telecommunication markets by size, by offering data free for months.

Jio crossed 100 million subscribers in its first 170 days in business, a milestone described at the time as the fastest achieved by a mobile operator globally. Those days were notable for the long queues in front of pop-up tents in Indian cities, giving away SIM cards.

But entry barriers into India’s then diverse telecom market were also high. Jio’s entry required a total investment commitment of nearly $22.48bn in September 2016, spent on spectrum acquisition, network infrastructure and fibre backhaul.

Backed by Reliance’s deep pockets, Jio’s arrival fundamentally changed India’s telecoms market – prepping itself to absorb initial losses in operations in exchange for the prize of accumulating millions of customers.

Competitors were forced to slash their prices sharply, consumption surged and millions of Indians began accessing the internet on their smartphones.

In just three years, Jio had become India’s largest telecom operator by subscriber numbers. In the coming years, Ambani expanded Jio into a digital ecosystem including JioCinema and entertainment for streaming and sporting events, and JioCloud for cloud storage and digital services.

What has been the cost of Jio’s rise?

Since 2016, when Jio was launched, Ambani’s fortune has grown nearly 3.8 times – with increase of approximately $60bn.

Jio’s entry triggered a 42.8 percent decline in India’s average telecom revenues per subscriber, from nearly $1.32 in 2016 to $0.75 in 2019, according to a research paper published in ScienceDirect.

The researchers believe the scale of this price decline was unprecedented and left India with a highly concentrated telecom market.

In the meantime, seven of the 10 incumbent operators exited the market either due to bankruptcy or merger, notably Aircel, Videocon, Telenor India, Tata Teleservices and Reliance Communications.

Reliance Communications, founded by Anil Ambani, Mukesh’s younger brother, suffered severe financial losses and filed for bankruptcy in 2019. The brothers, once joint heirs to their father’s business empire, have had a long and bitter falling-out over the division of the Reliance conglomerate following his death in 2002, with their rivalry playing out for years.

Today, Jio and Airtel have strengthened their positions, while Vodafone Idea continues to face financial difficulties. These three operators control more than 92 percent of India’s telecoms market.

Researchers found that while consumers benefitted from cheap services during the price war, those benefits declined after the market reconsolidated.

In July 2024, Jio introduced price increases of approximately 12 to 25 percent across plans and other telecom operators followed suit, also raising tariffs substantially.

In its IPO disclosures, Jio has noted that further tariff increases may not necessarily translate into higher revenues because consumers could downgrade plans or switch operators.

What will Jio and Ambani do next?

Jio is considering deploying a low-Earth-orbit satellite to deliver internet services from space, a venture that would put it in direct competition with Elon Musk’s Starlink, which has been seeking regulatory approval to enter India for years.

Reliance Group has also invested in the United States. Last month, Ambani took State Secretary Marco Rubio to tour the largest oil refinery at the Jamnagar facility, where both discussed processing more Venezuelan oil.

Musk, the world’s richest man and also a key ally of US President Donald Trump, recently hit out at Ambani.

His Starlink space telecommunications firm has struggled for years to secure a licence to operate in India.

In ⁠a series of X posts, Musk accused Prime Minister Narendra Modi’s government of stalling Starlink’s entry to ⁠favour market leader Ambani’s telecom firm, Jio.

Musk taunted Ambani directly, addressing ‌him as “Prime ‌Minister Ambani” and asking whether he would “consider allowing Starlink to compete”. Starlink, Musk wrote, was being blocked by “oligarchs” protecting their “monopolistic chokehold” on Indians.

In a statement issued on X, Reliance said it has “never feared competition” and has “grown in an India that welcomes investment and innovation, homegrown or international”.