This is just the beginning for Reliance Jio , says Reliance Industries chairman Mukesh Ambani This is a multi-wave game where the company will have the opportunity to delight customers with digital life periodically, he tells Romit Guha and R Sriram.He is astounded by the response to Jio’s launch, and says the company has a business model that ensures sufficient returns even as it provides data at one-tenth of the world price. Edited excerpts:I am personally a big believer that technology is the biggest driver of human development and if you can use technology to benefit people, then that’s the best business you can have.Mobile internet will be the single-most defining technology of this century for human development. We feel fortunate to be the ones to bring the mobile broadband revolution to 1.2 billion Indians.What we wanted to do was set our own path. What we have decided to do has not been attempted in the whole world.We have built an all-IP, only-LTE, 100 per cent VoLTE (voice over LTE) network ground up for the Internet.We worked with all the device manufacturers to bring down device prices. Three-four years back, people said 4G phones would cost Rs 30,000. Now, we have provided an entry-level price point with our JioFi device at just Rs 1,999 and with our popular LYF brand of smartphones at just Rs 2,999.Building that ecosystem takes time and patience. The whole content ecosystem that we have put in place also takes time. The most important consideration was that all of this had to work synergistically together.We had to actively test all this. We have chosen to be at the bleeding edge of technology. Only then would we be able to pass on the fullest benefits to Indian customers.Today, everybody in the world sells data at $10/GB. That rate, with purchasing power parity, just doesn’t make sense. So, we have brought it down to under one USD. We had to go through this process.The world did not believe us when we started, but we went with our convictions. We have tried very sincerely. I am quite satisfied with what they have delivered. Fundamentally, if you are doing something very different, you should allow it to take its time.We had what I call target deadlines, but we did not want to meet a deadline just for the sake of meeting one. What we were looking for were outcomes.For instance, we wanted to augment our spectrum with 850 MHz, to improve indoor coverage. We got this spectrum only in July. We still have to improve the on-boarding process.We are bringing in the Aadhaar-based digital process to ensure that we bring in our customers in a much more painless, paperless way. Likewise, if we don’t like something in our convergent billing, we will change that.We have continuously reassessed our deadlines because we have tried our best to always put the customer first.I spent quite a bit of my time with Jio. You can say that I was very hands-on. We have built an ecosystem, starting with just a few of us, growing to about 60,000 people.There were just a core group of about 50 of us that worked on this for the first few years. Then, we brought in the other professionals. All of us had no choice but to be hands-on.Our established businesses of hydrocarbons, energy and petrochemicals pretty much run on their own, with their own proven leaders. This has helped me focus almost exclusively on two things: Firstly, new businesses. And secondly, institutionalising what I call the Reliance Management System. In the last three years, we have quietly put together the Reliance management system and we have rejuvenated our leadership cadre.Across the Reliance group now, we have identified leaders in the mid- 40s, and you will see them take more prominent leadership responsibilities. In terms of new businesses, Jio and Jamnagar require my time, since they are new projects.Well, the first element is our philosophy of value creation. As Reliance, we will first focus on what societal value we create.After societal value, we will focus on creating customer value, followed by employee value and, finally, sustainable shareholder value.Within this framework, we have broken them into sub-components. We have financial management system, which define how we deal with all the finance and regulatory pieces.We have a people management system, which defines all components starting from the entry-level to our group-level leaders to the executive committee and how do we bring all of them together.We have an operations managementsystem. Operationally, we have digitised our whole business. And, we have a set of corporate standards and behaviours, which, to my mind, institutionalises the Dhirubhai philosophy in our management systems.His philosophy is timeless. Now, we feel comfortable that the process and the institution of Reliance will last beyond us. Jio is born with these managing systems already in place.What does a startup do? You start with the objective of solving a big problem. For us, the big problem was a societal problem facing India.If we accept that mobile internet is the technology of the century, we as Indians cannot accept that we are languishing at 155th in the world in terms of mobile broadband access.It is the same feeling as when we, as a country of 1.2 billion people, win just a handful of medals at the Olympics. Neither is befitting the potential of a country of 1.2 billion people.I think that’s what startups do — solve what nobody else has solved before. What we do as a startup is to make a sincere attempt. If the attempt is successful, the startup becomes a great company.There are many waves of digital life. We think what we have started with Jio is just the beginning. This is a multi-wave game where we will have the opportunity to delight customers with digital life, virtually every few quarters.We have the potential to give something magical that dramatically improves customers’ lives. The first thing we have done, and we are very proud of it, is that we are able to offer all this in an affordable way to every Indian.Now, let’s see how quickly the customers respond. I am absolutely astounded — and I am an optimist by nature — by the response of the first three days (of the launch of Jio).It has exceeded my expectations by a factor of 100. This initial response suggests that Indians want to experience and own the mobile internet. We have made it affordable.We have a business model whereby, while making sufficient returns for ourselves, we can still provide data at one-tenth of the world price in a sustainable way. This can only be done if you think of technology from scratch.I can assure you that we are not going to lose money. We are not looking to make a killing, but we are looking to make a high-teens return on our capital, which is 18-19 per cent return on our capital, over the investment period.To set the broader context, I will finish my 40th year with Reliance next year. We are among a handful of companies in the world that have delivered a compounded annual growth rate of shareholders returns in excess of 20 per cent over a 40-year period!If you look at the history of Reliance, we have had periods of investment and periods of steady cash flow after that. I think most of our serious investors understand this.Over the last four or five years, we have invested about `2,50,000 crore and we will now see the returns. As I said in my AGM, we are really proud of our track record of shareholder value creation.Of course, with these returns coming in, we will only enhance these numbers.That depends on the Indian customer, how hungry they are. It also depends on how customer-obsessed we are. We will try our best.We have said that by March 2017, 90 per cent of Indians will have access to our service. So, we will cover a billion Indians. We are also trying our very best to build a capacity of on-boarding a million customers a day.The paperbased acquisition process is a bottleneck. We have not yet reached our target of a million acquisitions a day in a painless way.I recognise that and I have said that it is not acceptable to me. We have started rolling out Aadhaar-based acquisition process in Mumbai and Delhi and, by early October, we will have this across the country.That should substantially ease up the on-boarding process.We will report this number transparently every month. I am pushing our guys hard to make it even more frequent.It depends on the customer. I expect MNP to be fully available and the current bottlenecks will be resolved in a matter of days.We are all mature players in this market, and I am sure current operators will do what’s right and provide customers the choice to select an operator of their choice.Just watch! The good thing in this is that we are playing the second innings, so we know the target we have to achieve. This is a continuously evolving market, and we will strive to delight our customers every day.I was talking about competition. I really think that within the overall piece, this is a big enough market for everybody to follow their own business models and for four or five operators to coexist.I have utmost regard and appreciation for the likes of Airtel, Vodafone, Idea, etc, who have taken mobile telephony across the country. But the critical nonnegotiable in this environment is that all of us need to put the customer first.Within that framework, some of the internal competition we have among ourselves is OK. But if we do it by not caring for the customer, or if we are violating our own legal licence conditions, then it’s not OK.When each of us bid for spectrum and sign a licence, we have obligations to our fellow operators, to the government of India and, above all, to our customers. You are mandated to provide interconnect so that you do not abuse your market position.You are supposed to augment interconnect when the current capacity utilisation reaches 70 per cent. You cannot use excuses that someone is doing promotions, capacity requirement has gone up, etc.Those are not acceptable. They are anti-customer practices. Consumers should not suffer. I am very happy to take the ragging onto myself, but this is not ragging me. This is ragging the customer.The second issue is also pretty straightforward. Mobile number portability. The number belongs to you. No operator can cause trouble if you want to change operators.All operators have publicly said last week that they will provide this (interconnect and MNP). So, we are waiting. These are all great companies. They have their own reputations to protect. I am confident they won’t violate the law.Frankly, it’s their business. Each one of them has multiple decades of experience. I have a lot of respect for them and the business models they follow.That’s for the customers to decide. What I will work towards is that COAI (Cellular Operators Association of India) functions in a democratic and pro-consumer manner.I didn’t realise until just a few months ago that while it’s an association, the voting rights of the members depend on the revenue of the operators. We have zero revenue, so we are crowded out. Then what happens is that the official or the CEO of the association becomes an employee of the top two or three operators, in essence.If the top two operators control more than 51 per cent, it’s an inherent flaw in its structure. While it is the COAI, its view is actually the view of one or two operators and not the view of the entire industry.We have aspirations of getting substantial revenue. When we get substantial revenue, we will not misuse our revenue power. That I can guarantee you.I have the highest respect for Sunil and know Kumar extremely well. And Vittorio from Vodafone also. From our point of view, we have been consistent and all of us have agreed that this is a big opportunity.Fundamentally, our business models are different, business approaches are different. We should respect different paths to value creation. I am good friends with all of them and I am aiming to remain so in spite of the competition.There is no one right or wrong. At the end of the day, surely, there will be 2G voice and there will be 3G voice and data, 4G voice and data and there will be digital services. It’s for the customers to have a large choice.I am inspired by many things that our peers do. They would be inspired in some way by what we do. We have to co-exist — this is a big enough market and no one operator can take it all.I see sustainability for at least 4-5 operators in this market of 1.2 billion Indians. From our point of view, 100 million is a single -digit market share that we are aiming for. So we are still babies in this business.What we look for is a healthy high-teens return over the business life cycle.The timing of this depends on how quickly we are able to ramp up and fill in our capacity. It also depends on how customer-obsessed we are, and how quickly customers adopt our services. As usual, we will surprise you.Jio is a subsidiary of Reliance. It is as good as a public company.We are amazed at the response that we have seen in the last few days. We are extremely encouraged by that. We are single-mindedly focused on creating societal value, customer value, employee value and, finally, shareholder value.Our balance sheet is very strong, so we don’t see any reason to play around with the corporate structure for now.We are always open to it, but there has to be value addition by partners. And they have to be aligned with what we want to do. We don’t need money from anybody, so we will not be partnering for that purpose alone.We think that we are very fortunate to have a prime minister who has given us a vision of digital India . We also think that some of the work that is now being done is a first in the world. So, we should all be very proud that Aadhaar is continued and strengthened.I believe that Aadhaar is going to differentiate India and make India win in a digital world. I am extremely impressed with a lot of chief ministers who now want to adopt digital.Businesses have no choice and are adopting digital in a much, much faster way. So, from that point of view, that one binding vision of digital India is critical. I think for separate industry segments what we have now is a pretty transparent framework in terms of spectrum auctions, transparent framework in regulation. We just need to change our habits.We don’t need to lobby governments or bureaucrats. Work in the marketplace and inspire each other, that’s the transition we need to make.All the regulatory framework I believe should always be for customers first, because, in the end, you and I both are customers.I also think that over time we will realise that apart from paying for spectrum, this is the most taxed service in India. You pay as much as liquor or other sin categories. This should also be rationalised.Frankly, we are neutral on this. But, philosophically, we need to put consumer first. We should always yield to consumer interest, and do what is best for the consumer.Frankly, we are not chasing labels like No. 1, No. 2. We are chasing the material impact we can make to the lives of our customers. And, in our consumer business, what we really have to do is to keep the customer first, see if we can solve their problems.In 2010-11, we had two options. One, we could have done what most, including The Economic Times, expected us to do. And that was to make a big acquisition in the global markets.But we followed the second path. It was my conviction that if at all I am going to risk a few billion dollars, it’s better I risk it in our own country, for our own people, solving some of their most difficult problems.So, that’s a conscious choice that we made. It would have been much easier for us to say that let’s make our energy and petrochemicals business bigger. These businesses would have become bigger and the numbers would have been bigger.But the outcome for India would not have been there. And the business risk for Reliance would still have been the same. When we started the capital cycle in 2010-11, contrary to most other Indian business houses, we put 100 per cent of our money in India. And we think that this will yield us attractive returns.For me, yes, my dreams were, are and will continue to be for India. We are an Indian company and we must be for India and Indians first.We are happy and proud that as an Indian company, we have innovated to a degree where I think that we have now won, at least in my technical peer group, the respect of the world.It’s taken us five years, but it was worth it. So, if I talk to technology company leaders across the world, they now recognise that we can create such a mammoth tech venture in India.They never thought we could really create a next-generation digital network out of scratch in India and give data at under a dollar a GB — absolutely the lowest in the world.I don’t think you can create all of this on your own. It takes two to tango. You can do what is in your hands. But, customers have to respond. We are in a world where nothing happens without connectivity.So, if the world uses 15 GB of data, every Indian should be able to use 15 to 20 GB of data. We have to eventually build an ecosystem, but connectivity will be the longest pole in that tent.Once you put together connectivity, the power of computing, the information that comes from you and me, and software, the price performance of everything changes. That is when you are creating disruption.We are not trying to be a Comcast or a Netflix or anybody else. We want to be Jio and provide digital life to Indians. You have to start this journey with affordable connectivity if you want to move higher from our current 155th position in the world in terms of broadband penetration.There is only one Dhirubhai. I am a very small part of Dhirubhai. For us, his spirit is timeless.It will continue to inspire and guide Reliance beyond me. He had given me a mandate and it is very satisfying to fulfil it. He had told me that the process of Reliance should last beyond you and me.I have seen the journey from when we raised Rs 1.8 crore to today when we can afford to spend Rs 2,50,000 crore on our energy and digital businesses and still have one of the strongest balance sheets in the world. That satisfies me. Reliance will always be Dhirubhai’s Reliance.Yes, of course, I still do that. Even the 40-year-olds at Reliance, who may not have worked closely with Dhirubhai, also do that since we have institutionalised his principles.One day, we need to put this out for the whole world since his principles are timeless. It’s on my to-do list.Isha has decided that she will move to Stanford this Fall to do her MBA.Akash is passionately customerobsessed with technology. He has taken the challenge of delivering the true customer experience in a hands-on way. He will decide what he wants to do from there on.Jio is a multi-wave business. What you can build on top of Jio Digital Life is virtually unlimited: IoT, augmented reality, virtual reality, driverless cars. On driverless cars, hamare naseeb me hai ki gaadi me petrol bhi daalna hai or bandwidth bhi dena hai.My own view is that all businesses will have to become digital businesses in a digitised world.Digital has to become second nature, and that’s what’s happening globally.In the next 20 years, the world will change more than in the last 300 years. I’m sure we are on the doorsteps of such a momentous change.Absolutely. This is the starting point. Abhi to shuruat hai.I think our first milestone is really to establish Jio Digital Life and to make sure that mobile internet is properly understood.Then, of course, to fill the capacity that we have built. That’s why we’re deliberately not giving ourselves a time frame. But we are saying that, yes, we are attempting to build a 100-million customer base in the shortest possible time. So, our first milestone is to reach a point where Indians can say: ‘yeh Jio ke bina main jee nahi sakta’.Reaching this will be a testament to the 60,000-strong team at Jio.India is the fastest-growing economy in the world.Overall, you have to think of this in the background of what I call radical changes in the world. So, the global economy itself — globalisation, automation, digitsation — is hugely undergoing a change and, within that, we’re outshining everyone.The prime minister’s visionary initiatives like Digital India, Make in India, Startup India, etc, have energised the nation. And, I see this only improving, with a good monsoon, with all the GST reforms we have done in the last session, the world cannot ignore India.Frankly, this is a baseless controversy. Shri Narendra Modi is the country’s prime minister. He’s as much your prime minister as he is my prime minister.He has given the Digital India vision, which I am personally inspired by.As I mentioned in my AGM speech, we are dedicating our service to the vision of India’s leader, to India and 1.2 billion Indians. Digital India is a life-changing movement, there’s nothing political about this.I’m happy that we’ve overcome all our past issues at the family level. In this respect, we’re in a very cordial place.In terms of business, we’re separate.Fundamentally, we remain open to working with all the players in the industry. We are working with RCOM in a number of mutually beneficial areas, as we are with Bharti, Vodafone and Idea.I don’t see Jio as a telecom business. I see it as an Internet business that also provides connectivity.We have used technology in very innovative ways. The whole aspect of digital life first starts with connectivity.The world today has great broadband connectivity at home. Eighty per cent of the bandwidth usage in the world is in the home, 20% is on handheld devices. We in India are starting the other way around.Clearly, you have to have connectivity via mobile broadband. Taking finance, the first piece that needs to be solved is payments. Then, you need to solve for transaction costs.Then you have to integrate and ensure regulatory compliance and make sure 100 per cent credit ratings are available for individuals and small companies as well. So, from our point of view, the way the world is evolving, no one company can actually solve all the problems.You will need a coalition to deliver the financial digital life. You do the same thing for education and you can transform education. You do the same thing for health, agriculture and you transform them.Digital life and digital services are a multi-wave business.It’s not a single component business. We are not announcing all of the possibilities on day one. We are working on multiple innovative ideas and we will partner and do things globally in these areas.From our point of view, connectivity is the beginning and as you bring more and more digital life to more people and as you combine the physical with the digital, the opportunities become immense.That’s why we have said we can’t do this all on our own. That’s why we want a sustainable source of venture capital in this country. We have now said that we will provide that.So this is pure venture capital — it’s for promoting entrepreneurs on their own merits to own their own businesses that can ride on this connectivity. We have got to work on many things, and you don’t know what will happen at what point in time. But you got to keep on trying to innovate in new directions.Reliance has built a refinery-led energy business and a materials business. In the energy business, we give 2% of the world’s petrol, diesel and aviation fuel. For that, we need some backward integration into oil and gas.I myself believe that technological advancement is so rapid that renewable forms of energy in the next 20-30 years will replace nearly all fossil fuels. Then we have the materials business.We are the world’s largest polyester manufacturer. We still think that clothing people will be important. We don’t see that being disrupted. We think that plastics will move to being much more environmental-friendly.We are working on that ourselves to ensure 100 per cent recycling of plastics. Materials and plastics will continue to have a very important role in people’s lives. And rubber is the other basic big business that we have. Synthetic rubber will coexist with natural rubber.Carbon nano-tubes will be among a whole new set of potential materials that we would like to focus on.Equally, new materials in the energy storage area.For us, we will still be a materials and energy company but focused on new opportunities alongside existing ones. We have converted a cyclical business into a value-generating sustainable business, so that irrespective of the different business cycles, this portfolio gives us a sensible annuity.Oil prices have gone down from $100 to $40, but the Reliance earnings has not changed. Besides the materials and energy business, we have the consumer business. I believe that all consumption will happen both physically and digitally. Jio is the bedrock of our consumer value proposition.