Amid strong competition in the Indian telecom market, Reliance Jio is said to be eyeing an expansion into the overseas market. This expansion, according to Livemint, will begin with setting up a unit in Estonia.
As per the report, the Mukesh Ambani-led company will set up the unit in Estonia with a loan of Rs 12.20 crore from Reliance Industrial Investments and Holdings Ltd. Setting up a business in Estonia will give Jio a foothold in the European Union.
Setting up a unit in Estonia isn’t said to be very difficult since all the compliance work and agreements can be handled digitally. Since the beginning of 2000, 99 percent of government and public services in Estonia are available online. This report comes at a time when the Northern European Baltic nation is keen on helping India leverage technology to deliver citizens with digital services, as well as assist on cyber security.
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The report about these expansion plans comes amid intense competition between Reliance Jio and incumbent telecom players in India. While the latest entrant continues to set new standards in the space, it has had to deal with increasing pressure from rivals. Jio’s subscriber base is nearing the 200 million mark, and it recently recorded annual maiden profit of Rs 723 crore for the fiscal year 2017-18. But its Average Revenue Per User (ARPU) slipped to Rs 137.1 per month during Q4 2017.
In such a scenario, it makes sense for Jio to look at overseas markets for better margins. The publication quotes Mahesh Uppal, director at communications consulting firm ComFirst India as saying, “Reliance Jio would want to diversify because, like its competitors, it too is under great pressure in the Indian market. There is every reason to believe that the company may be running operations below cost.”