The government of Rajasthan, India’s seventh-largest state by population, is set to present its budget for the year ending March 2024 in February. And executives at India’s top telco, Reliance Jio Infocomm—which saw a modest 1.2% growth in its subscriber base in the three months ended December—have reason to be eager.
In focus is an ambitious project targeting ~13.3 million women and their families.
In the 2022-23 budget, Chief Minister Ashok Gehlot announced a populist scheme of handing out smartphones and free data as part of his Mukhyamantri Digital Seva Yojana. By mid 2022, the state—which goes to polls later this year—started receiving bids from Jio as well as other telcos such as Bharti Airtel and the state-owned BSNL.
The tender document qualified only telecom companies to bid for the contract, but Jio and Airtel’s cash-strapped rival Vodafone Idea stayed put. Jio submitted its bid alongside original equipment manufacturers (OEMs) Samsung and Nokia. More importantly, an upgraded version of the JioPhone Next—which didn’t see great success otherwise—was also a part of the proposal, said officials associated with the scheme.
Bharti, too, partnered with Samsung. It’s unclear whether BSNL also had an OEM partner.
The telecom arm of Reliance Industries, led by billionaire Mukesh Ambani, emerged as the lowest bidder, effectively paving the way for the company to pocket 60% of the overall contract value of ~US$1.5 billion. Bharti Airtel, Jio’s closest competitor, got the rest.
According to some reports reports The New Indian Express Gehlot outreach: 1.35 crore women to get smartphones Read more in November 2022, the supply of devices was to begin in mid-December. But there has been a significant delay. While some recent reports stated that the project has been shelved, an official close to Rajcomp Info Services—the IT consulting organisation responsible for implementing the scheme—said that the government would clarify the project’s status in the budget document on 8 February.
“The state government expected the cost to be less than the lowest bid. It didn’t make provision to the tune of Rs 12,000 crore (~US$1.5 billion) for this project,” said a top industry executive. In contrast, the state government spent Rs 12,000-13,000 crore (US$1.5-1.6 billion) each on health and rural development in 2021-22.
Neither Jio nor Rajasthan government responded to The Ken’s queries by the time of publishing. Also, officials and industry executives quoted in the story didn’t want to be named because they weren’t authorised to speak with the media.
If the deal comes through, it will be a much-needed win for Jio. After all, Jio’s revenue market share in Rajasthan circle in the quarter ended September saw a dip from the same quarter in 2021, while Bharti’s share increased during the same period.
