Mukesh Ambani, chairman of Reliance Industries, said he would invest an enormous INR700 billion ($11.6 billion) in Reliance Jio Infocomm, the group’s mobile division, and start 4G services next year.
Speaking at the company’s AGM, and reported by India’s Economic Times, Ambani said limited field trials for Jio’s 4G services were already under way. Expanded field trials are scheduled to begin in August and finish in early 2015.
Ambani has high hopes for India’s mobile market and has not been afraid to splash out.
Reliance Industries recently agreed to buy a majority stake in Indian content provider Network 18 Media & Investments for up to INR40 billion ($678 million), signalling its intent to beef up its 4G offering.
It was also one of the big winners in the country’s spectrum auction this year, shelling out $1.7 billion to get hold of wireless frequencies across the country, including Delhi, Kolkata and Mumbai.
Last year, Ambani signed a INR120 billion tower-sharing agreement with Reliance Communications (RCom) – controlled by younger brother Anil Ambani – to roll out a nationwide 4G network.
Some see Ambani’s aggressive push into telecoms as a huge gamble.
“They are spending huge amounts of money, and unless they win substantial market share in our already-crowded voice and data markets, this business is just not going to earn the kind of return that investors would expect,” says Sanjeev Prasad, head of research at broker Kotak Institutional Equities in Mumbai, quoted by the Financial Times.