Market Insight

Reliance Group unveils Indian IoT venture UNLIMIT

November 29, 2016  | Subscribers Only


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Reliance Group has reached a strategic partnership with Cisco Jasper to support a new venture, UNLIMIT, which will be dedicated to offering Internet of Things (IoT) services to enterprises across India.

Reliance Group has reached a strategic partnership with Cisco Jasper to support a new venture, UNLIMIT, which will be dedicated to offering Internet of Things (IoT) services to enterprises across India.

ULIIMIT will be an independent unit within the Reliance Group and is positioning itself as the IoT gateway to India. Its’ exclusive rights to the Cisco Jasper connectivity management platform (in India) and access to Reliance Communications’ mobile network form the basis of its UNLIMITControlCenter, which it pitches as its end-to-end offering to enterprises. Reliance Group also expects its business assets spanning  power, financial services, infrastructure, media and entertainment and healthcare to both benefit from and enrichen UNLIMIT’s services.

In a briefing with IHS Markit, Reliance Group’s IoT executives identified several initial targets for UNLIMIT:

  • Foreign corporates expanding in India that are already using the Cisco Jasper platform in their traditional geographical markets;
     
  • Domestic enterprises: particularly those with international ambitions;
     
  • Smart cities, including different verticals such as energy and resource efficiency (e.g. electricity and sewage);
     
  • Manufacturing sectors such as automotive.

Reliance Group is seeking to foster innovation around IoT through a number of initiatives, such as funding and proof of concept and mentoring support to start-ups and the development of a smart cities project in the Bandra-Kurla Complex (BKC). Some 600,000 people currently work across various offices in BKC, a commercial hub in south Mumbai. Reliance Group has the vision of transforming BKC from a commercial hub into a financial and business hub through the implementation of various technologies and intelligent services such as smart parking, smart street lighting, building monitoring, CCTV camera surveillance and electric hybrid buses.      

Our analysis

By establishing UNLIMIT as a dedicated Internet of Things unit, independent of the telecoms operator, Reliance Communications, Reliance Group is seeking to engender a nimble, start-up-like approach to developing an IoT business.

Nevertheless, UNLIMIT will benefit from various deals Reliance Group has made to enhance Reliance Communications’ spectrum holdings. Mergers with competitors SSTL and Aircel and a spectrum sharing deal with Reliance Jio (part of the Reliance Industries group) will give Reliance Communications’ pan-Indian spectrum in the 800-850MHz bands as well as improved 1.8GHz and 2.1GHz holdings.

The former sub-1GHz spectrum will power UNLIMIT’s ability to provide connectivity within buildings and across more expansive, remote areas. While Reliance Communications has much improved LTE spectrum holdings, in the very short term it has no plans to deploy NB-IoT, which can connect devices that typically generate limited amounts of data, such as meters, more efficiently and at lower cost than standard LTE.

Its decision not to rush into NB-IoT deployment will be based on several factors, such as its advantage over all of its established operators in owning pan-Indian LTE spectrum; the effort ahead in integrating  acquired assets and systems from SSTL and Aircel; the need to expand basic LTE coverage and the gradual development of the smart city opportunity. The national government has an ambitious plan to develop 100 smart cities across India, but the process of selecting cities and for each winning city, deciding on projects and business models, establishing special purpose vehicles (SPVs), securing funding and sourcing suppliers will be a lengthy and complex one.

Reliance Group can leverage many assets, such as its mobile network, cloud platform, operations across several vertical markets, expertise in the Indian market and exclusive access to the Cisco Jasper platform, to develop its’ UNLIMIT business. The Cisco Jasper will be particularly beneficial to UNLIMIT as it already has significant scale among mobile operators (30 groups with 120 networks) and companies (over 6,500) and integrates a broad range of features such as monitoring and diagnostics and security as well as connectivity and device management.

Leveraging the Cisco Jasper IoT platform is a logical first step for UNLIMIT, given that the initial “low hanging fruit” of volume growth is likely to come from multinationals bringing IoT devices into India and needing local connectivity. However, as UNLIMIT leverages its Indian assets and local IoT ecosystem development efforts, it’s very likely to either build a second platform in-house or acquire a platform from a second-source vendor that can offer more aggressive commercial terms. Cisco Jasper has increasingly come under operator criticism for the relatively high revenue share (10 – 20%) it requires from partners. Of course, Cisco Jasper offers a range of benefits that may justify a price premium, namely its global scale of operator partnerships, technical sophistication, and long experience in helping partners navigate the strategic business aspects of IoT market entry. Nevertheless, IHS Markit has heard from other global operators that having a second platform is essential in negotiating the best possible terms with Cisco Jasper. There is also some grumbling about Cisco’s renewed emphasis on reaching out directly to enterprise customers, which some mobile operators view as competitive with their own efforts, as opposed to the long-standing Jasper tradition of working “behind” the operator.

In addition, viewed from another angle, this announcement can be scored as a significant coup for Cisco Jasper, in opening up a major exclusive operator partnership in India. India has come to be seen as one of the last significant geographical opportunities to be opened up by IoT platform vendors, prior to the hard task of developing the African market and other spot emerging IoT markets in other developing economies. Recent momentum has appeared to be on the side of Ericsson, the strong #2 player, with its Device Connection Platform (DCP), in what is essentially a duopoly market for merchant market connected device platforms. Ericsson has been selected as the unifying platform vendor for both the Global M2M Association and Bridge Alliance operator groupings. The exclusive partnership with Reliance Group in India gives Cisco Jasper a strong beachhead in a major new market opportunity.

A range of factors, such as strong economic growth, rapid urbanisation, an expanding manufacturing base and the need for infrastructure investment, render India a significant opportunity for companies offering IoT products and services.  Through UNLIMIT, Reliance Group is positioning itself to lead this market, but it will face  considerable competition from a range of players, such as Vodafone, which has long-established M2M and IoT operations in Europe, and large Indian-focussed  operators like Bharti Airtel, Idea Cellular and Tata Communications, which is deploying a LoRa network across the country. 


 

Geography
India
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