Jio Platforms Explores Tech-for-Equity Talks With Comcast and Charter

The sources said there is no timetable for reaching a deal with any of the companies Jio has approached, and financial terms were not clear. The reports did not include comment from Jio, Comcast or Charter.

Jio also held similar talks with South Africa's MTN Group, according to the reports. Those discussions collapsed because the two sides could not agree on valuation and certain licensing issues.

What Jio Is Selling

The technology at the centre of the talks is a proprietary system Jio calls unlicensed band radio, or UBR. It delivers high-speed home internet over free, unlicensed Wi-Fi frequencies, using transmitters on nearby towers or rooftops so that no cable has to be run to each home, according to Business Today. Because the operator does not pay for spectrum or lay new lines, the service is cheaper to deliver than traditional cable or mobile-based broadband, the reports said.

Reliance has for months signalled that it intends to take the system overseas and has described it as a "global first", trade publication tele.net reported. Jio said last week that it is targeting 10 to 15 global partners for the platform. Managing Director Akash Ambani has said the company wants to take UBR to both developed and developing markets while being selective about where it expands, and that Jio intends to operate abroad as a technology-led business rather than building its own networks, according to Business Today. The international push is led by Dan Bailey, a former Deutsche Bank technology, media and telecoms executive, and senior executive Mathew Oommen.

In India, Jio has nearly 15 million wired broadband users, and Reliance says users served through UBR have passed 6.5 million, Business Today reported.

Why US Cable Operators Might Listen

Comcast and Charter are the two largest US cable broadband providers. Comcast had about 28.3 million residential broadband customers at the end of September and Charter had about 29.4 million internet customers in June, according to Business Today, and both have been losing home broadband subscribers to fibre and fixed wireless rivals. A lower-cost way to reach homes could help them compete on price. For Jio, a deal would provide a foothold in the US market without the capital cost of building a network there.

The structure under discussion, technology in return for equity rather than cash licence fees, would give Jio a direct stake in the performance of the operators that adopt its system. It is an unusual model for an Indian telecoms company, which has more often been on the receiving end of foreign investment: Jio Platforms raised billions of dollars from global technology and investment firms in 2020.

The talks come shortly after Jio listed in Mumbai following what Business Today described as a record $3.2 billion initial public offering. Selling its technology abroad would give the newly listed company a growth story beyond the Indian market, where it is already the largest mobile operator.

The failed MTN negotiations show the main obstacle. Agreeing on how much a stake is worth in exchange for a licence is harder than agreeing on a cash price, and any deal with Comcast or Charter would need to settle the same valuation and licensing questions.