Reliance Jio V/s Starlink satellite internet and Indian Banking System

 2^nd August 2021

Reliance Jio V/s Starlink satellite internet and Indian Banking System

Dear Fellow Travelers,

Namaste! Thanks a ton for appreciating our accuracy in our last post on Modi Ji which was written way back in January 2021. It’s my Guru’s blessings on me. Without his blessings, I am nobody. Wherever I have gone right – I must admit – it’s his Krupa. Let us deal with the hot topic today.

Insuring Rs.5 lakh Deposits in Banks: -

As per the promise, the government has passed the law for assuring Rs.5 lakh FD in any banks for small savers. This is a step towards banking privatisation. Initially, the government wanted to come out with a banking sector bill in which they had asked to liquidate depositor’s money to meet the loss of the banks. Since they could not pass that bill – they are approaching the same bill from a different angle. All government is doing that they are coming out clean in front of the vote banks that they have returned them Rs.5 lakhs.

Now, banks are also private and insurance companies are also private. If the insurance companies can’t settle the claim – what will happen to small savers? God Knows.

It’s really a painful situation for the small savers and senior citizens who are solely living in the FD interest.

How Business situations can take the BANKING industry for a ride?

Today banks are full of NPAs thanks to the Second Wave of COVID. Now, the 3^rd Wave is due any time. Our call is between October end 2021 to April 2022. This will affect the banking industry from within.

Now, in these situations BIG companies who have taken the big loans for their projects and if they are also affected by the change in business environments – banking the industry will go for a toss.

Let us take an EXAMPLE of RELIANCE JIO: -

Reliance Jio has invested Billions in network and Jio fiber. They are doing good. They have a huge loan in their balance sheet as per my last post on Reliance. Reliance is not a DEBT FREE COMPANY as normal people believe. They are still paying approx. Rs.21000 Cr as interest as per the March 2021 balance sheet. As per June quarter results Reliance has paid Rs.3397 Crs as a Finance cost. It means they have not repaid the loan after April 2021.  

How Reliance can be taken for a ride by some other company?

Reliance has done a huge investment in infrastructure and they are providing 100 MBPS download speed at the moment to their customers. They will increase this speed as and when the 5g is allowed. Today life is Jinga Lala for Reliance Jio.

But tomorrow may not be the same.

Tesla and SpaceX founder Elon Musk's Starlink satellite internet service is ready for lift-off. Since the public beta launched in October 2020, the newly minted "space internet" provider has already begun to offer high-speed, low-latency broadband service in several countries around the globe via an interconnected low-Earth orbit (LEO) satellite network.

The Starlink internet will be available in India in 2022 through Musk's SpaceX satellites that will be launched in orbit. The broadband company aims to provide cheaper web for millions in remote areas across the world. Starlink is available to a limited number of users per coverage area at this time.

Elon Musk is a much bigger version of Mukesh Bhai in terms of Global thinking. The company is launching 42000 Satellites across the globe and through them, they will cover the World with an internet speed of 1 GBPS. 10 times more than JIO. Currently, they are charging just USD 100 for such a speed. Rates are much cheaper than Reliance Jio.

Musk’s company is manufacturing satellites. His company is also manufacturing the rockets for launching the satellite. Recently he has made REUSABLE rockets so that they can come back on the earth and can be resent. He has a BRAIN which is much smarter than anybody in the technology world at this moment.

We may have seen 1000s of billionaires. But Musk is unique. Musk is making a BATTERY-OPERATED CAR / DRIVERLESS CAR / ROCKETS – Reusable rockets / SATELLITE / BATTERY and more.

When you pick up JIO mobile you don’t like to use them. as they are not aesthetically designed. JIO’s attitude is – if you want cheaper things – you will not get beautiful handsets. I hope they come out with really beautiful mobiles in Ganesh Chaturthi as they have announced in the AGM.

Compared this with TESLA CAR or their products. They are comparable in price along with the aesthetics also.

How the banking sector can go for a toss due to MUSK?

If MUSK becomes successful in India going forward in 2022-2023, he will take major business from Reliance Jio. Today VODAFONE IDEA and Airtel are at the receiving end due to Reliance JIO, tomorrow Reliance JIO may be at the receiving end due to MUSK.

Time is the real HERO and it keeps on changing moment to moment.

What it means for Investors and Small Savers?

Recently a judge had given a good statement after his retirement. He said – Complainant and Defendant both knows the truth. It’s not their TRIAL. It's my TRIAL to find out the TRUTH.

The same way – Reliance / Adani or Musk may fight with each other – but the safety of your money is your lookout. Don’t rely on the Government or anybody. You are not in the USA. You are in the INDIA.

Happy Investing.

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Live With Passion…Invest With Passion. 

 

Hitesh Parikh.