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Jio Financial unit’s Rs 36,000 crore telecom gear purchase from Reliance Retail

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In Short:

Jio Leasing Services, a subsidiary of Jio Financial Services, plans to buy CPE/devices and telecom equipment worth Rs 36,000 crore from Reliance Retail over the next two financial years. This equipment will be leased to Reliance Jio customers. JLSL is entering the operating lease business via the DaaS model. Reliance Retail will procure devices at competitive prices and provide them to JLSL. JLSL will then offer these devices to customers for wireless broadband connectivity.

Jio Leasing Services to Purchase Equipment Worth Rs 36,000 Crore from Reliance Retail

Key Points:

Jio Leasing Services (JLSL), a subsidiary of Jio Financial Services (JFSL), has announced plans to purchase consumer premises equipment (CPE)/devices and telecom equipment worth Rs 36,000 crore from Reliance Retail over the next two financial years.

Details of the Deal:

According to a filing with the BSE on May 23, 2024, RIL stated that JLSL will buy the equipment from Reliance Retail and provide them on operating lease to the customers of Reliance Jio Infocomm Limited.

The monetary value of the transactions is estimated to be Rs. 36,000 crore and will be undertaken over the financial years 2024-25 and 2025-26. The distribution of purchases over the two years will depend on the uptake of services and deployment pace of broadband wireless devices.

Business Expansion:

JLSL is entering the business of operating leases through the Devices-as-a-Service (DaaS) model, allowing it to lease CPE/devices and telecom gear to Reliance Jio’s customers.

The DaaS model includes installation, maintenance, support, and additional services like updates.

Benefits and Operations:

Reliance Retail will procure the devices at competitive prices due to large volumes and provide them to JLSL at a cost-plus margin. JLSL, in turn, will supply the CPE and devices to Reliance Jio’s customers using wireless broadband connectivity and other services.

Reliance Retail is already engaged in the business of CPE, enterprise devices, and other telecom equipment.

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