Jio or maro?

Mukesh Ambani has bet $25 bn on Jio, his telecom venture. He has disrupted the market hugely, causing tariffs to fall and triggering consolidation amongst existing players. He has bagged 100 million customers. But will he make money out of his venture? Schumpeter, writing in the Economist, is sceptical:

Jio will start charging from April 1st. Yet even assuming it keeps cranking prices up and wins a third of the market, a discounted-cash-flow analysis suggests that it would be worth only two-thirds of the sum that Mr Ambani has spent. To justify that amount Jio would at some point need to earn the same amount of profit that India’s entire telecoms industry made in 2016. In other words, there is no escaping the punishing economics of pouring cash into networks and spectrum. For every customer that Jio might eventually win, it will have invested perhaps $100. Compare that with Facebook or Alibaba, both asset-light internet firms, which have invested about $10 per user.

Schumpeter thinks Ambani might tweak his business model at some point in order to improve the economics of his project but he's unsure about the outcome:

Perhaps he hopes to get his money back by turning Jio into an internet firm that offers payment services and content, not just connectivity. China’s Tencent, which owns WeChat, a messaging service, has successfully diversified into games and banking. Still, no telecoms firm has managed this feat and it is hard to see how RIL’s clannish culture can become a hotbed of innovation.

Or is this one big brand building exercise, one that builds equity not just with ordinary people but with the government as a huge exercise in inclusion?