Mukesh Ambani-promoted Reliance Industries Ltd (RIL) unleashed a price war in the telecom sector on Thursday by offering voice calls free both local and while roaming and promising to offer data at cheap prices of Rs 25-50 per gigabyte (GB) through its unit -Reliance Jio Infocomm Ltd.
“I believe that these are the absolute lowest data rates anywhere in the world,” said Ambani at the company’s 42nd annual general meeting while launching Jio. “Jio’s mission is to meet the exploding need of data for India, and to take our nation from data shortage to data abundance,” he said.
Consumers will be able to book Jio services from Monday and these will be free of charge till the end of this year. Ambani also promised consumers that voice calls on Jio will always be free. He also said the company will launch smartphones starting at Rs 2,999 and WiFi routers at Rs 1,999.
The unveiling of 4G services by Reliance Jio is being perceived as reminiscent of an earlier telecom offering of the undivided Reliance Group — Monsoon Hungama — launched in 2003 by Reliance Infocomm. The scheme which drew huge crowds and disrupted the existing market at that time offered a multimedia mobile phone, along with a connection for an upfront payment of Rs 501.
Today, Jio’s 4G network covers 18,000 cities and towns, and over 2 lakh villages, the company said. By March 2017, we will cover 90 per cent of India’s population, Ambani said. So far, Reliance Industries has spent Rs 1,34,000 crore in building Jio’s infrastructure. Currently, the firm has 1.5 million test users on its network.
Unleashing a flurry of freebies, Ambani said that apps in the Jio ecosystem worth Rs 15,000 crore will be free for consumers till the end of 2017. He also said students will get 25 per cent more data for the same plan as other users and enterprise customers will be provided with customised solutions. He also promised users that they will not face extra charges on heavy traffic days such as Diwali and New Year. Besides, they will be able to book a Jio connection within 15 minutes of walking into a store using Aadhar.
Detailing Jio’s future plans, Ambani said the firm was planning to roll out a fibre to home network of 1GBPS and also a multi-gigabit network for enterprise customers. This will initially be rolled out in big cities and then extended to the top 100 cities. Reliance is also starting a Rs 5,000-crore venture capital fund to finance and partner digital entrepreneurs in Indian towns and cities. The fund will disburse money over the next five years.
Jio’s low tariffs is expected to lead to a price war in Indian mobile telecom space as other operators such as Bharti Airtel and Idea Cellular try to retain market share. Some of them had already slashed their data tariffs ahead of Jio’s launch.
Ambani also told his rivals “to do their part to create a fair framework of co-operation that is good for India and Indian customers.” The “onus is rightly on the incumbent operators not to misuse their market power by creating unfair hurdles,” he said.