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All eyes on RIL AGM: RJio likely to make a splash

business Updated: Sep 01, 2016 08:34 IST
HT Correspondent
Reliance Industries

Jio is also expected to shortly file its tariff plans with the Telecom Regulatory Authority of India (Trai) and these will be effective once the three-month free voice and data trial offer lapses.

Reliance Industries (RIL) chairman Mukesh Ambani is expected to formally launch Reliance Jio Infocomm at the annual general meeting (AGM) on Thursday thereby commercially launching the service.

The AGM will witness the launch of the much-anticipated tariff plans of Jio, a source familiar with the proceedings, told HT. Jio is also expected to shortly file its tariff plans with the Telecom Regulatory Authority of India (Trai) and these will be effective once the three-month free voice and data trial offer lapses.

The company is also expected to try and establish itself among top 3 handset brands in India. Currently, Reliance is at the fifth spot with Lenovo, Intex, Micromax and Samsung on top as per International Data Corporation’s latest report on the smartphones market. The source also said that it was unlikely that LYF handset users would get any special offer for using Jio.

However, Ambani doesn’t want to leave any stones unturned with the launch. Reportedly, he is pumping in ₹1.5 lakh crore into his ambitious telecom venture. “As we saw in 2012-13, India is 150th in the world in mobile broadband penetration as well as quality. Jio has really been conceived to change this position,” Ambani had said in an interview to CNN in February.

Jio got a soft launch in December 2015, when RIL offered mobile connections and discount-price handsets to its over 100,000 employees. Sources said the launch announcement is likely to come at RIL’s annual general meeting on September 1.

“RIL knows that their consumer interface has reduced significantly over the years. With all efforts focused on telecom, the need to showcase B2C ventures is immediate. A drive-in shopping experience at petrol pumps is aimed at capturing consumer attention,” said a source.

He further clarified that about 500 moribund pumps will re-commissioned at the earliest to explore this new model — retailing through Reliance Fresh and Reliance Digital in addition to vehicular fuel. RIL is working on this model at a few outlets they have on the Chennai-Bangalore highway and is keen to expand in the north.

“It is no longer simply a petrol pump. Today, what you can do with fuel retail outlets by virtue of the synergies make it a more consumer-facing business,” said V Srikanth, joint CFO at RIL had said after its fiscal first-quarter earnings on July 15.

“This is an exercise to use the real estate available with RIL’s petrol pumps. They are within city limits, on highways as well as in small towns, where a Reliance Fresh or a Reliance Digital could become a catchment area,” said Arvind Singhal, CMD, Technopak.

RIL holds licences to set up 5,000 fuel retail outlets. However, it has set up only 1,470 filling stations so far, of which just 1,022 are operational. It has been shutting outlets since 2008 as government-administered fuel prices made the venture unprofitable.

Meanwhile, telecom operators in India are waging a price war to retain and acquire customers ahead of Reliance Jio’s (RelJio) formal launch on Wednesday.

Experts say RelJio is set to disrupt the telecom industry with cheap data. “Whenever a new player enters an industry, there are chances of disruption. RelJio could be that player ,” said Prashant Singhal, global telecommunications leader at EY, said.

Over a decade ago, Reliance Infocomm’s launch of a Samsung phone for ₹501 and very cheap calling rates in 2002 triggered an aggressive price war. Six years later, telecom companies started slashing prices after Tata Docomo started per second billing.

“Operators are definitely cutting rates. Rel Jio’ s launch will be a big challenge for the industry and it will be irresponsible for telcos to ignore it,” Mahesh Uppal, senior telecom analyst and owner of ComFirst, said.

Bharti Airtel, on Monday, slashed prepaid data rates by as much as 80%. The company currently has 38 million 4G and 3G users in India. Under the new schemes customers can avail a gigabyte (GB) of data for ₹51.

To avail the scheme, Airtel customers will have to recharge their prepaid numbers with ₹1,498. The recharge will include 1GB of data valid for 28 days. After limit is reached, the next 1 GB of data can be bought for ₹51. This can be done for 12 months. At present, the telco charges ₹ 259 for a 28-day 1GB pack.

“The prepaid packs are live in Delhi and will get launched across circles by Aug 31, 2016,” the statement said. Last month, Airtel offered up to 67% more data on existing schemes.

It was followed by Idea Cellular and Vodafone. While Idea Cellular said that it had cut rates to be in tandem with other telcos, Vodafone said it slashed prices to avoid losing customers.

“This is a very competitive market and if you don’t cut prices of data, you will lose customers,” a top executive from Vodafone India, said adding that the trend was to offer more data at the same price.