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‘Datagiri’: RIL’s Jio a game-changer, could fuel all-out price war

business Updated: Sep 01, 2016 22:12 IST
Nachiket Kelkar
Nachiket Kelkar
Hindustan Times

Mukesh Ambani (R), chairman of Reliance Industries Ltd, poses with his son Akash before addressing the company's annual general meeting in Mumbai, India September 1, 2016. (Reuters)

Reliance Industries launched its new 4G telecom network on Thursday, offering free voice calls and rock-bottom data prices in a potential game-changer that could fuel an all-out price war in a market of 950-odd million mobile subscribers in India.

RIL chairman Mukesh Ambani, India’s richest man, announced the launch of Jio at the company’s 42nd annual general meeting in Mumbai, vowing to “take our nation from data shortage to data abundance and to enable a digital life for digital India”.

“The world’s demand for digital oxygen, that is data, is growing explosively. Jio’s mission is to meet this exploding need for India…,” Ambani added.

The aggressive pricing sent shares of established telecom players into a nosedive and brought back memories of a similar scheme in 2003 when Reliance Infocomm launched what was called the ‘Monsoon Hungama’ that offered services bundled with handsets at Rs 501.

“We can transform India from a high price data market to one with the lowest data rates anywhere in the world,” said Ambani, promising free voice calls and roaming even after the commercial launch on December 31.

The new company, RJio, will be a national digital empire stretching from phones and hardware to home entertainment and custom-made apps , Ambani said as he dedicated his most ambitious venture to Prime Minister Narendra Modi’s Digital India initiative.

People can sign-up with Jio digitally using an Aadhar-based online KYC process which will be rolled out in Mumbai and Delhi and then in eight other cities.

Ambani, who was interrupted by repeated rounds of applause by shareholders, set a target of 100 million customers “in the shortest possible time”.

Read | Bharti, Idea shares plunge as Mukesh Ambani launches Reliance Jio

Reliance has spent over Rs 1.50 lakh crore till now to set up what will be the world’s largest 4G network. It already connects 200,000 villages and 18,000 towns and by the end of March next year, it will cover 90% of India, according to Ambani.

“Reliance Industries has delivered a knockout punch on pricing of voice and data tariffs. No doubt tariff plans for voice and data is going to be a game-changer for (the) telecom industry,” said Dharmesh Kant, head of retail research at Motilal Oswal Securities.

Anticipating Jio’s launch, market leader Airtel recently reduced its data charges by as much as 80%.

“No doubt, all of us operators will compete vigorously in market. Will inspire each other to rise to greater heights…,” Ambani said throwing down the gauntlet at rivals.

Mahesh Uppal, senior telecom analyst and owner of ComFirst, said “it will be irresponsible for telcos to ignore” the challenge.

The launch of Jio dominated the proceedings of the AGM and Ambani’s almost one-hour-and-forty-five minute speech had shareholders excited.

“I have been attending Reliance AGMs for almost 30 years. Today’s was the most exciting. Jio will be a common thing, everybody, every household will have it now. It’s a great move,” said Aloysius Mascarenhas, a shareholder.