Reliance Industries announced their brand new 4G data plans so cheap, it sent other telecom companies into a frenzy. Launching Reliance Jio, at the company's 42nd annual general meet, owner Mukesh Ambani said, "I believe that these are the absolute lowest data rates anywhere in the world. Jio's mission is to meet the exploding need of data for India, and to take our nation from data shortage to data abundance." "World over, operators charge only for data, voice and messaging are essentially free. All voice calls for Jio customers will be absolutely free." He added, "Jio will fulfil the Digital India dream of Prime Minister Narendra Modi."
Reliance said their 4G network covers 18,000 cities and towns, and over 200,000 villages. By March next year, it will cover 90 per cent of India's population. To uplift customer enthusiasm, Ambani said consumers would be able to book Jio services for free till the end of this year. The connectivity comes with a load of freebies, including apps in the Jio ecosystem worth £1.50 billion, students to get 25 per cent more data for the same plan as other users and enterprise customers would be provided with customised solutions.
The company will soon launch smartphones starting at Rs 2,999 and wifi routers at Rs 1,999. Mukesh Ambani said the firm was planning to roll out a fibre to home network of 1 GBPS and also a multi-gigabit network for enterprise customers. He asked rival companies "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."
Charging a mere 1/10th of what other companies are charging for 4G data services, the Jio 4G tariffs begin at Rs 149 for 300 MB for 28 days. At Rs 499 per month, customers will get up to 4 GB data along with unlimited 4G at night, for 28 days. For Rs 999 per month, customers will get up to 10 GB of 4G data along with 20 GB of WiFi. They will also get unlimited usage at night. For Rs 1,499 per month, customers will get 20 GB worth of 4G data while for Rs 2,499 per month, customers will get 35 GB worth of 4G data. At Rs 3,999 per month, customers will get 60 GB worth of 4G data. The most expensive plan is priced at Rs 4,999/month. This plan will offer 75 GB worth of 4G usage, along with unlimited 4G usage at night, and 150 GB of WiFi data respectively.
The almost aggressive plans left a massive $2 billion hole in the pockets of Bharti Airtel, Idea Cellular and Reliance Communications shareholders. The biggest loser, Airtel saw its market capitalisation dipping over £850 million to £13 billion, followed by Idea's more than £350 million loss to an m-cap of about £337 million.
Ratings major Crisil said, Jio's plans will expectedly put pressure on both, revenue growth and profitability of existing telcos. "Operators will not only be forced to take a relook at their tariff structures and customer retention strategy, but may also be forced to bid more aggressively in the forthcoming spectrum auctions, especially in high revenue-generating circles where they have limited 'capacity and spectrum' to offer 4G services."
